Over the past 5 years, the companies featured within FTSE4Good have proven that...economic dynamism can be combined with environmental and social responsibility. High financial returns can go hand in hand with respect for human rights, and the preservation of the planet’s natural resources.
Things ye should know:
Total return on FTSE4Good index in last five years = 45.0%.
Total return on All-share index in last five years = 56.5%.
As the All-share represents the opportunity cost of holding any UK equities, this implies that ethical investing has cost around 1.7 percentage points a year.
And I should imagine that FTSE4Bad has done even better than the All-Share. Now where is that Unethical Investment Fund when you need it?
Posted by: Recusant | February 09, 2007 at 04:28 PM
FTSE4Bad? Easy - Diageo, Shell, BP, BAT, Gallagher (or however it is spelt!), and a couple of casino firms... DIY is easy!
Posted by: Patrick | February 09, 2007 at 09:32 PM
Just being vicarious:
You only want claims on future cash flows? You'll enjoy X% return.
If, however, you want the said claims + the satisfaction of being "ethical", you have to pay for the added feature, so your returns are X% - a "charge" for the optional!
How much are you willing to pay?
Posted by: Karthik | February 10, 2007 at 02:21 AM
And are 'percentage points' the only determinants of policy, Chris? Is social policy also to be predicated on the movement of percentages?
Posted by: james higham | February 11, 2007 at 10:19 AM
Much depends on what you mean by unethical. Patrick's FTSE4Bad list above seems, to me, very simplistic. Just as one example, I can think of plenty of ethical uses for oil, and plenty of unethical uses for just about anything else. In fact, I find the implications behind his list unethical and I suspect I would take the same view of many so-called ethical investments.
Posted by: Steve | February 11, 2007 at 01:15 PM
This isn't exactly news, or surprising. Nor does it mean that ethical investors have been hoodwinked. Some of my pension funds are in ethical investment portfolios and I'm perfectly happy with the fact that they perform under the norm. They're still good enough for me.
Posted by: Katherine | February 12, 2007 at 10:40 AM