Positive investing has risen by 11% over the last year according to a report published by Ethex.
The Positive Investing Report drew data from the Community Shares Unit, 3D Investing and the Association of British Credit Unions (Abcul), as well as Ethex’s own data bank of positive investments. Ethex, which is based in Oxford, is a small non-profit which aims to create a marketplace for positive investments, through its online investing platform. It lists investments by type and enables investors to compare, research and understand the investments available.
The amount saved and invested ‘positively’ across the UK has now reached £3.6bn, according to the report, with the number of people making positive savings and investments also growing, by around 100,000 to 1.85 million.
“Positive investing is about individuals staying in touch with their finances and choosing to save and invest in businesses that not only offer a financial return but also make money do good,” said Jamie Hartzell, chair of Ethex, and Lisa Ashford, CEO, in their introduction to the report.
“In just over two years, Ethex has helped more than 2,600 individuals to invest close to £20 million in almost 40 charities, companies and community businesses.”
The report states that the fastest growing area was direct investment in community shares, charity bonds and company bonds and equities, which grew by 31% on the year – largely because of the increasing popularity of internet-based crowdfunding.
However only a handful of crowdfunding equity and lending platforms put the social or environmental objectives of these businesses centre stage, says the report. “Until more direct positive investments are available on the stock exchange, they will not reach a mass market, and it will also remain extremely difficult to invest in them as part of any pension scheme.”
It adds that while for the majority of people bank accounts are the most common point of contact with the financial system, “with the difficulties faced by the Co-operative Bank, there is currently no truly positive bank account available”. However it acknowledges that ethical bank Triodos plans to start offering its UK customers a current account in 2016.
The report highlights several co-operatives that provide the opportunity for positive investing, including Energy4All. “The co-operative was formed in 2002, but its roots go back to 1996 with the establishment of Baywind, which built the UK’s first community-owned wind farm at Ulverston,” says the report. “Baywind’s members were keen to extend the co-operative model to other areas of the UK and set up Energy4All to achieve this.”
During 2014 and 2015, Energy4All helped to launch nine share offers, all of which achieved their target.
Community energy was the most popular sector between 2014-15, with 49 offers raising over £25m for investment. There was also increased investment in community-owned rural broadband initiatives and football clubs, while the number of share offers for community-owned shops and pubs declined markedly, with only 10 offers across the year, compared to 69 offers in the two years from 2012 to mid 2014.
According to Ethex’s research, the two most active hotspots for positive investment over the last year were Bath, and Lancaster and the Lake District, which between them raised over £10 million from 10 offers. Last year’s winners Oxford and Bristol moved to third and fourth place.
Another hotspot listed was Hereford and Ludlow, which attracted investment of £900,000 through five share offers; four of these projects were co-operatives (Ludlow Hydro, Pomona Solar, Ledbury Community Solar and Herefordshire New Leaf), and the fifth Burley Gate Community Shop.
Over the next five years, Ethex believes that positive saving and investing will reach 6% of the population, or 3.8 million people, with each person positively saving or investing on average 20% of their financial wealth.
- Read the Positive Investing Report in full here.
In this article
- Association of British Credit Unions
- Baywind Energy Co-operative
- Community Shares Unit
- Community wind energy
- Ethical banking
- Foreign direct investment
- internet-based crowdfunding
- Jamie Hartzell
- Lisa Ashford
- online investing platform
- people bank accounts
- The Co-operative Group
- United Kingdom
- United Kingdom
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