The different approaches taken by ethical funds or socially responsible investment (SRI) funds are often referred to as light green and dark green.
- Light green ethical fund will generally avoid companies that gain a large proportion of their revenue from the operation of certain industries, for example, animal testing, pornography, tobacco and arms.
- Dark green ethical funds take a stricter approach to the types of companies they invests in. Generally, this type of fund will actively seek out those companies making a positive contribution to the environment and society, such as renewable energy and clean transport.
Due to the different approach of these funds light green funds will often invest in larger, longer-established companies, while dark green funds may invest in smaller and medium sized companies with the potential for long-term growth but more potential volatility.
Investing in ethical funds is the most accessible form of ethical investment, while some banks may have strong ethical practicses for cash savings and other financial services.
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