Norway’s national pension fund has sold off Euro 1.8 bn in tobacco shares, claiming its action reflects the “commonly held values of the owners of the fund.” The fund’s increasing focus on ethical investments follows a review of the Norwegian Tobacco Act and a drive to stop smoking in the country which was one of the first to ban smoking in public places.

Ethical funds now make it possible for the individual investor to opt for an ethical investment, in the same way as the Norway fund.

Having worked with a financial adviser to define your personal risk profile, you can then choose from over 100 ethical investment funds currently available on the UK market.

These are broadly divided into ethical funds based on negative screening, and ethical funds based on positive screening.

Funds investments using negative screening ‘block out’ certain industries which the investor defines as unethical, based on their activities or products.

In addition to tobacco these may avoid companies associated with animal testing, deforestation, meat production, nuclear power, pollution, military and weapons, worker exploitation, and oppressive government regimes.

Positive ethical investments go one step further and attempt to locate companies associated with a range of activities supported by ethical investors, such as biodiversity, environmental products, renewable energies, sustainable forestry, and water management.

The Principle First Ethical Investment Portfolio V1 is a an investment portfolio which takes the ‘legwork’ out of ethical investing by providing a group of investments which meet our requirements regarding low risk and high performance.

This brings to over £15bn the amount of private and public investment in the low-carbon and renewable energy sectors over the next three years.

Included in the funding is:

•  £120m for low-carbon industries in the UK, including new manufacturing and testing facilities for offshore wind
• £200m for upgrading home boilers to latest ‘green’ models
• Tax-free status on income from renewable energy generated by individuals for their home through the Clean Energy Cashback Scheme
• Exemption from company car tax from 2010 for electric cars and a 100% first year allowance for low-carbon vans

Sustainable Investments to reduce carbon

Private investors can ‘do their bit’ to reduce carbon emissions by investing in ethical funds which focus on renewable energies, wind generators and similar projects.

One such fund is the Triodos Renewables Fund, launched in 2008 by the Triodos Group.

Triodos has financed over 150 wind farms, and projects it has aided currently generate enough clean energy for over 100,000 homes.

The French concept of a ‘justice-climate’ plan could be funded by a tax on financial transactions, similar to that once proposed by the Nobel prizewinning economist James Tobin.

The comments came from France’s ecology minister Jean-Louis Borloo, in an interview recently with the French weekend newspaper ‘Journal du Dimanche’.

Revenues from the proposed eco-tax would assist the 1.2bn people in developing countries who suffer most from climate problems, lack of economic development, and exclusion from international negotiations, Borloo said.

Specific projects that could become possible through the introduction of the scheme might include hydraulic dams, solar energy power stations or wind energy facilities, he said.

As a project which would symbolise a payback from the major polluters, the industrialised countries, to those regions most affected by climate change, the plan would have an important psychological role to play in breaking the ice between the richer and poorer nations present in Copenhagen for the conference, Borloo said.

The United Nations Climate Change Conference takes place in Copenhagen from 7^th – 18^th December.