Consumer interest in ethical investment up 18 per cent

The number of consumers willing to invest ethically has risen by a staggering 18 per cent in the past year according to research from Co-operative Insurance.

The annual survey reveals that 85 per cent of people planning to invest into an ISA before April’s deadline will consider using an ethical scheme for their allowance, up significantly from 67 per cent when the same research was carried out last year.

Results from this survey, along with findings of other recent research, reinforce the view that the upward trend in ethical investment is set to continue:

Eight in 10 people (77 per cent) now believe that ethical investment can perform in line if not better than the mainstream market according to results from the same study,

recent IMA data shows ethical funds under management in quarter 4 2007 reached £5.9 billion, an increase of 18% against the same period in 2006

the annual Ethical Consumerism Report from sister organisation the Co-operative Bank shows the amount held in ethical personal finance products grew by 15 per cent year on year from £11.6 billion to £13.3 billion.

Zack Hocking, Head of Investments at Co-operative Insurance, said: “While ethical investment still represents a small amount of the overall market, evidence strongly suggests that growth is set to continue.

“We expect to see significant interest from customers wanting to invest their ISA allowance ethically as the deadline approaches.”

The Co-operative Insurance ethical fund - CIS Sustainable Leaders Trust – has consistently outperformed mainstream trusts and can be used to fund an ISA. For the 36 months to 31 January 2008 it provided a total return of 40.5 per cent, against 35.2 per cent of the UK FTSE All-Share and the 27.7 per cent average return achieved by funds in the UK All Companies sector.

Mike Fox, Fund Manager of Sustainable Leaders Trust, added: “Ethical funds are demonstrating that responsible investing and high performance can go hand-in-hand.

“The increasing importance of the environment, human welfare and sustainability in society means these funds should be well-positioned to deliver consistent performance in the long-term."

More worryingly, the survey also shows that a separate 60 per cent do not intend to use any of their ISA allowance during the current tax year, and will lose the opportunity to take advantage of the tax-efficient benefits.