Is it acceptable to include major oil companies such as BP in an Ethical/Sustainable fund?
In the aftermath of BP’s Deepwater Horizon rig explosion, America’s southern states and coastal communities are now facing an economic and environmental disaster. With the scale of devastation and economic loss, particularly to the valuable shrimp industry, it is very difficult to justify an oil company’s inclusion in any investment fund categorised as Ethical/Sustainable.
Although you may be investing in a fund, which advertises itself as Ethical/Sustainable, the chances are it includes major holdings in some of the world’s major energy and oil companies such as BP, Shell, Statoil and Petrobras.
BP, the company currently at the heart of one of the worst ecological disasters to date, could be at the heart of your Ethical/Sustainable fund.
Oil and gas companies are often justified for inclusion in sustainable investment funds due to their mitigation efforts, they may be some of the largest polluting contributors in the world, but develop a few environmental initiatives and some spin and suddenly they are ‘sustainable’.
With a potential 19m gallons of oil that could continue to pump into the Gulf of Mexico from the Deepwater Horizon rig, it underlines the question of what exactly constitutes a Sustainable Investment Fund?
There is no doubt oil will continue to play an important role in our future but that doesn’t mean it should get elevated to Ethical/Sustainable status.
It is our view that when green investors decide they want to make a difference with their investment, it is with a view to making a real difference and helping to encourage companies who are working in what we call Primary Sustainovation industries.
Principle First’s investment advice experts, have devised a unique ‘Sustainovation’ Ranking Index to assist ‘Green-minded’ investors to identify the funds that live up to their investment ideals. Funds categorized as having the top ‘Primary Sustainovation’ ranking are those that are investing almost entirely in companies and sectors that directly influence future sustainable energy, energy efficiency and resource management.
The Ethical/Sustainable investment funds with the Primary Sustainovation ranking are:
Allianz RCM Global Eco Trends Fund
Henderson Global Care Growth Fund
Henderson Industries of the Future Fund
IFSL Impax Environmental Leaders Fund
IM WHEB Sustainability Fund
Jupiter Ecology Fund
Quadris Environmental Fund
Investors should note that these are not necessarily the highest or best performing funds in the Ethical/Sustainable sector, but in our opinion they are the ones which provide the best fit for living up to the high investment ideals of the ‘Greenward’ investor.
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