Does ethical investment pay higher returns?

For years, making a profit and doing good in the world were regarded as separate – if not contradictory – objectives. The assumption was that corporate social responsibility (CSR) came at a cost; namely a less competitive business that resulted in lower investor returns.

In fact, “ethical” investments are consistently outperforming their more traditional counterparts in the broader market – busting the myth that doing good necessitates financial sacrifice.

“Over the last 10 years, the average responsibly invested share fund returned 6.3 per cent a year, compared with a 3.8 per cent annual return for the average large cap Australian share fund,” says Clare Payne, Tobacco Free Portfolios’ global strategy chief and co-author of A Matter of Trust: The Practice of Ethics in Finance.

To view the full IN The Black article, click here.

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