Other Responsible Investment options
A number of sectors are emerging as potential forms of Responsible Investment. This page explores emerging cross-cutting themes which could be the focus of many forms of investment.
In this section:
Microfinance
Microfinance examples
Renewable energy
Renewable energy examples
Further information
Microfinance
Microfinance consists of making very small loans to individuals to establish or expand a small, self-sustaining business. It is used as a tool to reduce poverty in developing countries. Pioneered by the Grameen Bank in Bangladesh, the term microfinance can include a range of financial services offered to poor communities.
Investing in microfinance may be of particular interest to charities that work to alleviate poverty.
Microfinance examples
There are currently few mainstream opportunities to invest in microfinance, but the options are growing. An example includes:
Oikocredit describes itself as an ethical investment fund, which finances development projects in the developing world benefiting disadvantaged and marginalised people.
Renewable energy
The renewable energy and bioenergy sectors include:
- biofuels
- biomass, solid waste and biogas
- geothermal
- mini-Hydro
- marine
- solar
- wind
(source: New Energy Finance)
Climate change is of increasing significance on the political agenda. Government support, high energy prices and carbon trading have combined to make renewable energy investments increasingly popular.
More than £36 billion of new money was invested globally in clean or renewable energy or clean technology in 2006, an increase of 43% on the previous year. (New Energy Finance)
There are opportunities to invest in the renewable energy sector across a range of asset classes. These opportunities are mainly in pooled investment funds, rather than direct investment in renewable energy companies. There are estimated to be over 1,200 private equity funds targeting environmental projects and 50 renewable energy companies have listed on the AIM market. [New Energy Finance) A number of pooled investment funds also target companies that promote sustainable environmental practices and/or support sources for renewable energy.
Renewable energy examples
Examples include:
Impax Group provides services in the environmental markets sector including an investment trust, a private equity and a venture capital fund.
New Energy Fund LP manages a pure alternative energy hedge fund
Triodos Bank’s Renewable Energy Fund allows investors to invest in the small scale renewable energy sector.
Disclaimer
The featured products have been selected as examples only. The inclusion of a particular fund does not imply an endorsement of it. Moreover, the use of an example does not imply a recommendation of it over any other example or further example used or of any product not listed.
Further information
New Energy Finance is a London-based research company
For more details on these and other asset classes see the UKSIF publication
Discovering New SRI Institutional Investment Opportunities. Download report
