How to invest with a clean conscience

As green issues have moved into the spotlight, the amount invested in ethical funds has also shown a huge increase. But do you have to sacrifice performance for principles?

If the squabble between David Cameron and Gordon Brown over who can raise green taxes the highest is anything to go by, green issues look set to influence the political landscape for some time to come. But as a survey last week from Co-operative Financial Services showed, green issues are increasingly important in the investment world too. According to Co-operative Financial Services, 67% of those planning to use their Isa allowance this year said they would consider investing in a scheme with benefits for the environment. The amount invested in ethical funds' is now £6.5bn, a fivefold increase on the same figure in 1997, according to London-based Ethical Investment Research Services (see Eiris.org). But what exactly is an "ethical fund" and do you have to sacrifice performance for principles?

What are ethical funds?

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