A recent report from Mintel consumer, media and market research analysts has disclosed that ethical shopping has reached new heights with rising demand for organic and fair-trade products, and also many more shoppers recycling packaging. This growing trend reflects consumers concerns about global warming and the exploitation of developing countries.
In June 2007 representatives from the United Kingdom organic sector urged the Environment minister David Miliband not to allow organic food to be contaminated by genetically modified organisms. It is evident according to the Food and Drink Federations organic group that one of the main reasons consumers buy organic is to avoid eating food contaminated with G.M. The government is proposing to increase the threshold for G.M. contamination of organic food from 0.1% to 0.9%. This move is fiercely opposed by the Soil Association who argue that it is not economically sensible for the government to tamper with current regulations given that the organic market is one of the fastest growing areas of the U.K. economy. It has been confirmed by the Soil Association and Organic Farmers and Growers however that they would maintain the current non G.M. Standard of 0.1% whatever is decided by government. The government’s stance is in line with the E.U. regulation recently adopted. Although G.M. companies were consulted by government it was reported that no direct contact was made with an organic business. Which might lead us to conclude that ‘money’ talks.
Whilst the organic food industry is growing fast the same can be said for the global market for organic cotton which is reported to be booming. Consumers are no longer simply eating organically they are wearing organic clothes, using personal care products and equipping bathrooms and bedrooms with textiles made from organic cotton. The fashion industry has an enormous impact on the environment in terms of textiles used; and it could be argued that it is very positive for ethical consumers that designers such as Katherine Hamnett and Stella McCartney are including organic cotton garments in their collections. There is now a greater choice of organic cotton clothes than ever before. At Sonesuk we have an exciting range of baby and children’s clothes designed in the U.K. Organic cotton production is estimated to increase over the next three years as more farmers join existing projects and further planned projects reach fruition. Farming organic cotton is based on a system that maintains and enriches soil fertility without the use of toxic pesticides and fertilizers and genetically modified seeds. All of this is generally good news for consumers that are aware of both what they put into their bodies and what they clothe themselves and their children in. But we should be aware of strong market forces determined by profit and market domination seeking to pursue their own interests to the detriment of others.
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SustainableBusiness.com reports that the U.S. natural products industry grew 9.1% in 2005 totalling $51.4 billion (USD). This includes increases in purchases of organic foods, green cleaning products, and cosmetics.
Natural products retailers account for half the sales at $25.5 billion and, for the first time since 1999, they experienced double-digit growth at 10.9%. Internet sales are growing rapidly, reaching $558 million. Mass-market (food, drug, club and convenience stores) rose 8%; direct-to-consumer sales rose 6.4%.
This could mean that either American consumers are becoming more aware of green products, or the availability of these products is growing, or both - despite the leanings of the U.S. federal government.
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Continuing on the theme, here are tips six through ten.
6. One percent in community investments makes a huge difference. If you are buying a CD, buy one from a local bank, so that your money stays in the community. Preferably, buy the CD from a community development bank that makes loans to underserved communities. Heck, it’s all federally insured.
7. Investments in Eco-efficiency pay off huge. For commercial building owners, every dollar saved in energy expenditures equates to about six dollars in appraised value, if you go by cap rate valuation. For homeowners, $1 saved in operating costs equates to about $20 in appraised value. This is according to Fannie Mae, which is falling over itself to lend money to homeowners who are willing to invest in efficiency improvements.
8. Costs can be controlled, returns can not. Ok, this is an echo of Clements’ column. The average mutual fund charges 1.57 percent in expenses every year. If you go with the low cost options charging less than .5 percent, the one percent difference will result in a six-figure difference over 30 years. Meanwhile, diversification and asset allocation are the keys to minimizing the downswings of the market.
9. Socially Responsible Investing is not a fad… unless you make it so. Although the 60’s generation would like to claim it, people have been making choices to not let their money enable injustice in the world for thousands of years. It’s in the religious texts of Christianity, Judaism, and Islam. However, it is now easier than ever to accomplish thanks to focused research, institutional will, and communications technologies that spread ideas. That said, even an SRI portfolio that is not sufficiently diversified can crater. For example, don’t concentrate your portfolio in clean energy technologies, climate technologies, or green building technologies. Those fields can, and probably will, result in a bubble some day.
10. Have a plan. This, too, is no different than our non-SRI brethren. Just as in any journey, you have to know where you are and where you want to go before you can get there. To sound a little less like Tony Robbins, you need a strategy in place that takes into account where you are now, for what you want to save, how long you have, and the shortest journey to get there. I am consistently shocked and amazed at how many people take a cavalier, do-it-yourself attitude with their long term finances while at the same time, spending days on end comparison shopping buy a refrigerator.
Mark Brandon is the author of the Sustainable Log Newsletter and Blog, as well as the managing partner of First Sustainable, an investment advisory catering to socially responsible investors. During February, new subscribers to Sustainable Log can designate $1 to rescue endangered girls, protect endangered gorillas, provide medicine to Sudanese refugees, or one of 36 other great causes through Alternative Gifts International.
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Tags: ecostreet, ethical+investing
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