Pension Advice

Choosing the correct Ethical or Socially Responsible investments will depend on your own beliefs and values. A starting point is to use a screening process.This will help you to analyse which types of industries and companies they would like to either include or exclude.

There are primarily two types of screening, positive and negative.

Negative Screening

The process of Negative Screening excludes investments that you might consider undesirable. For example you might want to exclude some of the following:

  • The arms or defense industry
  • Nuclear power
  • The tobacco and/or alcohol production
  • Gambling
  • Genetic Engineering
  • Third World debt/exploitation
  • Animal Testing

Positive screening

Positive screening helps to identify the businesses that demonstrate the potential to offer good quality, long-term ethical investment opportunities. The positive screening process will help you to avoid businesses that could encounter problems as their day to day operations might not be sustainable in the long term. Positive Screening might include companies involved with

  • Projecting a positive business focus
  • Energy conservation
  • Promotion of Equal Opportunities
  • Renewable Energy
  • Pollution control

Shareholder Engagement

By employing active shareholder engagement it is possible for shareholders and fund managers to encourage a more corporate and social business approach.

It makes sense to consider investing into companies that have the foresight and willingness to adapt.

Categories: Investment