Are you an ethical investor?

As consumers and investors, we have more power than ever before to not only influence our future, but the future of both our local and global communities. One way we can do this is with how we choose our financial investments.

What is ethical investment?

When we choose to invest “ethically” we are making a conscious choice about the businesses, sectors and industries we support - we know where our money will be used and what for.

Also known as socially responsible investment, green investment or impact investment, ethical investment has a dual focus on financial returns alongside choosing opportunities to support positive social and/or environmental impacts.

With the right information we can balance our quest for supporting investment options that drive ethical community growth with dividend benefits in a win for all.

Why should I be an ethical investor?

As an investor, your decisions not only activate the present - they shape the future.

Ever looked at the front page of a newspaper to see the lead story about a large corporation breaching human rights, leaving a path of destruction in its wake? How would you feel if your investment dollars had funded the operations of that business?

Historically, it has been all too easy for those businesses purely focused on financial gain to secure investment while cutting corners to the detriment of communities and countries, along with their people.

However, as investors we now have the power to determine the ventures and values we support, which can drive a change in focus, behaviours and operations of the industries we are seeking to become more responsible.

The bottom line is that your investment dollar not only supports the industries and businesses you believe in, it sends companies a clear message about the expectations investors have if they also want to be financially supported.

Some examples of industries or opportunities to consider

Which social causes are close to your heart?

There is a countless range of causes or themes we can use as the basis for ethical investing, from affordable housing to sustainable property development, human rights, microfinance, energy use, agricultural development and more.

When designing an approach for your investment portfolio, research the causes that are close to your personal beliefs or principles.

Combine this research with expert financial planning and investment advice to ensure you are best positioned to secure the financial and social outcomes you are seeking. Work with finance professionals who maintain a membership with organisations such as the Responsible Investment Association of Australia.

Responsible investment strategies

Generally, when working with financial professionals, a spectrum of screening strategies and approaches are used to determine the best fit for your needs.

This spectrum is illustrated below:

Positive screening is a process of identifying the businesses that demonstrate strong environmental or social performance and/or who offer sustainable products and services. Negative screening aims to exclude those industries and businesses that may cause a negative social impact, such as gambling, alcohol and tobacco.

The screening process that considers positive and negative contributors will depend on your preferred industries. Applying this screening helps to narrow down which ventures to invest in.

Targeted impact investing is also an option for those who are wanting to support or generate positive change in addressing particular social, economic or environmental issues. These targeted areas may be across affordable living and housing, healthcare, education, renewable energy, sustainable agriculture, microfinance, conservation and more.

Remember, it’s your investment dollar - you have the right and responsibility to decide where it’s directed.

Learn more about what it means to be a World's Most Ethical company

® “World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC. The World’s Most Ethical Company assessment is based upon the Ethisphere Institute’s Ethics Quotient (EQ) framework and honours superior achievements in transparency, integrity, ethics and compliance. Teachers Mutual Bank Limited has been named one of the World’s Most Ethical Companies from 2014-2021, and includes subsidiaries Teachers Mutual Bank (2014-2021) UniBank (2016 - 2021), Firefighters Mutual Bank (2018 - 2021) and Health Professionals Bank (2021).