Exploring ethical and sustainable investing

Ethical investment can be seen as falling into the ‘nice-to-have’ but not essential category. This paper seeks to raise awareness of the fundamental importance of ethical investing and to increase familiarity with the concept of ‘sustainable’ investment. It includes a brief history of the topic and outlines a number of approaches that can be used to help counter assumptions that it simply involves excluding ‘sin stocks’. In practical terms, ethical investors may benefit from an awareness of resources available as well as some suggestions to help differentiate committed ethical investment fund managers from those seeking a
marketing advantage from a green makeover. Finally, the logic behind assumptions that ethical investments must underperform due to ‘the price of conscience’ is challenged, with emphasis on the interplay between ethical investing, risk and competitive advantage.