This topic contains 14 replies, has 7 voices, and was last updated by  ricky 1 month, 3 weeks ago.

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  • #4494

    Clint
    Participant

    The latest ethical consumer magazine is devoted to ethical banking and investments. It makes for interesting reading. At the top of the list are Triodos, and then all the building societies which score between 12.5 and 16.5 out of 20. Working up from the bottom we have Tesco bank, M and S money, RBS, Nat West, between 0.5 and 3, and others such as Lloyds/Halifax scoring 5. Quite a good message moving your bank account.

  • #4495

    Mike w
    Participant

    What are the criteria? Why are Tesco so terrible?

    • #4499

      Clint
      Participant

      They get the bottom rating as a bank in 17 of the categories. In the supermarket study, Asda scores zero. Best to check out the website to be honest for detail, but you could probably guess a few.

  • #4496

    ricky
    Participant

    I’ve been looking very hard at investing for social impact lately and the Triodos model is quite interesting. I don’t however think any comparison is valid without considering alternative factors such as the security of your deposits and the prevailing rates of interest. It’s not very comforting to me to know that my money isn’t protected by UK law, for example, no matter how reliable the Dutch government might be at making good its subjects’ bankruptcies.

    I am in fact quite mind-boggled at how small the field of impact investing turns out to be. There is about a hundred trillion US dollars under investment globally yet the Big Potential Fund that Triodos recently declared themselves excited about is only £20m. The numbers are incredibly tiny in the wider context.

    A big part of the problem seems to be in defining what constitutes an impact investment. On the one hand it is often regarded as funding for the third sector. But on the other, there are those (such as Jeremy Balkin, the author of Investing with Impact) who argue that investing in shares of a company like Starbucks (yes, seriously) which has progressive educational policies for its staff, is genuine social investing. The book I linked, though well received, is very poorly written and the paucity of its case studies underlines how much this phenomenon is in its infancy.

  • #4497

    nev
    Participant

    What exactly do you mean by ethical banking/and investments? Who judges what is ethical or not?

    • #4498

      Clint
      Participant

      If you haven’t come across ethical consumer before, I don’t think I could do it justice on here, but you can google them and get access to a bit of info without a subscription. They have 20 criteria on which they make their judgements, which range across the spectrum….eg human rights, factory farming, use of palm oil, workers rights, irresponsible marketing, anti social finance, product sustainability, arms supply, animal testing, climate change, excessive pay to directors etc. Some issues are better than others but I particularly like the supermarket and the latest banking/investment study. Barclays lending money to exploiters of tar sands for example, would lose them a point. A company which pays the living wage would gain them a point.

      • #4500

        nev
        Participant

        Thank you. It’s an interesting concept, although I’m not entirely convinced that the question of what is or isn’t “ethical” is always an easy or simple judgement to make, because issues humans become involved in are not always clear cut.

        • #4501

          Mick
          Participant

          The Ethical Pension Fund offered by NEST for their Workplace Pension includes Nestle. Nestle aren’t high on my list of ethical companies!

        • #4502

          ricky
          Participant

          The Ethical Pension Fund offered by NEST for their Workplace Pension includes Nestle. Nestle aren’t high on my list of ethical companies!

          A portfolio of “green” stocks will often contain several oil companies on grounds that they are doing more than rivals to constrain their impact, even if coming from an environmentally disastrous starting point.

          And there is some logic in there. Let’s imagine oil operator A invests in wind power to boost its green credentials. We respond by only buying oil operator A shares because they are undeniably greener than oil operator B’s. The upshot will be that B will change its ways pretty quick and the environment will win. This is actually happening right now.

        • #4504

          logi
          Participant

          I wonder about the Coop Bank in this respect. A paragon of virtue on ethical banking laid low. Sad really.

        • #4505

          ricky
          Participant

          My daughter is heavily into environmental campaigning (for now), and she’s doing her best to make her old dad invest for the common good and not just his pension. He’s very happy to do so but it’s bloody hard to find investments that satisfy all the criteria and make an acceptable return. Alternative energy is a structural shift in the global economic model and I’m into infrastructure development. I have clients in micro-banking but the usurous lending rates make me wince. Beyond those, it gets difficult. (Profitable) ideas anyone?

          The Co-op on the other hand was laid low not by its ethical stance but by its monumental incompetence, not least in appointing, at its head, a god-bothering meth-head with crisps for nipples.

        • #4507

          logi
          Participant

          What’s her view on Iceland frozen foods?

          Always seem to be way ahead of the pack in retail and environmental issues. Bet you he deals with plastic packaging issues faster than anybody else.

        • #4508

          ricky
          Participant

          Funnily enough we were discussing this firm as I drove her back to college for the start of term (Oh the fun we have together ;-)).

          Bemusement basically that a business apparently bent on turning the population away from healthy eating should be so far ahead on certain ethical fronts.

          For her Iceland encapsulates a real dilemma. Does she achieve more by protesting from the outside or by rising to the top of such an organisation to effect change from the inside? Her dad naturally thinks the latter but that’s not the cool choice of course.

        • #4503

          Clint
          Participant

          Yes, they rank the ‘ethical’ funds. Some score as low as 3 out of 20!

  • #4506

    jumpingjack
    Participant

    We have funds in swedbanks ethical funds, you’d think being Swedish and all that it would be pretty good on ethics, but then when you look deeper they have money in Apple and MasterCard, plus others which you wouldn’t really think matched a truly ethical criteria.

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