What is Ethical Investing, and does it pay?

With growing concerns about climate change and other environmental and social justice issues, more and more investors are considering ethical investment options.

It goes without saying that everyone wants to see their super fund produce a decent investment return every year.

However, if you feel uncomfortable with your savings supporting activities like coal mining, gambling, or exploiting employees in third-world countries, it might be time to consider a responsible investment (RI) option.

What is Responsible Investing?

While the term ethical investing is a popular one, responsible investing is the more common language used in the financial services industry to talk about investment approaches that take seriously their responsibility for society and the environment.

Traditionally, investment and superannuation funds only considered financial issues including future performance when selecting investments.

As well as having the potential to offer investors a good return from companies that are taking stock of environmental and social factors in how they operate, responsible investing can also contribute to the stable social, environmental, and economic systems we all depend on for our livelihoods.

Can I still expect a good investment return from ethical investing?

This is a fair question given the billions of dollars of profits made from gambling, tobacco, transportation, coal and many unethical or non-renewable assets.

Many investors assume they will get a lower return on their investment if they choose ethical because there might not be as many options to pick from. But, we can assure you that your financial future won’t be compromised in any way by making responsible investment choices.

How can a financial adviser help you invest according to your values?

While Australians recognise the value of responsible investing, they also feel like they are in the dark when it comes to making informed choices.

With a growing number of ethical investment options available and so much jargon to get your head around, it can be tricky to understand whether your investments really match up with your values.

So, if you want to invest your super or savings in a way that matches your values, where do you start?

Like all matters financial it’s best to speak to a professional to understand your options.

This is where professional advice can play an important role in guiding you to invest your super and other savings in ways that match your own ethical values and priorities.

Speak to a Muirfield adviser today to discuss your options and learn more about our two new ethical investment portfolios.