Money & Rights

Is it Possible to Be a Successful Ethical Investor?

Investors around the world are often known for their sharp analytical skills and ability to spot a potentially lucrative investment. They are not, however, known for their scruples, and plenty of investment money goes into fairly unethical ventures.

This may be understandable, given that investors are mostly driven by profit, but recently the practice of ethical investment (investing only in causes which have a neutral or positive impact on the world) has been growing, with more and more investors looking to invest in ethical companies/causes. Here are some considerations about ethical investment.

Restricted Choice

Perhaps the most obvious place to start would be with the main disadvantage of ethical investment, which is the restricted choice it offers when choosing assets for a portfolio. An ethical investor will undoubtedly have to leave some potentially profitable investments in favour of more ethical choices.

This could harm their overall profitability, especially if they are inexperienced with investment. That being said, many investors now use financial advisors (who in turn often enlist the services of specialist investment advisors like Wellington Management Funds) to help them choose investments and form a cohesive strategy.

Worthy Causes

Despite the restricted choice, ethical investment is still a worthy cause, and with a little bit of quality research, it is still possible to make a very healthy profit from ethical sources.

Not only are many ethical investments worthy causes, but those which make a positive impact (such as green energy companies) are actually poised to perform very well for the foreseeable future, given that they are likely to have widespread support of governments and citizens across the world.

Global Movements

The world is not the same place it was twenty years ago, and the global population is, in general, now far more aware of the major issues facing different countries as well as humanity. As such, more and more startups and established companies are taking heed of the appetite for social and environmental responsibility.

This means that many of the new and emerging businesses across the world can be considered ethical, given that they operate to ethical guidelines and are trying to maintain a positive impact throughout the entirety of their lifespan. Investing in these companies in the startup stage could well prove to be very lucrative if they become successful.

In many ways, ethical investment presents many advantages to the investor. Not only can they boost the success and growth of ethical causes, but they can also profit from the growing demand for companies to be more ethical.

What do you think of these tips? Have anything to add?

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