Report published to mark ethical investment weeks shows surge in sector in last year

News - Savings

Written by Ray Clancy

Monday, 08 November 2010 10:31

Ethical savings and investments have rise by a third, the biggest annual increase in a decade, according to a new report issued for national ethical investment week.

Total money invested ethically rose 34% to £19.2 billion, from £14.3 billion in the previous 12 months. In comparison, total deposits and investments grew 15% over the same period, says the report from Co-operative Financial Services (CFS).

Ethical investment increased by 40% last year from £6.8 billion to £9.5 billion, compared to a 33% increase in mainstream funds, it also found.

While ethical banking increased by 31% over 12 months, from £7 billion to £9 billion, compared to 4% growth in total banking deposits. And monies held in credit unions and ethical stocks also increased, up 19% from £552 million in 2008 to £657 million during 2009.

‘The growth that we’re witnessing is evidence that in the wake of the financial crisis more consumers are considering the ethical as well as financial impacts of their money,’ said Tim Franklin, chief operating officer, at Co-operative Financial Services.

‘While ethical finance has grown steadily over the decade there has clearly been a recent acceleration. This is something that we’ve experienced at The Co-operative Bank, with current account openings up 38% last year; a result of a consumer flight to trust,’ he added.

Over the ten year period from 1999 to 2009, ethical finance has enjoyed a near four fold, 373% hike from £5.1 billion to £19.2 billon. This includes a 423% lift in ethical banking from £2.1 billion to £9 billion, ethical investments up by more than three times from £2.9 billion to £9.5 billion, and a 438% rise in money held in credit unions and ethical shares from £150 million to £657 million.

CFS offers a range of both ethical investment and banking products. Through The Co-operative Investments it provides three actively managed sustainable funds which are designed to meet the varying attitudes to risk of investors.

The funds focus on eight key themes: healthcare, climate change, global power shortage, technology, global infrastructure, urban regeneration, sustainability and emerging markets. The Sustainable Leaders fund is a balanced fund that looks to provide investors with long term capital growth by investing in high quality companies mainly based in the UK.

Its Sustainable Diversified fund is described as a cautious fund that aims to provide investors with long term capital growth by investing in a mix of investments including equities, corporate bonds, government bonds, property and cash. It is actively managed in order to achieve a balance between growth and risk.

While the Sustainable World fund is a balanced fund with the remit to invest in companies worldwide. It offers long term capital growth by investing in high quality equities, corporate bonds, government bonds and cash.