Ethical And Green Investments

January 17, 2011

We’re all interested in financially sound investments which help our money to go further. But how many of us are concerned about the ethical nature of our investments? And how can we be sure that the institutions and financial agents responsible for managing our money are using the financial resources we’ve entrusted to them in a transparent, responsible and accountable way?

If you are committed to leading a more green and ethical lifestyle then it probably makes sense to review your financial investments. Making the right investments will ensure that your money is working hard for you – and also for the environment.

A niche market?
There’s a common misconception that ethical investments are a niche market. But things are changing, and financial markets are beginning to recognize the demand from consumers for green investment products. Just as you can now expect to choose from a range of ethically sourced produce in your local grocery store or supermarket, you can now also access a range of financial products with strong ethical credentials.

The First Affirmative Financial Network, LLC (FAFN) is an independent investment advisory firm registered with the Securities and Exchange Commission and operating in all 50 states. It support a nationwide network of investment professionals who specialize in serving socially aware investors, and can help you find an adviser near you. From savings accounts to investment funds, pension schemes to mortgages, there is a wide range of ways to secure a positive social impact from your finances. Ethical investments are a powerful way to invest in the future, reaping sustainable, cleaner and greener profits with considerable potential for long-term growth.

In the UK, the Sustainable Investment & Finance Association (UKSIF), recently co-ordinated National Ethical Investment Week – using it as a platform to promote and highlight opportunities for ethical investment. They also devised an ethical investment quiz to encourage people to reflect on their existing financial investments and attitudes towards ethical financial products. According to UKSIF, there is ample evidence that well-managed green investments can perform as well as, and in some cases, even better than other investments. A great reason to diversify your portfolio!

Micro-financing: A uniquely social return on your investments
Micro-financing has also taken off in recent years, and KIVA is one non-profit that has taken the concept of ethical micro-finance to a whole new level. KIVA aims to alleviate poverty by connecting social investors with ambitious social entrepreneurs. Through a global network of ethical micro-finance partners, KIVA enables social investors around the world to learn about local community projects that require investment. Currently there are over 700 community projects awaiting investors – and the sheer diversity is incredible. From restaurants to taxi services, education projects to housing loans, there’s an ethical investment opportunity for everyone!

Investors can pledge money online to support their chosen project, and this is transferred as a loan to the local entrepreneur, who is then supported to invest the money and eventually repay the loan in full. This enables the investor to either withdraw their original investment, or re-invest in another project.

To date, KIVA has facilitated over $175m in social investment loans, and funded almost half a million social entrepreneurs to set up or further enhance their own businesses. To find out more about KIVA, and to start your journey towards a greener financial portfolio, visit www.kiva.org/.

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