Direct ethical investment platforms

Direct ethical investments allow individuals to create change by playing a part in supporting, often smaller, environmental or social projects.

Investment can be a tricky area to get your head around, before you even begin to think about ethics. Only around one third of people in the UK currently hold investments in shares. 

This is unsurprising really because, with investments, there is a risk of losing all of your money if companies or projects fail. The average amount of savings in the UK was around £10,000. It makes sense to have good financial defences before taking investment risks, and most simply cannot afford, or do not choose, to take these risks.

Our guide to ethical investment funds examines funds which claim to be ethical, but there is another way of thinking about ethical investment.

Direct Ethical Investments

The table below shows some good examples of projects which have been seeking money this year through three of our favourite positive investment providers. Normally, this kind of investment involves buying shares directly from a small company or social enterprise.

These shares tend not to be tradeable, unlike shares on the UK stock market, and are a much riskier bet than putting money in a pooled fund. Nevertheless, you do get to fund and support only the projects which excite you, and you will have a much more direct relationship with a project once you sign up.

If the projects are successful too, you can enjoy the feeling of having contributed to something important. On one level this approach is not very different from the types of online crowdfunding platforms which structure contributions as investments rather than donations, though the three platforms on the table screen projects to ensure they are ethical before supporting them.

Provider Focus area Some 2020 projects
Ethex Helping investors to make positive investments simply and securely
  • Property development for homeless people in Cornwall
  • Electric car and bike hire firm in Exeter
  • Affordable housing in Brighton
Abundance Investment Mobilising money for good
  • Anaerobic digestion plant for power generation at a Staffordshire farm
  • Solar panels on council-owned rooftops in Berkshire
Energy4All Funding for community-owned renewable energy co-operatives in the UK
  • Two hydro sites for the Highland Community Energy Society in Scotland
  • Rooftop solar panels for the Edinburgh Solar Community Co-operative

 

Direct ethical investment websites

Investments normally take the form of loans or shares of some type, and there is always a risk that you may lose the whole of your investment if the project fails. It is advisable that you seek financial advice before making a large investment.

CFP  = crowdfunding platform

 

ETHEX the positive investments website, is going from strength to strength. It collates and lists most of the best positive investment opportunities that come up in the UK. In May 2015, for example, it listed nine renewables projects of which seven were solar arrays and two were hydro schemes. Although it covers more than renewables and looks at savings as well as investments, renewables have been where the bulk of its work has been to date.

One of its great virtues is that that it provides a ‘health check’ of projects before they appear on the site – thus removing extremely risky ones from the mix. 

Minimum investment is £1-£2000 depending on which project you invest in, and you can pay online. 01865 403 304 | help@ethex.org.uk | www.ethex.org.uk

Social Stock Exchange (SSE)’s website contains a list of members whose businesses have social and environmental aims at the core of their activities. The SSE admission process ensures that members adhere to a clear set of values, standards and disclosures, and an impact report is created and updated annually. Current members include conventionally-traded healthcare service providers, charity bonds and a renewable energy company.
Can create an investor’s account online. No minimum investment stated on website. members@socialstockexchange.com | www.socialstockexchange.com

 

Overseas development & microfinance

Microfinance involves individuals making small loans to small businesses or low-income individuals or those who don’t have access to typical banking services within the Majority World.

Kiva is a non-profit organisation aiming to connect lenders with borrowers in the Majority World in order to alleviate poverty. Small loans, as little as £15, are sent directly to microfinance institutions within countries (called Field Partners), who administer the loan. Minimum investment £15. Can lend online. CFP www.kiva.org

Lend With Care (LWC) is an initiative from CARE International UK in co-operation with The Co-operative Group. Entrepreneurs within the Majority World approach local microfinance institutions with business proposals. If approved, business proposals and the entrepreneur’s portfolio are uploaded to the LWC website and individuals can select businesses to loan to. Minimum investment £15. Can lend online. CFP 020 7091 6000 | info@lendwithcare.org | www.lendwithcare.org

