New research from Mongoose Energy, the UK’s largest manager of community-owned renewable energy assets, has found that investors are willing to take on higher-risk funds if their money delivers an ethical impact.
The survey shows that 60% of consumers would prefer their investment to ‘do good’, as opposed to investing in less impactful, lower-risk options.
This is a growing trend, says Mongoose, with 21% of people more likely to invest in this type of fund now than they were five years ago. And almost a quarter (24%) of people would consider investing in an ethical fund that shares its profits with the local community or supports renewable energy generation.
This desire for impact has also led to consumers demanding more transparency about how their money is used once invested, with two thirds (61%) stating that this as important to them.
The insights coincide with the launch of over £4m in bond and share offers in community-owned, renewable energy by Mongoose.
Its chief executive Mark Kenber said: “The findings of this research show an increasingly purpose-minded public of all ages seeking out alternative ways to invest their money. Their investment choices are no longer driven solely by high rates of return but also by a desire for tangible, positive impact on local communities.
“With the public now demanding that their money is invested in ways beneficial to both people and planet, 2018 is showing all the signs of being the year that investing in community energy goes mainstream.”
Mongoose Energy has launched two new bond offers and a share offer.
The first bond offer has been established by Heart of England Community Energy (HECE) and is for the UK’s largest community-owned renewable energy project, based outside of Stratford-upon-Avon, Warwickshire. HECE is seeking to raise £1,000,000 in funding and is offering investors target returns of 5%, paid annually over four years.
Our Community Energy (OUCE) has established a bond and share offer for its wind farm projects in Pogbie and Brockholes, Scotland. These offers are seeking to raise £1,200,000 and £1,845,000 respectively and offer inflation-linked interest rates which, while they may rise and fall over 20 years, currently deliver returns of 6.6% and 8.1% respectively.
Those who sign up and invest in these offers before the first half of the target funds are raised will earn an additional 1% of interest in the first year– although capital is at risk and returns are not guaranteed.
As the offer also includes an ISA option. Investors still needing to use their ISA allowance can take advantage of it, or alternatively transfer their existing cash ISAs at any time.
The surplus profit from these projects, estimated at £2.7m and £1.9m respectively, will be invested into helping to protect the elderly and vulnerable in Warwickshire, and into helping alleviate fuel poverty in Scotland.