How to make sure funds ARE ethical
JULIE Dreblow has spent the past 25 years championing the cause of ethical investing – first at Friends Provident (a pioneer in ethical investments) and more recently at SRI Services.
Like ShareAction’s Catherine Howarth and SCM Direct’s Alan Miller, she believes it is time for greater regulation of the socially responsible investing sector.
Indeed, she is part of the task group put together by the Financial Conduct Authority to look into ways of improving the labelling of SRI funds.
Although she accepts that greenwashing among the investment industry is a problem – not helped by fund groups entering the SRI arena with little or no relevant expertise – she says ‘communication’ is the key issue that needs to be tackled.
Her view is that ethical investing is a broad church.
So, some investors are not willing to have any investments in tobacco stocks, oil companies, arms manufacturers or drinks businesses.
In contrast, other investors prefer to back companies which are involved in renewable energy or countering climate change. The investment industry, she says, must do more to ensure these different types of ethical investor are directed to the most appropriate funds – essentially through better fund labelling.
SRI Services, founded by Dreblow 11 years ago, runs a website – fundecomarket.co.uk – that allows investors to review all the different socially responsible investing styles.
Once they have found one that suits them, they can then get a list of appropriate funds.
Dreblow currently advises wealth manager Interactive Investor on the ethical funds that make it on to its list of top 40 buys (the ACE 40).
Among those listed are Baillie Gifford Global Stewardship, Royal London Sustainable Leaders and Montanaro Better World. Further details at ii.co.uk/ii-ace.
According to research by the Financial Conduct Authority, more than 70 per cent of people now want to invest in a way that protects the environment.
The same percentage would not put money into ‘investments which are unethical’.