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'True' Nature of Ethical Investors Revealed

Added: (Fri Dec 01 2000)

Pressbox (Press Release) - The last 20 years has seen a dramatic growth in the number of ethical investments, but little has been known about the background of ethical investors themselves and how they make their investment decisions.

New research from Bournemouth University presents a perceptive image of ethical investors and the main criteria they use to select the 'right' funds or companies in which to invest. Dr Therese Woodward, a Senior Lecturer in Accounting, in the University's School of Finance & Law, authored the research entitled "The Profile of Individual Ethical Investors and their choice of Investment Criteria".

Dr Woodward's analysis found that:
 Women are more likely than men to be concerned with avoiding investment in organisations involved in gambling, pornography and the nuclear industry;

 Those with low incomes are more likely than those with higher incomes to avoid investing in companies that use animals to test cosmetics or those that deal with repressive regimes;

 The ethical investor is most likely to be middle-aged (with over 78% between 36 and 65). They are also highly-qualified (83% hold a first degree or higher academic qualification and 86 are either professionals or in managerial occupations).

Dr Woodward has also found strong evidence to suggest that ethical investing is not a one-off activity. Her findings show that ethical investors are involved in many other socially-responsible activities including the recycling of waste materials, boycott products and purchasing environmentally-friendly goods.

"Ethical investors are interested in making a positive impact on society and the environment," said Dr Woodward. "They want to make a financial return on their investments and ease their conscience but they are not prepared to sacrifice their ethics for the sake of a profit."

Through her research, Dr Woodward found that the two most important criteria in selecting ethical investors are a fund or company's track record in avoiding armaments and the treatment of people in the third world. The considerations for ethical investors include avoiding involvement in gambling, pornography, animals used as clothing, the nuclear industry or dealings with repressive regimes.

Ethical investors would seek investment opportunities where there is a positive record in community relations, charitable donations, the provision of the basic requirements of life (food, clothing, etc), natural food production methods and/or the use of materials from sustainable resources.

"There are some 44 ethical funds now available in the United Kingdom valued at 2.8bn and investors can choose to invest in ethical unit trusts or have an ethically-linked pension or savings plan, endowment policy or ISA," she concludes. "This report goes some way to redress the paucity of information about ethical investors by providing a description of these individuals concentrating on the non-financial criteria they apply to their investments."

"The Profile of Individual Ethical Investors and their choice of Investment Criteria" by Dr Therese Woodward is available from the School of Finance & Law, Bournemouth University by mail order only, priced at 25.00 plus 1.50 p&p. To order a copy, please telephone Sarah Gray on (01202) 595428.

Editor's Note:
Review copies of the research are available by telephoning (01202) 595655 or e-mailing press@bournemouth.ac.uk. Requests for interviews with Dr Therese Woodward should be made through the Bournemouth University Press and Public Relations Office.

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