This article is from our Good Guide to Avoiding Greenwash, available to download free here.
According to a recent survey we conducted, less than half of respondents (44 per cent) felt that they knew where the money they save or invest is being used. This is despite most of them (67 per cent) saying they want to save or invest it in a way that will have a positive impact.
This is a clear indication that the UK’s financial services industry faces a genuine problem with clarity of impact, and even the most well-meaning investors might struggle to see the impact they are making because they are confused about what banks and investment companies use their money for.
The problem with measuring your money’s impact
As yet, there are no clear guidelines for measuring impact in investment, and we understand it can be a tricky area to evaluate, as the outputs of impactful organisations or projects cannot be compared like for like. We welcome the new anti-greenwashing rules as a step in the right direction, as we know greenwashing only exacerbates the problem for investors, where we see funds labelled as ‘green’ or ‘ethical’ investing in activities that are clearly neither of these. A 2023 report from Common Wealth found that some top ‘ESG’ labelled funds were investing heavily in coal, oil and gas.
So what are investors to do? Growing a green portfolio
At Ethex and Energise Africa, we always advocate building a diverse portfolio of impact investments, as part of your overall investment strategy. The benefits of this are two-fold, as you will not only be spreading the potential risk of your investments, but you will also be extending and diversifying the impact of your money.
We think that direct impact investments should form an essential part of that impact portfolio – one where there is no question of the effect your investment is helping to create.
The direct approach
The mission of both our impact investing platforms is clear – to make it easier for everyday people to invest directly into organisations and projects that are creating a demonstrable social and environmental impact. In this way, investors know exactly where their money is going, how it is being used, and what impact it is creating.
Ethex only lists investment opportunities from organisations that have been specially hand- picked because they have a positive and ethical mission at their heart. In the ten years since we launched, we have helped more than 200 projects raise more than £120 million in funding from our community of 20,000+ investors.
Ethex investors have funded numerous community energy projects around the UK, collectively saving more than 900,000 tonnes of CO2 from entering the atmosphere over the lives of the projects they support, that’s the equivalent of powering over 177,000 average homes. They have also backed affordable housing projects that have created around 570 new beds for people in the UK at risk of homelessness, according to Ethex’s 10 years of impact report.
Energise Africa lists opportunities to invest in organisations that are accelerating the achievement of the UN Sustainable Development Goals in emerging economies and making this accessible for everyone, with investments starting at just £50. Investors on the platform have helped more than 850,000 gain access to solar energy, saving over 190,000 tonnes of CO2 each year.
Get the Good Guide to Avoiding Greenwash
Connecting communities with solutions
What’s so exciting about what we do is connecting real people with the opportunity to take action to make a real difference within their communities or even on the other side of the world. The money invested in these projects has a ripple effect that can create an even bigger impact over time, helping communities to grow and create environmental, social and economic benefits for everyone.
Find out more about investing for tangible impact. Impact that creates renewable energy and cuts carbon emissions, impact that creates safe homes for vulnerable people, impact that makes our communities stronger and fairer. Visit the Ethex and Energise Africa websites.
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