Total investment in the UK’s green and ethical retail funds has reached an all-time high this year as small investors and defined contribution pension holders have grown increasingly aware of the investment option, according to the Ethical Investment Research Service (EIRIS).
Investment as of July this year totals £12.2 bn ($19.5 bn), up from £11 bn a year earlier, EIRIS says. The 2013 total represents more than a four-fold increase from 2001, when investment totaled just £4 bn.
Of the 80 funds included in both 2012 and 2013 EIRIS data, 10 have increased in total investment by more than 50 percent in a year, while 23 have grown by between 20 percent and 50 percent, EIRIS says.
A key reason for the growth, according to data from a 2,015-person Ipsos MORI poll commissioned by EIRIS, is rising awareness among members of the general public, including direct contribution pension holders.
Sixty-five percent of those surveyed say it is either ‘essential of very important’ that pension funds invest in companies that respect prohibitions on child and slave labor, while 55 percent say the investments should respect workers’ rights.
Almost one in five respondents say they would like to see 100 percent of their pension fund invested according to ESG investment principles. The same percentage say they would be ‘very or fairly interested’ in switching to a pension plan that offers a green or ethical product, even if the financial performance was inferior.
‘We continue to see an increase in the amount of money being invested in green and ethical funds, reflecting the wider interest of consumers in being ethical and sustainable in their purchasing decisions,’ says Stephen Hine, head of responsible investment development at EIRIS, in a press release.
‘Unsurprisingly, they want their pension funds to address environmental and social factors as well. It’s also encouraging that individuals are keen to see their pension providers be transparent about how they ensure their underlying investments follow best practice.’
