Ethical investing can go by different names, including sustainability investing and socially responsible investing. However, all of them have the same approach, and that is to invest in organisations with products and services that are in line with your values and beliefs. This means avoiding sectors that are considered harmful to people and the environment, such as tobacco, fossil fuel, and weapons, and choosing ethical companies that are aiming to make a positive impact on social change and the environment. The challenge is finding the right ethical investments in the UK. So, here are some tips to help you with that:
- Start with yourself – Identify your investment goals and what you really want to achieve out of your investments. You may need to determine your risk appetite, needs, and how quickly you want to get your money back too. That way, you can easily narrow down the selection of ethical investments in the UK to those that are relevant to your personality and values.
- Set realistic expectations – Ethical investments will typically have lower returns compared to conventional investments. So, be prepared for times when your investment may underperform. However, there are moments when an investment could outperform a typical investment. You just need to do your homework and determine how future-proof it can be.
- Consider a positive investment – These are socially responsible investment funds associated with empowering certain values. ESG (environmental, social, and governance-based) investing is a common manifestation of that.
- Go for the long-term – Consider ethical investments in the UK that are focused on opportunities in an industry, which is likely to thrive in the long run. Some of these are modern foods like plant-based nutrition sources and environmental-friendly alternatives to traditional meat production.
- Read the company’s investment case – Get to know the company well and make sure you support or agree with their vision.