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Ethical Investment

Ethical investment is the process of investing into business opportunities in line with ethical principles. This usually involves choosing companies whose mission is to help the community and avoiding businesses that are morally objectionable.

As such, ethical investment is similar to both social or sustainable investing and impact investing, in that both ‘positive screening’ and ‘negative screening’ can be used in the evaluation process.

An ethical investor is still focused on businesses which aim to generate a return on capital invested but will take ethical considerations into account when evaluating investment opportunities.

On the level of the individual investor, this screening process will come down to personal preferences.

On an institutional level, ethical investment funds can be split into two categories: ‘dark green’ and ‘light green’ ethical funds.

Dark green ethical investment funds use an investment strategy like social investors where they use ‘negative screening’ to avoid investing in companies which seem unethical.

Light green ethical investment funds follow the ‘positive screening’ style of impact investors i.e. they actively target companies aiming to make a difference to an environmental or social challenge in an ethical way.

The extent to which a company is deemed ethical will often come down to the personal view of individual investors, but a general definition for an ethical entrepreneur or ethical business could be: a company that is socially responsible in some areas while remaining profit-driven.

Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. SeedTribe is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via SeedTribe once you are registered as sufficiently sophisticated. Please click here to read the full Risk Warning.

This page is approved as a financial promotion by SeedTribe Limited, which is authorised and regulated by the Financial Conduct Authority. Pitches for investment are not offers to the public and investments can only be made by members of seedtribe.com on the basis of information provided in the pitches by the companies concerned. SeedTribe takes no responsibility for this information or for any recommendations or opinions made by the companies.

The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.