Episode #42 - Put your money where your mouth is


 

The Better Business Show, in association with Triodos

 
 
 

Show notes

To Mark Good Money Week, Triodos has carried out a new survey into ethical and social investment. And the good news is that more than 60% of UK investors would like their money to make a positive contribution to society and the environment.

However, according to the survey, many people struggle to find options for socially responsible investments (SRI).

  • 62% say they would like their money to support companies which are both profitable and make a positive contribution to society and the environment.
  • More than half (58%) think that people should invest their money where it can support companies that make a positive contribution to the planet and society.
  • 47% believe that companies trying to make a positive contribution to society and the environment are likely to succeed in the long term.

But here’s the rub. 51% have never been offered the option of investing in SRI funds.

The SRI retail market is now worth over £15 billion in the UK – up from £12.2 billion three years ago; the demand for more responsible and impactful investments is clearly there.

But most investors have not been offered sustainable and ethical investment opportunities, and 46% would not know where to go to find out more about them.

The survey findings also challenge a perception that ethical funds are less profitable than mainstream investments, as survey respondents see investing in sustainable and ethical funds as ‘smart investment’ and nearly half (47%) believe that companies trying to make a positive contribution to society and the environment are more likely to succeed in the long term.

Indeed, over the last three and five years, the FTSE All World (which excludes fossil fuel companies) has outperformed the FTSE All World index. And this year, the MSCI SRI index has outperformed the MSCI World index (YTD).

It's a point we made during Episode #7 of the Better Business Show when we spoke to Ian Monroe at Etho Capital. And it's clearly a trend that shows not sign of slowing down.

The purpose of Good Money Week (which kicked off yesterday and runs until 5 November) is to raise awareness of sustainable, responsible and ethical finance – and to point people in the right direction.

This week, I caught up with Simon Howard – the chief executive of the UK Sustainable Investment and Finance Association (UKSIF), the organisation behind Good Money Week – to find out more.

Enjoy the show.

You can find out more about Good Money Week here: www.goodmoneyweek.com. And the website for UKSIF is here.

 


 
 

As part of Good Money Week, Triodos is really demonstrating the positive impact of socially responsible investing. There are plenty of options for you to put your money where your mouth is. If you like the idea of your cash playing a truly positive role in society and in supporting environmental change, then take a look at the Triodos offering – go to the website triodos.co.uk/goodinvestments for more information.


Episode #41 - The East London start-up space with a difference


 

The Better Business Show, in association with Triodos

 
 
 

Show notes

If you’ve been to the East End of London lately, you’ll know what has become of the place.

Many blocks east of Old Street station have been utterly transformed over the last 15 years – much like places like Brooklyn, in New York - with a new, gentrified community of hipsters, marketing agencies, tech start-ups and entrepreneurs having moved in, renting out converted houses, warehouses and old office blocks. It has become a really buzzing place, and whenever I’m in the area for meetings, I love just wandering around and soaking up the unique atmosphere of this little pocket of London.

Auro Foxcroft, owner of Village Underground, sitting in one of the venue's train carriage start-up spaces.

Auro Foxcroft, owner of Village Underground, sitting in one of the venue's train carriage start-up spaces.

Well, if you wander along Great Eastern Street, you'll get an even more unique experience. For on top of the row of buildings, almost jutting out into the street, are a series of graffiti-ed tube carriages and a bunch of shipping containers.

And this is the home of Village Underground, a cultural and creative hub in the heart of East London. Part creative community, part arts venue, Village Underground is housed in a renovated turn-of-the-century warehouse primed for everything from concerts and club nights to exhibitions, theatre, live art and other performances. And it’s also a place where start-ups can rent space to work from.

But there’s more to it than that – from the way it was developed, to the way it is run. This week, the owner of the venue, Auro Foxcroft, gives us the inside story.

Check out the VU website for more details.

Oh, and the Better World Podcast Collective I mention in this week's show is here.

Episode #39 - What's the point of banking, anyway?


 

The Better Business Show, in association with Triodos

 
 
 

Show notes

Since the economic crash of 2008, the world’s financial institutions have been desperately rallying to regain public trust and restore their licence to operate.

As we know, the recklessness of some banks triggered a disastrous string of events – many of which have been played out, illustrated and re-enacted by books, articles, plays and films during the last 8 years.

The practices of those institutions in which we put our trust, our faith – and our money – to use it wisely, has, quite rightly, been put under a microscope like never before and has encouraged more and more of us to question the purpose of banking.

I bank with HSBC. I have done all my adult life. I remember going into my local branch (it was called The Midland Bank back in the 1990s) when I was 16 having started my first Saturday job, filling in some forms and waiting for my cheque book and bank card to arrive in the post the following week. It was such an exciting moment in my young life. 

