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October 17, 2012
Investors in UK Celebrate National Ethical Investment Week
    by Robert Kropp

A survey conducted for the occasion reveals that almost half of adults with investments want large pension plans to sign onto the UK Stewardship Code, and research from EIRIS finds $18 billion invested in green and ethical retail funds.

In the UK this week, they're celebrating National Ethical Investment Week (NEIW), an initiative seeking to encourage financial advisers and investment consultants to include sustainable investment criteria in their services to clients.

A survey recently conducted for NEIW suggests that the time has come for advisers and consultants to begin doing so, as 42% of Great Britain adults with investments indicated that large pension plans should become signatories to the UK Stewardship Code, established by the Financial Reporting Council (FRC) in 2010.

Institutional signatories to the Code commit to public disclosure of their proxy voting policies, as well as reporting on their voting activity. If institutional investors do not report on their voting policies, the Code commits them to explaining why they do not.

Signatories also commit to ensuring that the companies with which they engage adhere to the spirit of the UK Corporate Governance Code. Companies that enact the standards of the Corporate Governance Code are eligible for Premium Listing on the London Stock Exchange; companies with a Premium Listing may, the Exchange states, "enjoy a lower cost of capital through greater transparency and through building investor confidence."

The NEIW survey also pointed out that much more education is required for investors to better understand the benefits of sustainable investment, as 94% of respondents had not heard of the Stewardship Code beforehand. Yet, almost half want some of their pensions or investments allocated to investments that provide social and environmental, as well as financial, returns. One-third said they would like to see at least some of their pensions invested in renewable energy.

"There is now over a trillion Euros under responsible management in the UK," Penny Shepherd, Chief Executive of UK Sustainable Investment and Finance Association (UKSIF) and coordinator of NEIW, said. "The simple message is that people want to make money and make a difference with their savings and investments."

Also in honor of NEIW, research published by EIRIS reveals that as of June, 2012, about $18 billion is invested in 80 green and ethical retail funds in the UK. Ten years ago, the figure stood at about $6.5 billion.

"Over the last decade we've seen sustained growth in green and ethical finance, largely driven by consumer interest in issues like climate change, fair trade, human rights and more recently, executive pay," Mark Robertson, Head of Communications at EIRIS, said. "The credit crunch and on-going financial crisis, plus unethical behavior at scandal-hit high street banks, is encouraging more people to switch to financial product providers that offer a more ethical, sustainable and long-term approach to finance."


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