Hot time for green investing

THESE days many of our actions and attitudes are shaped by environmental concerns. That’s a good thing for the planet, and taking an ecofriendly approach to money matters can be good for your hip pocket, too.

“Green” investing, for example, is getting hotter than global warming.

Also known as “ethical” investing, green investing is all about putting your money into environmentally or socially responsible industries, such as alternate energies, while shunning investments that can cause harm to people or the planet.

A common criticism of ethical investing in the past is that it meant sacrificing returns for investing more responsibly.

However, a 2013 report by the Responsible Investment Association Australasia found that managed funds adopting a responsible approach dished up returns about 3 per cent higher than both regular Australian and international share funds over the past 10 years.

For those wishing to match their investment with personal ethics, it’s good to know there are responsible financial products offered across virtually every asset class.

You can invest directly in companies taking an ecoaware approach or there are plenty of specialist managed funds. The Responsible Investment Association’s website ( responsibleinvestment.org) provides more details.

Many mainstream fund managers also offer a selection of socially responsible and ethical funds.

Some superannuation funds also offer sustainable investment options, so you can extend a responsible approach to your retirement nest egg.

As with all managed funds, the key is to check the principles underpinning any fund you invest in to make sure they accord with your own views.

There are other areas where an eco-aware approach can deliver financial benefits.

As a guide, a number of lenders offer “green” car loans.

Victoria Teachers Mutual Bank and Community First Credit Union are among the financial institutions that provide discounted rates for borrowers buying a car with low emissions.