Ethical investing has gained serious traction in the UK. More investors now want their money to reflect their values—whether it’s environmental protection, human rights, or corporate responsibility.
What Is Ethical Investing?
It involves choosing investments based on social, environmental, and governance (ESG) criteria. Funds may screen out companies in fossil fuels, tobacco, or arms, and favour those committed to sustainability, diversity, or clean energy.
Popular Approaches
- Negative Screening: Excludes harmful industries.
- Positive Screening: Includes companies leading on ESG factors.
- Impact Investing: Targets measurable positive outcomes (e.g., carbon reduction).
How to Get Started
Many UK platforms now offer ethical investment funds and ETFs. Look for ESG ratings and research fund fact sheets. Leading ethical funds include those by Liontrust, Legal & General, and Vanguard’s ESG range.
Consider the Costs and Performance
While ethical funds may have slightly higher fees, their performance in recent years has often matched or exceeded traditional funds, especially in ESG-friendly sectors like renewables and tech.
Balance Ethics and Returns
Investing ethically doesn’t mean sacrificing growth. With the right mix, you can align your portfolio with your principles and financial goals.