ISA savers to press the green button on ethical investing

Would-be ISA savers are set to trigger a rise in ethical investing according to recent research from Co-operative Financial Services (CFS).

The study shows that seven in 10 people (67 per cent) who intend to use their ISA allowance ahead of the April deadline will consider placing their money into a scheme with positive benefits for the environment. And with recent performance of Socially Responsible Investment (SRI) funds exposing the myth that investors sacrifice profit for principles when saving ethically, CFS is now expecting a significant increase on the one per cent of assets currently managed in ethical investment funds.

Co-operative Financial Services provides ISA’s that allow investors to take advantage of attractive returns while investing with a conscience. The CIS Sustainable Leaders Trust – which recently became the first ever SRI fund to top the UK All Companies sector - can be used to fund a Maxi ISA. For the 12 months to 31 January 2007 the Trust provided a total return of 29.3 per cent, more than double the 13.2 per cent of the UK FTSE All-Share and the 13.3 per cent average return achieved by funds in the UK All Companies sector.

Zack Hocking, Head of Savings and Investments at CFS, said: “As green ISA’s allow investors to satisfy their hearts as well as their heads, we expect the deadline rush to be the start of a significant rise in the amount of money placed in ethical funds.

“Anyone who is yet to use their allowance for this tax year should think about investing as soon as possible. If they miss the deadline and the tax break is lost forever.”

Worryingly the survey also shows that a separate seven in 10 (72 per cent) will not be investing in an ISA during the current tax year, meaning they will lose the opportunity to take advantage of the tax-efficient benefits provided.

Customers that prefer easy access or want to avoid stocks and shares can take out a Cash Mini ISA with the Co-operative Bank, safe in the knowledge that their money will not be used to support businesses that cause harm to the environment. The Bank is the only high street bank that has a clear ethical policy.

The Co-operative Bank’s Ethical Purchasing Index shows that ethical investments rose by 10.5 per cent during 2005 and equates to over £6bn.