Simon Mills is a research fellow. He’s already made some ethical choices, but wants his money to do even better. Olivia Bowen, of Gaeia, is one of the Good With Money financial experts.
She gave him some pointers.
Simon:
“At the moment I have a current account and a savings account with the Cooperative Bank. I set these up a few years ago, but have been a bit dismayed that the whole thing seems to be falling apart in the last year. I’m not sure what will happen to their ethical investments policy.
Olivia:
“Since its well-reported problems, the Co-op is working hard to ensure that the ethical “brand” doesn’t suffer. It asked customers to review their Ethical Policy in June 2014 and 74,187 participants took part. The policy can be found on their website: http://www.co-operativebank.co.uk/rightreasons/ethical-policy
We are not recommending that clients move wholesale away from the Co-op, but you should be mindful to ensure that less than the FSCS minimum is held with them, in case of future problems. This limit is currently £85,000 but will reduce to £75,000 as of January 2016. For more information you could keep in contact with the Save our Bank campaign: https://saveourbank.coop/”
Simon:
“… I also have an ISA with the Coventry PLC. When I did some research on this a few years ago, it seemed to score quite well on various ethical investment websites. Though the interest rate is actually going down this year, so I wouldn’t be averse to changing it.”
Olivia:
“I can refer Simon to our deposit rate fact sheet. Ethical Consumer provides research on the bank and building society sector here:http://www.ethicalconsumer.org/buyersguides/money/banksavingsaccounts.aspx and you can see from this that Coventry continue to score well.”
Simon:
“… My pension is with the USS – the Universities Superannuation Scheme. I know nothing at all about this, it is merely what was set up automatically by the university.”,
Olivia:
“This may be invested in all sorts of damaging industries, on your behalf. Please contact http://www.shareaction.org/ to find out more about putting pressure on USS to make responsible investment choices.”
Simon:
“As for ethical criteria: Yes, a close attention to good environmental policies. I would definitely try to avoid any investment in the arms trade, and no involvement with countries with any serious human-rights abuses – or with companies that supply services to them unscrupulously.”
Olivia:
“If you would like to invest for 5 years+ in an investment fund, you could set up an ISA with regular or monthly contributions, which can be funded up to £15,240 this tax year. You could transfer your Cash ISA to an Investment ISA, without using up any further ISA allowance. In terms of which fund to invest in, Edentree Investment Management offers a range of ethical funds with differing risk profiles via their Amity range, which have a long-term track record and whose managers have in general been in place for many years. Their ethical approach would seem a good match for Simon:
http://www.edentreeim.com/process
‘We are particularly focused on areas that provide the necessities of life such as healthcare, water, education and housing, or products and services that are sourced ethically and produced sustainably. We also favour ‘solutions-focused’ companies that are leading the way in technologies that may help solve some of the world’s most challenging problems, such as climate change, alternative energy or water conservation. In addition, we focus on business behaviour, expecting the companies we invest in to have a well-managed policy for promoting human rights, environmental protection, labour rights and business ethics.
We also apply negative screening to eliminate businesses involved in the manufacture or sale of certain products. We apply a 10% turnover or pre-tax profit threshold for the purpose of all our negative screens.’
Would you like a good money makeover? Contact Becky@good-with-money.com. We just need a few of your financial details to send on to our experts, who can give you some general pointers.