But never did I once question whether I could trust that bank to take care of my money. Never did I ask where that money would be spent while I entrusted the bank with it.

As I say, I’m still an HSBC customer, for both my personal and business accounts; the rigamarole of switching accounts has always put me off. I’m not disgusted by what HSBC stands for – in fact, in some areas, like its investment in climate research, it is showing leadership – and so I have remained as a loyal customer.

But perhaps where we keep our money needs to be challenged once in a while.

And, this month on the Better Business Show we have a perfect opportunity to do just that. 

What’s the point of banking? What can financial institutions, with all their power and influence, do to help create a better, fairer and more sustainable world?

This week, we spend some time with Bevis Watts, the UK managing director for Triodos Bank, a company which believes that banking can be a powerful force for good: serving individuals and communities as well as building a more sustainable society. 

The businesses uses its €12 billion of customer deposits to generate social, environmental and cultural value in a transparent and sustainable way. Triodos isn't just a bank: its changing the way banking is done. And its customers – some of which we are going to be meeting in the next few weeks on the show – are helping to build a movement that’s cultivating positive social, environmental and cultural change.

You can find out more about Triodos and the way it conducts its business, at triodos.co.uk – where you can also find out just what sort of companies, organisations and projects it is supporting right now.

Enjoy the show. And, as ever, let us know what you think.

Episode #7 - Etho Capital, proving there is a better way to invest

Show notes

In the drive to find solutions, technologies, gadgets and gizmos that create positive social and environmental change in the world, the importance of money – its movement, and how and where that money is spent, cannot be understated.

After all, money makes the world go round.

The trouble is if the world’s big money remains tied up in pension funds, bonds and financial instruments that continue to pay for unsustainable products, services and fund traditional, and unsustainable business models - then it’s going to be really hard to change things. Have a look at the best performing companies on the various global stock exchanges and they are littered with firms from extractives, oil, coal and other big dirty industries.

So, what can be done? Well, there’s plenty and the exciting thing is that so-called divestment - taking money out of funds and pots which are helping to support unsustainable companies and industries - like oil and gas, like tar sands – is a movement which has been steadily gaining traction these past few years.

From Bill McKibben's 350.org campaign to shut down of the world’s most dangerous fossil fuel projects, to The Guardian’s Keep It In The Ground, launched by the outgoing former editor Alan Rusbridger as a sort of legacy vanity project, hundreds upon hundreds of thousands of people are galvanishing to push for the big foundations, like the Gates Foundation, to divest from fossil fuel schemes.

In September 2015, it was announced that institutions and individuals representing more than $2.6 trillion in assets under management are committed to fossil fuel divestment. And this number is only likely to grow, as 84% of millennials say they favour ESG investing, and roughly $41 trillion will pass to millennials from baby boomers over the next 35 years.

Of course, the concept of socially responsible investment – where enlightened investors that care about the planet, rather than just making a quick buck, are engaging with responsible and sustainable companies – has been around for decades now.

According to Pensions & Investments magazine, money managers practicing socially responsible investing now control almost $6.6 trillion, representing 18% of all U.S. assets under management. That figure has grown 76% in just two years.

Clearly, the conventional wisdom that investors who bring to bear moral and ethical concerns forfeit potential profits by screening out companies in certain sectors, such as tobacco, doesn’t hold up. A report by RBS Global Asset Management says that between 1990 to 2012, the KLD 400, an index of socially responsible stocks, has maintained a higher return on investment than the S&P 500.

And plenty more evidence and research reports pointing to the same sorts of results. It’s no wonder financial heavyweights like Goldman Sachs Group (GS) Inc. and Bank of America Corp. are embracing SRI too. Last summer, Goldman spent $550 million to buy Imprint Capital Advisors LLC, which utilizes SRI. The same month, Bank of America reported it has invested more than $8.6 billion using SRI strategies.

These profit-seeking investing giants aren't using SRI because it's trendy. They're using it because it works.

Yet some financial experts still don't see the potential profitability of SRI. They believe that investing with an eye toward “social responsibility” — spending money to improve working conditions, reduce pollution or give back to the community — limits portfolios and sacrifices returns.

There’s still a long way to go before we see the mainstreaming of SRI and divestment out of dirty industries.

This week’s Better Business Show guest is a man at the heart of this debate and certainly sees the value of channelling monies into the greenest and most progressive of companies. Ian Monroe is the co-founder and chief sustainability officer at Etho Capital, an investment management company committed to taking sustainable investing mainstream.

Enjoy.

You can find out more about the business and the Etho Capital Leadership Process on their website. Here's the link to the ethoetf.com Ian spoke about.

And for more on Ian, check out his LinkedIn profile.

Oh, and don't forget to subscribe to the show via iTunes.