insure & invest

The debate on ethical investing can become even more confused when you look at the actual carbon dioxide emissions CO2e of many of the leading so called 'ethical' funds.

A report conducted by Trucost in summer 2007, highlights the differences:

Carbon Counts 2007: The Carbon Footprint Ranking of UK Investment Funds

The report ranked the carbon intensity of 185 UK investment funds, the largest ever ranking of funds on this basis, and revealed the best and worst performing funds in terms of their Carbon Footprint. The funds were analysed across four categories: Socially responsible investment approach, growth returns, availability of income and tracker options.

Key findings:

• The Carbon Footprint of the funds analysed varies dramatically: the worst fund has a footprint almost ten times as large as the best fund.
• 37% of funds are exposed to greater potential carbon liabilities than the FTSE All-Share index.
• The impact of moving a £7,000 investment from the least carbon efficient fund to the most carbon efficient fund is 10 tonnes per annum. The average UK household emits 10 tonnes of CO2 per year.

The results:

The best performing funds overall were the SRI funds Prudential Ethical Trust, followed by AXA Ethical Acc and Sovereign Ethical.  Half of the ten most carbon-efficient funds were SRI funds and half were growth funds.

Source: Trucost, July 2007.

For a copy of this report contact us.

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