Ethical investment performance highlighted by BP oil spill Go compare with our comparison table

Ethical investment performance highlighted by BP oil spill

10 June 2010 / by Rachael Stiles

The recent oil spill in the Gulf of Mexico – being hailed as the worst environmental disaster in US history – might encourage more people to think twice before deciding where to invest their money and choose ethical investment.

Ethical investments have performed better than their non-ethical counterparts in the last year, according to research from Moneyfacts, and the BP oil spill has brought green issues into the spotlight.

Ethical investment has delivered an average return of 29.95 per cent in the last year, compared to 29.85 per cent for non-ethical funds.

And, the latest figures from EIRIS (Experts in Responsible Investment Solutions) show that investment into ethical funds has hit a record high of £9.5billion, illustrating a growth in consumer demand for ethical products.

Over the long-term, investors have had to pay for their environmentally rewarding principals with lower returns, as investing in ethical funds has not proven as financially rewarding; but the disparity in returns between ethical and non-ethical investment has been steadily shrinking and now ethical investment has gone into the lead.

Michelle Slade, spokesperson for Moneyfacts.co.uk explained why some investors have chosen to pay a premium for letting their principals dictate where they invest their money: "Ethical investing is a lifestyle choice, where rate and performance is not the overriding factor," she said.

But, she continued, "Ethical investing is likely to remain a niche market unless it does more to attract the mainstream market," Ms Slade added, although there is a wide range of ethical investment deals to choose from, including ethical stocks and shares ISAs, and she is hopeful for the future of ethical investment, based on the last year's figures:

"While ethical investors have had to endure periods of underperformance, over the last year they have performed more successfully than their non-ethical counterparts."

© Fair Investment Company Ltd