Consumer guide to ethical investing: a clear philosophy






Consumer guide to ethical investing: a clear philosophy


Industry Voice: Investment priorities are changing. More and more people are concerned both with the investment returns they can make on their savings, and whether their money is being managed in a sustainable way.


More and more we are trying to “do our bit” – we recycle our waste, perhaps buy free range or organic food, and seek out more energy-efficient white goods. We can extend this principle to our investment decisions too.

As the saying goes “money talks”. It’s true – we can make a difference by where we choose to invest our savings, pensions and ISAs without compromising on the opportunity to grow our money.

Our range of responsible funds offers clients a way to invest in the shares and bonds of companies that adhere to certain values and standards. We do this by applying ethical and ESG principles to the selection of investments and their ongoing management.

Our responsible funds are built around a three-pronged philosophy of:



How do we set the ethical and responsible standards?

Ethics are not black and white. Whilst some standards, such as the exclusion of tobacco producers, are straightforward to implement, deciding whether companies have strong enough processes and performance in areas like climate change, labour standards and pollution control requires careful analysis, consideration and judgement.

And ethical norms and perceptions change over time. In the three decades since our funds were first launched, we have kept our criteria under continuous review, and developed new standards in areas such as oil sands, bank business ethics and climate change.

Active ownership

Once we have invested, we are active owners. We engage with companies to address ESG risks and exercise our voting rights to encourage good governance. We view engagement as critical in ensuring that positive ESG momentum is maintained. In turn, this helps support long-term risk management and performance.

We track and measure the impact of our engagement with companies. Examples of results achieved include:

Apple: strengthened its supply chain labour standards by introducing new measures to protect migrant workers, including a ban on recruitment fees.

Novartis: introduced a new Access to Medicines policy, offering a portfolio of products to low-income countries for $1 per treatment, per month.

Toyota: increased the proportion of independent directors on the Board to 25% – significant in the context of a market where until recently, all-insider boards were the norm.

New client guide available:

We have recently written a comprehensive guide for clients around the main themes of ESG investing, covering topics such as:

  • What is ethical investing
  • Whether there is a performance trade off when investing in responsible funds
  • What are the different fund categories to choose from

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Screening out sectors or companies may result in less diversification and hence more volatility in investment values.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.