What is ethical finance? How it came about and what impact it has on modern society

In particular, the growth of the environmental movement has seen an increase in the use of ‘green’ or ‘socially responsible’ investment funds, which invest only in companies considered environmentally and/or socially responsible. These funds are intended as a form of protest against companies and industries that are harmful to the environment or to society. Although ‘green’ investment funds have existed since the mid-19th century, they came to prominence in the 1960s and 1970s, when a number of new funds were set up by environmental and social activists.

Sustainability and responsible investment

Sustainable investment funds aim to profit from companies that follow sustainable business practices, that is, companies that earn their money responsibly. Sustainable investment funds are sometimes also called socially responsible investment funds or SRI funds. SRI funds invest in environmentally and socially responsible companies, such as companies that produce green energy or offer fair working practices.

Community finance and crowdfunding

Community finance is a type of ethical finance that focuses on providing financial services and products to people who are not served by the traditional financial sector. Examples of community finance are microfinance, community development finance and crowdfunding.

In summary

Private investors, increasingly aware of their ability to influence the economy and the society around them through their financial decisions, are paying more and more attention to the social and environmental impact of their investments. For this reason, investors are starting to take an active interest in where their money will be invested, in particular whether it will fuel the emissions economy or the green one. Let us reflect.