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Ethical investment performs 'the same or better' than other funds

13 October 2009 / by Rachael Stiles

Ethical investment portfolios have performed at least as well if not better than other investments, according to 90 per cent of wealth managers.

Marking the upcoming Ethical Investment Week in November, EIRIS (Experts in Responsible Investment Solutions) has published a report on individuals' perceptions of green and ethical investment.

The report, Responsible Investment and Wealth Management: Opportunities for the future, is based on research of the global readership of investment magazine WealthBeifing and aims to do away with the myth that responsible investments under-perform compared to other investments.

The study reveals a growing awareness of environmental, social and governance issues, and found that rather than deterring people from responsible investment, the recent financial crisis has had a positive effect on wealth managers' views towards investing in a responsible manner.

More than half of wealth managers reported that the current economic situation has encouraged them to take such issues into consideration within their client's investment portfolios.

Investors are also increasingly using their ethics to guide their investment decisions; an ethically-minded 70 per cent of wealth managers' clients see a link between their individual values and investing in a manner that is conducive with such values. Responsible investment "ensures that clients' investment activities support rather than undermine their philanthropic aims," the report states.

Victoria Woodbridge, senior client relationship manager at EIRIS, said: "Our study illustrates how the financial crisis has caused real polarisation among wealth managers. Client retention is increasingly a challenge and wealth managers can improve retention rates and gain a competitive advantage by responding to the increasing numbers of high net worth individuals who are expressing an interest in responsible investment." 

Commenting on the report, Penny Shepherd, chief executive of UKSIF (UK Sustainable Investment and Finance), said: "What is clear is that green and ethical investments can perform at least as well as other investments. Therefore, if performance is not the issue, the question is: ‘Do investors also want to make a difference with their money?' The research from EIRIS shows that the answer is ‘Yes'." 
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