Ethical investment could help tackle climate change
04/11/2009
Rebecca Sargent
More education and implementation of ethical investment could help to tackle the growing issue of climate change, FairPensions has claimed.
According to a recent report by the campaigning organisation, which surveyed 100 leading investment fund managers, 89 per cent of respondents said that climate change was either important or very important when it came to their investment research.
However, despite this level of awareness, the survey also highlights some of the barriers facing investment fund managers when it comes to ethical investment.
According to the survey, the low current carbon price was the most significant barrier to the incorporation of climate change risks and opportunities into investment analysis and decision making, as 63 per cent of fund managers cited this as a barrier.
Another hurdle facing fund managers is the fact that they feel under little pressure by clients to address the issue of climate change when it comes to assessing investments.
However, despite the fact that various fund managers are tackling the issue at hand differently, FairPensions believes that with a few alterations, ethical investment could go a long way towards combating climate change.
Recommendations made by FairPensions include the need for investors to give clear instructions to fund managers when it comes to the risks and opportunities associated with climate change.
The report also suggests that guidance from the Government could encourage companies to report on their exposure to climate change risks and take action to reduce their exposure.
Finally, FairPensions believes that fund managers should start focussing on, "longer tern trends (such as expected future carbon prices) in anticipation of clients' increasing assertiveness about their longer-term interests, and as a means of rebuilding client and public confidence in themselves and the financial services sector."
© Fair Investment Company Ltd
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- Collective investments such as unit trusts are designed as medium to long term investments, for example at least five years.
- The value of your investment and the level of any income received from it can fall as well as rise and is not guaranteed and you may not get back the amount of your original investment.
- Any income yield quoted is correct at the time of going to press. Income yields vary and are only estimates. The actual dividend income that you receive will depend upon the income payable by the underlying assets of the fund and could change, either up or down, at any time. Dividend income from an ISA will, under current legislation, be free of UK income tax. Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
- If you choose a fund which invests overseas, there is the addition of “exchange rate” risk which could reduce any gains or increase losses if the currency moves against you.
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- An investment termed as a “capital guaranteed structured product” is one where the return of your capital at maturity is not dependent upon the performance of an index or another financial instrument
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- The list of funds/investments provided above should not be seen in any way as being a recommendation. No advice has been given and you should be aware that any investment which takes place will be transacted on a “non-advised sale” basis.
- Full details of the investments will be provided in the documentation/brochure sent to you and it is up to you to ensure that you fully understand the nature of the investment before proceeding. If you are at all unsure of the suitability of the type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Collective investments
- Collective investments such as unit trusts are designed as medium to long term investments, for example at least five years.
- The value of your investment and the level of any income received from it can fall as well as rise and is not guaranteed and you may not get back the amount of your original investment.
- Any income yield quoted is correct at the time of going to press. Income yields vary and are only estimates. The actual dividend income that you receive will depend upon the income payable by the underlying assets of the fund and could change, either up or down, at any time. Dividend income from an ISA will, under current legislation, be free of UK income tax. Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
- If you choose a fund which invests overseas, there is the addition of “exchange rate” risk which could reduce any gains or increase losses if the currency moves against you.
- Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
Structured Products
- Structured Products are fixed term investments and are designed so that your capital remains invested for the full term of the plan. Although it may be possible to encash your investment before the end of the term, this could mean that an early encashment charge is applied and you may not get back the full amount of your capital.
- An investment termed as a “capital guaranteed structured product” is one where the return of your capital at maturity is not dependent upon the performance of an index or another financial instrument
- An investment termed as a “capital at risk structured product” is one where the return of your capital at maturity is dependent upon the performance of an index or another financial instrument.
Specific ISA warnings
- The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
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- Full details of the investments will be provided in the documentation/brochure sent to you and it is up to you to ensure that you fully understand the nature of the investment before proceeding. If you are at all unsure of the suitability of the type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Collective investments
- Collective investments such as unit trusts are designed as medium to long term investments, for example at least five years.
- The value of your investment and the level of any income received from it can fall as well as rise and is not guaranteed and you may not get back the amount of your original investment.
- Any income yield quoted is correct at the time of going to press. Income yields vary and are only estimates. The actual dividend income that you receive will depend upon the income payable by the underlying assets of the fund and could change, either up or down, at any time. Dividend income from an ISA will, under current legislation, be free of UK income tax. Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
- If you choose a fund which invests overseas, there is the addition of “exchange rate” risk which could reduce any gains or increase losses if the currency moves against you.
- Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
Structured Products
- Structured Products are fixed term investments and are designed so that your capital remains invested for the full term of the plan. Although it may be possible to encash your investment before the end of the term, this could mean that an early encashment charge is applied and you may not get back the full amount of your capital.
- An investment termed as a “capital guaranteed structured product” is one where the return of your capital at maturity is not dependent upon the performance of an index or another financial instrument
- An investment termed as a “capital at risk structured product” is one where the return of your capital at maturity is dependent upon the performance of an index or another financial instrument.
Specific ISA warnings
- The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
- Dividend income from a stocks and shares ISA will, under current legislation, be free of further liability to UK income tax whether this is paid out or automatically reinvested.
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