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Many people are becoming interested in having their investments support socially responsible companies that reflect their own values.
Ethical investment funds ensure that your money is invested in corporations that do not cause significant social or environmental damage in the course of their operations, rather than simply investing in companies with the highest return.
Environmentally and socially responsible investments
Ethical investment means supporting companies that are environmentally and socially responsible. By investing ethically, your money will not support companies that pollute, create unnecessary amounts of greenhouse emissions, destroy valuable environments, waste resources or create other negative environmental impacts. It also means your money will not support socially irresponsible companies, for example, companies that employ child labour.
The socially responsible investment sector currently has the smallest segment of the investment market, but it is one of the fastest growing. According to the Australian Securities Exchange, it is worth investing as good performance of these companies is likely to continue. Such investment funds in the US and UK are growing rapidly, with 11 percent of the US investment market now being ethical funds.
Choosing an ethical investment fund
Australian Ethical Investment is one of Australia's oldest ethical investors and in 2005 had over $360 million under management in funds. Cannex and Morning Star also offer ethical funds. The Ethical Investment Association has a list of funds and information on investing.
It is important to note that your values may not be someone else's, so ensure that you invest in a fund which allows you to see that your ethical priorities are reflected.