Awareness of ethical financial products is low

A third of investors are likely to consider ethical issues when buying their next financial product, according to a survey to be published on Thursday.

Banks and financial institutions should prioritise protecting human rights, tackling climate change and investing in fair trade, the 1,073 respondents to the survey by research organisation Eiris said.

Avoiding ‘sin’ stocks such as companies in alcohol, gambling or armaments – which have traditionally been the focus of ethical investors - was of far less interest.

But awareness of ethical financial products remains very low, the survey found, with 62 per cent of those surveyed unable to name any ethical financial products. 35 per cent of respondents said they would not buy ethical products as they “do not trust the claims of financial providers”.

“Levels of awareness, trust and confidence in ethical finance are worryingly low,” said Mark Robertson, communications and development manager at Eiris.

Other respondents said they would not buy ethical products as there was no external verification of the ethical claims made on behalf of the products, while a greater number felt there was not enough information available on how ethical products could make a difference.

Only 15 per cent thought that ethical products were less likely to perform as well as similar standard products.

The survey was commissioned as part of this week’s National Ethical Investment Week.