Ethical consumers, but not ethical investors

On the eve of National Ethical Investment Week, new research from Ecclesiastical Investment Management reveals that two thirds of consumers who invest (60%) would consider themselves ethical consumers, but only a third (35%) would consider themselves ethical investors.

The disparity shows how consumers are failing to use the same criteria when shopping and investing. For example, a fifth (20%) of consumers think that recent events in the news, such as Starbucks, Amazon and Google avoiding paying tax or claims that Nike employs children would make them far less likely to shop there or buy their products.

Despite the majority of investors not seeing themselves as ethical, all investors stated that they were concerned about what their money was invested in. Women chose renewable energy (36%) as the sector they are most happy to invest in, while men stuck with traditional non-ethical stocks, such as precious metals (49%) and natural minerals (40%).

The research also further looked into the psyche of an investor, with one in five (21%) stating that their parents made them first think about investing. A further 16% thought it was the right time to consider their future, 15% because they were worried about their retirement and 11% because they had children.

Sue Round, Head of Investments at Ecclesiastical Investment Management, commented: “The research shows that consumers are happy to buy ethically, but that when it comes to investing they fail to see the connection. With many of us far more environmentally aware, engaged in issues of corporate governance and becoming far more knowledgeable about the companies with which we shop, it will only be a matter of time before consumers realise that they can get good returns alongside investing with their principles.

“Ecclesiastical Investment Management has been at the forefront of socially responsible investing since 1988. We seek to only invest in companies that make a positive contribution to society which means that investors can devote their money safe in the knowledge that they agree with the causes. All our Amity funds make a positive contribution to society and the environment through sustainable and socially responsible practices and we look forward to helping the ethical consumer take their first step towards being an ethical investor.”

Commenting on the research Gavin Oldham, chief executive at The Share Centre, said: “It is true that although many personal investors pay lip service to ethical investing, few actually state sectors they don’t want to invest in when completing the ‘Know Your Customer’ details at The Share Centre. We need to raise the profile of ethical investing to make it easier to identify companies with harmful products and procedures so investors can make informed decisions that are in line with their ethical principles.”