Ethical Investment Week 2023 to Help You Invest in a Sustainable Future
Investing ethically to build a sustainable future and legacy requires overcoming complexities and obstacles like greenwashing. As a result, many investors put it in the too-hard basket or choose funds that will not meet their needs. Ethical Investment Week from 1-7 October aims to encourage people to invest ethically by helping them understand how to navigate the complexities and overcome greenwashing.
As an annual event that aims to help people understand ethical investing and make informed investment decisions, Ethical Investment Week is coordinated by the Ethical Advisers' Co-op which comprises a group of leading ethical advisers, including Money Matters.
Research from New Zealand’s financial market regulator, the Financial Markets Authority (FMA) reveals that many individuals find ethical investing perplexing and intimidating. Many feel overwhelmed and unsupported, often leading to sidelining ethical considerations. Some even resort to over-simplifications, opting for a single ethical fund provider. This can result in unintentional investments contrary to one's values.
Highlighting the challenge in choosing funds, global research company Morningstar recently evaluated 108 asset managers worldwide. Only eight earned 'Leader' status in ESG (Environmental, Social, and Governance) Commitment Level, while most scored merely 'Basic' and many scored ‘Low'.
Recent spikes in concerns about greenwashing further illustrate the challenges for ethical investors. Misleading information can undermine faith in sustainability-centric financial products and corporate initiatives.
In response to its concern about greenwashing, the Australian financial market regulator ASIC (the Australian Securities & Investments Commission) has initiated several interventions, including issuing public infringement notices and launching civil penalty proceedings. The FMA has highlighted concerns in the New Zealand context stating that “Marketing without underlying substance won’t wash, green or otherwise”.
The ASIC Chair Joe Longo has highlighted that greenhushing - in which companies react by stopping all voluntary disclosure of ESG information - is just another form of greenwashing.
The International Organisation of Securities Commissions (IOSCO) is spotlighting sustainable finance during World Investor Week from 2 – 8 October. The focus is investor education and protection.
Hosted in New Zealand by the FMA, the New Zealand theme for World Investor Week 2023 is ethical investing, aiming to empower investors to confidently make investing decisions that are aligned with their values.
Sarah Wood, Co-Chair of the Ethical Advisers Co-op, says the heightened focus on combatting greenwashing and improving investor education from regulators and media alike is encouraging. “Similarly, the focus for Ethical Investment Week, from 1-7 October, is to provide education and guidance that is essential for people who want to invest their money ethically and build a sustainable lifestyle and legacy.
"The week offers an opportunity for investors to gain insights and engage with dedicated, specialist ethical investment advisers. This can help ensure their investments genuinely reflect their values and intent. Celebrating its tenth year of organising Ethical Investment Week, the Co-op has launched an updated Ethical Investment Guide.”
The guide, complemented by the Co-op's Ethical Fund Ratings, is designed to help investors see how to work with an adviser to align their investments with their ethical values. The guide and details of Ethical Investment Week events offered by Co-op members, including Money Matters, are accessible on the Co-op's website.
If you want to learn more about ethical investing, we encourage you to participate in Ethical Investment Week. There's something for everyone, whether you're a beginner or an experienced investor.
Here are some steps you can take towards ethical investing:
Find out about ethical investing by visiting https://www.ethicaladviserscoop.org/ and the Money Matters ‘Resources’ page.
Talk to Money Matters about reinvesting your portfolio into more ethical investments
Contact the funds and/or companies that you invest in and ask them what they are doing about environmental and social issues.
Investing ethically can be a great way to positively impact the world and build a sustainable future. Start your journey with Ethical Investment Week this October.