Expert View: Green investing has a new meaning now

By Elissa Bayer, December 3, 2009
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When I started in the private client department in the 1970s, I reviewed portfolios for the trust departments of the banks. One knew little about those clients apart from what investments they did not want in their portfolios. No tobacco, alcohol or gambling stocks were the major no-nos, while others rejected armaments or investment in South Africa — in those days, that ruled out Barclays.

As time went on, clients became more ethical or something called “green”, but in the early days that was regarded as a little on the fringe. It was also a little harder then to find out how companies sourced their products, and no company had to own up to much. Profit was the overriding aim and not too many questions were asked.

How times have changed as we move closer to the Copenhagen summit.

The needs and requirements of investors are altering on a regular basis. Companies of course have had to change as well, and corporate responsibility is no longer a token concept. Shareholders have a right to know how and where a company purchases its goods, treats its employees and whether the environment has been harmed or polluted as a result of its activities.

Pret a Manger, actually partially owned by McDonald’s, can tell you where their coffee was grown and when the beans were picked to indicate how fresh your latte is.

Marks and Spencer have advertisements all over their stores extolling the virtues of Fairtrade fabrics, and BP and Shell run huge campaigns to spell out how they are looking after the environment when drilling for oil. Their renewable energy campaigns may be less visible but nevertheless are on the agenda.

Global warming, the carbon footprint and ethical investments are all issues that the investment community has to be aware of and what happens at Copenhagen will affect us all and determine the type of investment and the areas of the world that we will be looking at in the future.

Wind farms, alternative energy sources and cutting carbon emissions are on the agenda of all the major economies. What the US and China say and do will be scrutinised keenly, particularly now that President Obama has said he will be attending.

It seems a long way from no purchase of alcohol shares but the informed and concerned investor now has a real place in a low carbon world.

Elissa Bayer is Director of Private Clients at Charles Stanley

    Last updated: 10:02am, December 3 2009