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Finance

2005-02-28
As of July 2002, occupational pension providers will be legally required to disclose environmental and ethical information regarding their schemes. Therefore the ethical performance and actions of companies will be available to anyone who requests it.

This forthcoming legislation has prompted many pension providers to produce ethical funds, with more expected to follow. A major issue with ethical investment is financial performance, and how much of this is affected with environmental considerations. The public feeling for this situation is summed up by a recent Ethical Investment Research Service (EIRIS) survey which showed that although 75% of people thought that their pension fund should operate an ethical policy, only 37% would compromise a lower rate of return.

However, the requirements for a company to be considered ‘ethical’ today, are not as exclusive as they have been in the past, when only smaller outfits were deemed ethical. Now, it is accepted that there is no such thing as a ‘perfect company’, and this way, financial performance is not conceded to ethics, and vice versa.