Almost all investment has collapsed onto a simple idea of maximising your return. But what if you don’t want your investments to harm society and the world? What if you want to help the world and make a great return? What then? Into this gap steps ethical and impact investment.
Tom is CEO of Tickr which he co-founded to open up impact investing to the general public from as little as £5. As well as a career in this area he also did a masters at Oxford Business School on the topic so is well-placed to guide us thorough the maze.
Some of the first ethical investment funds were shariah-compliant Islamic funds. With these in broad terms ethical means not investing in alcohol and armaments and other such categories. At a more detailed level a religious authority rules on whether an individual company is or isn’t “ethical”.
Ethical investment is clearly A Good Thing but once it spread to more secular lands definition became problematic. Furthermore it turned out that between “all white” and “all black” investment lay a huge grey area.
More recently impact investment has appeared on the scene where the focus is not so much avoiding investing in “bad” companies but targeting “good” companies.
Once again though we have a problem that in the real world good and bad are not black and white. For example I might consider Brewdog to be a great company – ethical and impactful (as producing great beer responsibly seems to me both ethical and impactful). However for you this might be neither ethical nor impactful?
So if the principle is simple – ethical investment is clearly Good and impactful is clearly Good. But who defines? The challenge lies not in the concept but in the practical implementation.
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