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An Investor's Guide to Ethical Funds

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An Investor's Guide to Ethical Funds

Kogan Page,

15 min read
10 take-aways
Audio & text

What's inside?

Socially responsible funds invest in corporations that mind their morals – and produce profits.

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

This volume is a compendium of chapters written by editor John Hancock and other highly regarded experts. Their clear, comprehensive book appears to be targeted to fund managers and corporate investor relations officers, more than to average green-minded investors. Don't expect passionate jeremiads on the health of Mother Earth. Indeed, the authors point to a growing scientific consensus that nuclear power is the safest way to wean the world from fossil fuels, and they insist that investments must generate profits as well as good will. This sound, useful volume will help educate investors regarding the growing significance of the SRI movement. getAbstract.com recommends it strongly, in part thanks to its expansive appendices detailing ethical policies, standards, definitions and performance. Some years ago, a Sesame Street social philosopher named Kermit the Frog observed, "It's not easy being green." That may still be true, but - as this book points out - it is getting a lot more profitable.

Summary

The Golden Rule

A sign behind one corporate executive's desk reads: "The Goldsmith's Rule: He Who Has The Gold Rules." Well, money may, indeed, be the root of all business, but don't ignore the influence of higher principles, as represented by socially responsible investing (SRI).

Just ask the folks at British Telecom. When BT took over a business with several separate endeavors, including a "colorful" chatline service, it didn't realize that the service was pornographic. Pornography is an "absolute avoidance area..." for investors who place a high premium on ethical investments. Once BT realized the error, it openly admitted that it failed to research all aspects of the business it acquired, and it initiated curative measures. BT's socially responsible investors were satisfied that BT had made an honest mistake and corrected it. BT's response reflected its respect for the clout of socially responsible investors.

Investors who want to use their investments to express their values engage in socially responsible investing. However, most ethical investors consider moral considerations and performance equally important - and do not ignore one aspect in favor of the...

About the Author

An award-winning financial reporter, "consultant editor" John Hancock has more than 20 years experience reporting on financial topics. Hancock edits Investing in Corporate Social Responsibility and Ethical Money. He won the Ethical Investment Journalist of the Year award in 1999. Other experts who contributed chapters include Mark Campanale, head of SRI business development at Henderson Global Investors; Lee Coates, founder of the Ethical Investors Group of independent financial advisers; Julia Dreblow, SRI Manager, Friends Provident Life and Pensions, Ltd; and Helen Harrison, retail investment officer for the U.K. Social Investment Forum.

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