The challenge continues for managers of ethical funds, in their quest to verify which companies really meet their ethical investment criteria.
Ethical watchdog EIRIS claims that almost half of manufacturing companies fail to monitor the record of the companies in their supply chain, with regard to workers’ rights and labour standards*.
EIRIS found that 45% of companies analysed had no ethical policy or management systems in place to protect labour standards among their suppliers, and therefore fail to report on the issue.
Focusing on developed world large and mid-cap companies, EIRIS found that 13% were high or medium risk for supply chain labour standards.
The consumer industry was by far the largest offender, accounting for 66% of these companies.
Products with the greatest likelihood of poor labour standards in manufacture are clothing, footwear, toys, consumer electronics, and agricultural items.
Interest in ethical funds investments is growing extremely rapidly in the UK. EIRiS reveals there is currently £7bn invested in ethical funds in Britain, compared to £1.5bn ten years ago.
Seventy per cent of people in Great Britain consider their outlook and lifestyle to be green and ethical, and 49% of people with savings and investments would like to make a difference with their money, EIRIS adds.
However, investors remain sceptical of how ethical so-called ethical investments really are, and 44% claim that clearer evidence is needed of the ‘green’ impact of ethical investments.
*Source: ‘A Risky Business’, EIRIS Convention Watch research
