Ethical Investment Association
November 17, 2008

RADIO 2CBA FOCAL POINT COMMENTARY BROADCAST ON FRIDAY MAY 26, 2000 ON RADIO 2CBA FM

We all have principles and most of us – in one way or another – are now investors. But do our investments match our principles?

The Ethical Investment Association was launched on May 24 by John Elkington, a British expert on sustainable development. I attended the launching.

“Ethical investment” is the integration of personal values with investment decisions. It is an approach to investing that considers both profit potential and the investment’s impact on society and the environment.

Most people do not think about what activities their invested money is actually supporting. Additionally, there may be problems with doing research into the activities. But all this is now beginning to change.

About one billion dollars are now invested in ethically managed funds in Australia. This is a comparatively small sum compared with the US but the trend is very positive.

The churches were among the pioneers in this field. The Uniting Church, for example, has had an explicit policy on this matter since 1982. Indeed, I was one of the authors of the investment guidelines almost two decades ago. Most of the money in the ethically managed funds is still from the various churches across Australia.

But now the secular world is beginning to pay more attention to this matter. There have been two main reasons for this development.

First, Australia now has more investors than ever before. Indeed, on a per capita basis, Australia now has one of the world’s highest rate of shareholders. This is due partly to the privatization process, whereby government assets have been sold off. Additionally, there is a growth in superannuation arrangements and so people are being obliged by government to become investors to pay for their own old age.

Second, there has been a change in values. This matter was examined by John Elkington. Businesses now realize that the community expects them to have a greater sense of corporate responsibility. They have to put something back into the community and they have to be careful about what their policies are doing to the community and the environment.

Consequently, over the past decade or so a service industry has developed in Australia to meet the growing demand of people who want to get involved in ethical investment. Such people include fund managers offering ethical investments to the public and industry, financial advisors, researchers, and individuals, entrepreneurs, companies and governments who want to create the opportunities for investing money in a socially and environmentally positive manner.

Hence the creation of the Ethical Investment Association, which will bring these people together in a professional body. The Association’s primary objective is to promote the concept, practice and growth of ethically, socially and environmentally responsible investing.

People can now put their money where their beliefs are. They will be able to invest with a clear conscience.