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Ethics – Tell us what matters to you

Ethical investing is something that we know about – after all we’ve been doing it since we were formed back in 1835.

Throughout our long and distinguished history we have never invested members’ money directly in alcohol, arms and tobacco industries. More recently, following concerns about encouraging addiction, we added gambling and pornography providers to the list of companies that our main With-profits Fund, our Coventry Assurance Ring Fenced With-profits Fund and our Ethical Child Trust Fund will not invest in.

Ethical investing has changed over the years and is certainly a lot more popular than it used to be when we started out. Recent research from the EIRIS Foundation, which helps investors make ethical investment decisions, estimates that over £19 billion is now invested specifically in investment funds claiming to be ethical.

Does it really make a difference and what is ethical investing?

Tell us what you think by completing our short survey

There are two approaches to ethical investing – positive screening and negative screening.

Positive screening involves actively seeking out companies that are making a positive impact on the environment, society or health.

Negative screening involves avoiding investing in companies that do harm.

Positive screening can lead to investors unintentionally accepting a higher level of risk than might be appropriate as the range of stocks and shares available is much less diverse and many environmental companies are smaller and at the forefront of technological innovations making them a higher risk investment.

Whilst positive screening might be appropriate for an investor looking to maximise their return by taking a high level of risk, it’s not appropriate for investors looking for a cautious stable investment.

A question we are often asked is ‘does ethical investing have an impact on the return my investment is likely to generate?’
Keith Ashcroft, the Society’s Director of Finance and Risk, explains ‘We monitor the performance of all the investments in our funds very closely. Our analysis shows that over the medium to long term our ethical approach has actually had very little impact on investment return. There are specific periods where our ethical position has led to our funds underperforming the market and periods where our ethical position has led to higher returns. Over time these balance each other out.’

Keith added ‘the biggest impact has been our decision not to invest in tobacco industries. In times of economic recession, these are often seen by investment managers as safer income-generating shares, however, they perform less well when the economy is growing.’

What do you think about our decision to exclude tobacco, alcohol and arms industries? Let us have your opinion by taking our short survey?

We believe that ethical investing is much more than simply choosing which shares to buy or avoid. It includes using our shareholder vote to raise concerns about environmental records, excessive remuneration and poor governance standards.

For Healthy Investment being an ethical provider includes pursuing ethical HR policies, using fairly traded refreshments and reducing our environmental impact.

We are very conscious that ethics means different things to different people which why as a mutual listening to our members is really important. Our short survey gives you an opportunity to have your views taken into consideration as we continue to develop our ethical investing policy.

Let us have your views here