Published on May 28th, 2014 | by Pete1
Investors Warm To Green Bonds
Ethical investing is on the increase as more of us become aware of the need to ensure that we are not making a profit at the expense of other people or the environment. So many investors these days are on a quest to avoid businesses that are involved with tobacco, alcohol, weapons, pornography and gambling and are looking at other methods of investing that will deliver a reasonable return on investment (ROI). More of us are becoming interested in socially responsible investment (SRI) and are looking to encourage responsible corporate practices that promote human rights, consumer protection, diversity and environmental stewardship. Investing in clean, green energy production is now a feasible way of generating income without it costing the earth.
Socially responsible investment opportunities are on the increase in the UK as a result of the government’s commitment to reduce carbon emissions. The Climate Change Act calls for 15% of the UK’s energy to be sourced from renewable resources (for example, solar and wind power) by the year 2020. With the domestic consumption of energy in the UK accounting for just 34% or our total energy use, commercial and public premises account for 18% and industry uses a whopping 43%. It’s pretty obvious that business and industry will have an important role to play in ensuring that the government’s carbon emission reduction targets are met.
Socially responsible investment has now become mainstream due to the global economic downturn and the need for ‘responsible capitalism’. A recent Guardian report described SRI as “an important consideration for actors across the financial sector”. The United Nations has backed the Principles of Responsible Investment which were created by an international group of institutional investors to reflect the relevance of environmental, social and corporate governance issues in investment practices. Signatories to the Principles include banks, asset managers and pension schemes from around the world.
Investing in clean, green energy is one way of ensuring that your investments are not damaging the planet, but helping to forge a new age of enlightenment when it comes to sourcing the power we need to make the world go round. Investing in green funds like renewable energy resources and clean energy projects has become an increasingly efficient and cost effective means of investing. Green energy bonds are becoming progressively more popular with several new opportunities coming on the market.
Green energy bonds are issued in order to raise funds to develop and install solar and wind installations in the UK. One such Energy Bond is using the funding to install solar panels on the roofs of schools and businesses across the UK free of charge to the company or school. The panels provide the business or school with enough electricity to significantly reduce their utility bills (by up to 20%) while the income generated by the government’s Feed-in Tariff (FiT) is used to provide investors with an attractive rate of interest way above that derived from cash ISAs or High Street bank savings accounts, albeit by taking on higher risk.
If you’re looking for socially responsible methods of investing for the future, then why not consider Energy Bonds? You won’t just be investing in your own future; you’ll be investing in the future of the planet so that it can be enjoyed by future generations.