There is no hard and fast definition of what makes an investment ethical. Knowing how your investments are screened, though, is a good start.

Companies are facing increasing consumer and shareholder pressure to ensure the investments they make are ethical. But how do they define what’s ethical?

Broadly, ethical investment is on the rise. According to the Responsible Investment Association Australasia (RIAA), about $1tn of the $2.24tn in managed funds is classified as responsible. That’s not just because Australians are becoming more aware of the impact their investments can have, but also because responsible or ethical investment is really starting to pay. Sustainable, environmentally friendly and socially conscious businesses are often making essential contributions to our future. Through superannuation, banking and shares, people are actively putting their funds into such ventures.

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