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The following list is designed to highlight some of the currently available options. Fund Managers have been identified in the past in terms of their ‘green-ness’. While not strictly used to define environmental concerns, it has been used as a guide to their overall commitment or philosophy. A ‘deep green’ manager is likely to carry a defined positive screen methodology to surveying and selecting from prospective investment opportunities. A ‘light green’ manager however, may provide either a negative screen or a mix of strategies to select their investment portfolio.
Specialist ethical investment managers are limited in number, the main ones being Australian Ethical and Hunter Hall, whose investment funds have been publicly available for 14 years or more. Other managers who operate under this banner include Sustainable Asset Management (SAM) and various representatives of the Uniting Church.
Mainstream investment managers that offer ethical investment funds include Challenger, Perpetual, AMP, BT, ING, IOOF and Suncorp.
'Industry' Super Funds are now starting to offer 'Sustainable' or 'Ethical' investment options to their members. They do not normally specify who is managing the underlying funds nor how the strategy is implemented. Contact with the fund is recommended to ascertain suitability before proceeding.
Master Trusts are available that allow investors to, under one administrator, invest in a range of managers. This offers investors portfolio diversification of both managers and or strategy.
Direct Investment. Many investors are investing directly rather than using public investment trusts, they can take different forms, like:
Conventional Listed Shares
Examples include:
a. Investment in gas related energy may be more appealing than investment in a coal based energy supplier due to its lower pollution footprint
b. One regional bank supplies traditional banking services,face to face and online and may be more appealing than one of the ‘Big 4’ due to its commitment to providing community banking and ‘ethical’ bank accounts
c. Base metal resources sourced from salvaging and recycling, may be more appealing than investing in a mining company.
** Some inherent compromise may exist when investing in long established industries as there are very few companies that do everything truly ‘right’, and the fact that our current lifestyle and industrial infrastructure will not be converted overnight. Investing in companies that ‘do it better’ is an obvious place to drive change. Listed
‘New Economy’ companies.
Examples include:
a. Plantation forestry. For both the reduction in reliance on native (public) forests and carbon sequestration benefits. Be aware that most are mono-cultures which provide a lower level of eco system benefits (to both flora and fauna), and often long lead times to cash flow.
b. Renewable Energy. Sources include solar, wind, biogas and the developing field of ‘hot rocks’. Secondary markets exist in energy storage technologies.
c. Waste Management. Businesses providing technology to deal with industrial waste (water, land remediation, aerial emissions).
d. Industrial scale recyclers. From old tyres, waste plastic, metals, IT equipment, concrete, timber, green waste and more.
Community Resources/Infrastructure. There are more and more people and groups starting to focus on building their ethical investment exposure from within their own community. This allows retention of more financial assets in the community and helps maintain development of local employment opportunities. Examples may include ‘for profit’ provision of property assets for community groups and or socially beneficial organisations and ‘not for profit’ provision of low-impact housing infrastructure (e.g. Bega Eco Neighbourhood Development).
Personal Responsibility. Review of existing 'footprint' starting in your home. Review the built environment (your house) and the physical environment, improving functionality and efficiency. Review the financial environment, your budget, how you spend, what you spend on or invest in. Review your social environment - volunteerism helps our society function at the most basic level, and the impact of collective endeavour is greater.
Investors and groups of investors are now becoming shareholders to positively enact change. As shareholders, investors have a right to vote and put motions to other shareholders. We have seen historical instances where investors have sought to either change company policy or activity to reduce environmental and socially detrimental activities. Examples include logging of old growth forests and manufacture of products that are demonstrably harmful or potentially harmful.
By no means should investing be promoted as solely ‘for profit’.
Private Foundations. Many individuals are opting to set up their own ‘Giving Trusts’. Effectively a Trust is set up with the objectives of the founders explicitly outlined in the Trust Deed. Funds are contributed (often as a tax deduction) and invested. Periodically, cash distributions are made to prescribed groups or community sectors to support the objectives of the Trust.
Donations. Similar to a Foundation’s objectives, direct (often tax deductible) cash donations to charities can be made by individuals regularly or periodically. New facilities are also now being offered whereby very small share holdings can be donated to charity, earning a tax deduction and conducted brokerage free (ShareGift Australia).
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