Just two years ago, there were 50 ethical funds in the UK. Today there are almost 90. Just three years ago, assets under management in ethical funds totalled £4.5bn. Today, they total almost £8bn. And as climate change not only takes centre stage in British politics, but also seeps ever deeper into the conscience of the UK public, these numbers will continue to rise exponentially. So while ethical investing remains a niche sector for now, it will soon break into the mainstream.
Inevitably, therefore, more and more fund management houses will feel they have little choice but to launch an ethical product. The problem is, many simply don't have the experience, or knowledge, to do so.
"There is no shortage of funds that don't know what they're doing", says Lee Coates, director of adviser Ethical Investors Group. He cites one example of a manager that devised its own ethical agenda but completely neglected to include any human rights or environmental impact criteria, and this even after an independent ethical data provider had been consulted. It acted in good faith, but simply did not have the necessary expertise.
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