Oikocredit is a worldwide financial co-operative that finances and invests in microfinance institutions, co-operatives and small-medium enterprises in the Majority World, with the aim of creating a positive social impact. Minimum investment £150; Apply online and pay by cheque. 01995 602 806 | www.oikocredit.org.uk

Shared Interest is a community benefit society which acts co-operatively and specialises in supporting Fairtrade organisations within the developing world. You can open a Share Account by going to Shared Interest’s website. Minimum investment £100. Can set up a Share Account and pay online. 0191 233 9100 | info@shared-interest.com | www.shared-interest.com

 

Community shares, co-operatives & IPS investments

Community shares differ in that they are normally ‘withdrawable’, and can be sold back to the relevant co-operative or community benefit society. It is therefore easier to get your money back from a community share. An IPS is an Industrial and Provident Society which is one form of organisation permitted to make this kind of issue.[1]

Community Shares’ website has a directory of enterprises issuing community shares and provides extensive information on what a community share is and what it entails. Current investments include local pubs and wind turbines.
Minimum investment varies depending on projects. Payment methods vary depending on the project.
communityshares.org.uk

Microgenius’ website is a platform operated by the Community Shares Unit, that allows individuals to find enterprises and offer to invest directly online. Current investments include rebuilding Hastings Pier.
No minimum investments. Can buy shares online via go-cardless.
www.microgenius.org.uk

Consultancy.coop’s website, www.shares.coop, has a directory of live community share offers. The website is an independent, co-operatively owned market place for shares in Industrial and Provident Societies (IPS). Visit the website or email sales@shares.coop for more information.
Minimum investment varies depending on projects. Payment methods vary depending on the project.

 

Renewable energy

The last ten years has seen a spectacular growth of community renewables projects in the UK. These had in part been boosted by government incentives such as tax advantages for investors (EIS) and guaranteed returns for investors though the Feed-in Tariff scheme for electricity generators.

To the dismay of campaigners, and in an astonishing display of short-sightedness, most of these incentives were removed or severely curtailed by the new Conservative government at the end of 2015. Although, at the time of writing, there were still many projects seeking investments which were set up before these changes were introduced, most people predict a reduction in such schemes in the medium term. 

Nevertheless, there will continue to be investors and projects driven by a desire to work on mitigating climate change and, as there were before the incentives were introduced, innovators and great projects will still be available. 

Projects are only usually seeking funding for short periods of around three to four months, and there are commonly at least a dozen projects seeking funding at any one time. Because of this, we have not listed individual projects here, but instead have listed five of the main ‘overview’ schemes which can help UK investors find and fund community renewable projects directly with their own money.

Abundance Generation specialises in UK-based renewable energy projects and was the first crowd-funding platform to be regulated by the FCA. Individuals are able to deposit money online and then invest in specific projects according to their preferences.

Abundance has recently launched the ability to hold Abundance investments in a Self-Invested Personal Pension (SIPP) and investors can apparently view how much electricity their projects are generating, depending on how windy or sunny it is. Investors from anywhere in Europe can invest in Abundance projects, and you can invest as little as £5 and can complete all transactions online.
Minimum investment £5. Can lend online. CFP 020 3475 8666 | contactus@abundancegeneration.com | www.abundancegeneration.com

Energy4All is a not-for-profit social enterprise dedicated to expanding the number of renewable energy co-operatives within the UK. It is different from the other schemes, in that it is owned by the co-operatives it assists and is a vehicle for them to offer mutual support to each other. It lists current share offers on its website for ethical investors. 01229 821 028 | info@energy4all.co.uk | energy4all.co.uk

Sharenergy a not-for-profit organisation that helps communities find, build and own renewable energy generation throughout the UK. The website also advertises share offerings for community renewable energy schemes. 01743 277 119 | info@sharenergy.coop | www.sharenergy.coop

Triodos has played a major role in offering community bonds which support a range of projects working towards a sustainable future and now has its own crowd funding platform. 01179 739 339 | www.triodos.co.uk

Repowering London helps develop community (solar) energy projects in London, periodically listing on its website those that are seeking funding from ethical investors. 07960 829 826 | www.repowering.org.uk

 

Also see our product guides to ethical investing, fossil-free investment funds and ethical savings accounts

 

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