Green and

Ethical Investing

What's Important to YOU?

Ethical investing starts with your ideas and principles – what you believe to be important. Views vary from person to person, as do the approaches of most 'ethical' funds

Whether ISAs, investments or pensions Green and Ethical investing aims to allow you to make money and make a difference.

At Green Financial we like to do our bit. But it doesn't mean we are fanatics. Our view, both at home and at work, with regard to 'being green', is we do what we can, where we can.

What's important to us?

In the office we recycle all that we can, from paper to ink cartridges and the beverages we serve clients are organic or fair trade. All our lights are on timer switches so automatically turn off when no one is in and all our computers are turned off every night. But we aren't perfect. We haven't managed to compost our teabags yet and we haven't convinced the building owner to move to a 'green' electricity supplier. But we're working on it.

Saving YOU Time and Money

If you'd prefer to cut down your carbon footprint by holding virtual meetings with us using videoconferencing technology we are happy to do that. Our belief is that technology simply reduces the need for face-to-face meetings, it doesn't replace it.

So if you want to come to meet us to make sure we are as Green as we say, that is fine too. We encourage sustainable transport – the office is a few minutes walk from the underground and the train station and there is cycle parking available in the building and nearby.

Paperless Portfolios and Valid Valuations

We offer entirely paperless investments, ISAs and pensions. We offer online valuations, 24/7/365 and we can securely store all your portfolio documentation so you no longer have to receive reams of paper that is out of date by the time it arrives.

It's our belief that if we can save time and money by holding virtual meetings and reducing paper usage we can keep your fees down and reduce our impact on the environment.

A Common Sense Approach

We carry the common sense approach of doing 'what we can, where we can' to our clients for 'Green and Ethical investing' too. It is very difficult (but certainly not impossible) to be completely Green. So if you'd like to talk to us about doing what you can, where you can with your ISA, investments or pension – or in other words being as green as possible without impacting on risk or returns - please contact us.

Green Financial have long been a member of the Ethical Investment Association (EIA), the UK Sustainable Investment and Finance Association (UKSIF)

Please read on, if you'd like to know even more about Green and Ethical investing

Green by name and green by nature

At Green Financial Advice Limited, we have advocated this approach to investing while not compromising the client's requirements in fund selection recommendations.

Buying a green and ethical investment or financial product is a positive choice - your money not only works hard for you, but can also help society and the environment. If you recycle or make other green choices, it makes sense to look at green and ethical financial choices, too.

Green and ethical investments look at the wider impact of investing on society and the environment when seeking financial returns. They take into account social or environmental criteria in addition to financial criteria.

You may sometimes hear the terms 'responsible' or 'socially responsible investing' used interchangeably with 'green' and 'ethical', but they usually mean the same thing.

To be Technical for a moment...

The most widely used vehicles in this area are pooled equity and bond funds. These are mostly open-ended investment companies (OIEC's) unit trusts, investment trusts often found in ISAs or life and pension funds.

What to do next

The Green Financial Ethical Enquiry process is the first step in the approach to a sustainable and ethical investment. By filling in our 'ethical enquiry' form, you put your thoughts on paper and we can start to understand what you wish for in an ethical portfolio. The next step is more communication to fine tune your request.

Sustainable investing has received positive feedback from clients after initial discussion advising what it means, the positive effects and how it can be accomplished. Research has shown that around 50% of investors would consider ethical investing if they knew it was an option, even if it held the possibility of foregoing some of their returns to do so and as we said previously, there is no evidence to say this is true.

Make a difference AND make money?

The success of any portfolio relies on many areas such as asset allocation, risk control, cost control and fund management skill among other things. It is a wrong to assume that all ethical funds do not have the benefit of these.

The opinion that limiting investment choice by excluding certain companies or sectors leads to underperformance is an argument against active management rather than against sustainable and ethical investment. Nearly all active managers screen out stocks for various reasons; that is how active management works.

Screened sustainable investment funds merely focus on stocks based in long term ethical and environmentally conscious businesses. Mainstream portfolio construction techniques can still be applied in the same way as the majority of fund managers already do.

Green Financial undertakes substantial research before any fund is considered for a portfolio. This means that all our recommended funds, ethical or not, are researched in the same way and although we want to be able to offer a good range of ethical funds, no fund would be added to a portfolio purely because it is ethical.

Summary

Whether you wish us to undertake a one time project to help you make existing investments 'greener' or you'd like to become a long term client with a Green and Ethical, Socially Responsible Portfolio encompassing ISAs, investments and pensions, managed and monitored regularly, please do contact us.

Socially Responsible Investing

At the start of this section we stated that the approaches of ethical funds vary. Some funds have very strict criteria and will screen out companies who do not meet these, whereas other funds have less strict criteria and may select the best company from a group, even if it does not meet all criteria. Some funds are socially responsible, some ethical and some sustainable.

Over the years there has been a perception develop that ethical funds tend to underperform as they tend not to include larger companies in industries such as tobacco, pharmaceuticals and mining (which have all historically delivered strong results). Nowadays a contrary view also prevails, that investing in companies that actually do good can be profitable. Whichever approach you choose to believe, or if you consider somewhere in the middle is probably most realistic, there is no evidence that following your conscience will lead to poor returns on your investments.

What does that mean if you'd like us to help you with 'ethical investing'? At its most basic, we can look at what you already have, whether pension, investment or ISA and suggest 'greener' funds available to you.

The research advisory firm EIRIS estimates that there are around 90-100 green and ethical investment funds available but our strict quality control and ongoing investment fund review process means our universe of recommended funds is usually nearer the 15-20 mark meaning we only use the best of the best.

Green Financial never charge for change, so if one fund is no longer suitable or performing we'll say so and suggest a replacement, and you have the peace of mind of knowing we are only suggesting a change because it fits your portfolio, not because we are being paid.

At the other end of the scale, we have a comprehensive ethical enquiry process, that will ask you questions about what you want in your portfolio. As you'd expect, you don't have to give an opinion on all the areas. If there is just one topic you wish to support or avoid we can focus on that. Or you may wish to consider all options. Currently there are over 25 different factors we can invest in or avoid, each with differing levels of engagement.

Click here to view our 'Ethical Enquiry' questionnaire.

It covers positive screening, or what you wish to proactively support, for example, clean energy or pollution control.

It also asks about negative screening, those areas you wish to avoid, such as oppressive regimes or testing on animals.

A word of warning, the more areas you have firm beliefs on, and the stricter you demand adherence to those areas, potentially the smaller the final group of funds to select from. We can be as strict as you like in selecting the funds in your portfolio.

As an example of how strict you may wish to be, you may wish to 'avoid investing in tobacco companies'. It is easy to find funds that have this remit. But what about funds that invest in supermarkets that sell tobacco? As we said at the outset, ethical investing is all about your ideas and principles - what you believe to be important.

Green Financial have the investment knowledge to match your portfolio to your principles at whatever level you wish.

Just like buying fairtrade goods or organic food, full Green and Ethical investing does cost a little more. For those on a budget we offer a small range of simpler, ready made Green Financial 'green portfolios'. These do what they can, where they can using a less complex asset allocation model.

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Green Financial Advice Limited
Bective House, 10 Bective Place,
London, SW15 2PZ

T: 0800 170 7400
E: info@iangreen.com
W: www.iangreen.com

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Green Financial Advice Limited, Bective House, 10 Bective Place, London, SW15 2PZ
T: 0800 170 7400 E: info@iangreen.com W: www.iangreen.com

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