The following is a brief and necessarily incomplete summary of some of the views held on some of the key issues. Bear in mind that issues and attitudes change with political, economic, social and scientific developments. These are not 'UKSIF definitions' of particular green and ethical issues and they are by no means definitive. Some sample investor views are also included in boxes to provide an indication of the range of some of the attitudes you might encounter.

One aspect to be aware of is that in many areas, there are both negative and positive aspects to a given ethical issue. For example, oil and gas companies may be the leading source of emissions of carbon dioxide, a major greenhouse gas – but they may also hold the key to more environmentally friendly future energy solutions.

If you want to understand more about these issues, the internet is a very good source of information, as are the press and the many books written on these subjects, or industry organisations offering green and ethical investment.

If you are familiar with concepts and terms around social, environmental and ethical issues, you may wish to go straight to the end of this section. But do note that this part of the course may be covered in the test.

Social issues where some companies cross the line into unacceptable behaviour can be found in a range of activities, both in the UK and (more often) overseas.

Access to medicines

A criticism of some large healthcare and pharmaceutical companies is that they make few concessions to the economic position of most of the populations of developing countries, and aim to charge them the same prices for much needed drugs as they achieve in advanced markets. Proponents of greater access to medicines argue that pharmaceutical companies could supply drugs at their marginal cost of production, or licence generic drug manufacturers to produce low-cost drugs. Some say that this would protect rather than damage the companies' business model.

Bribery and corruption

Bribery of government officials and other purchasers, and illegal payments, may take place in some industries, especially in the context of sales of large contracts to developing countries. This can perpetuate poverty and is often linked to human rights abuses.

Corporate governance

Shortcomings in the way that certain companies are run have sometimes derived from the structure of their organisations and in particular their boards. In such egregious cases as Enron, criticisms have included insufficient effective checks or balances on management action, especially by independent non-executives or auditors.

Health and safety

Companies that put short term profitability above safety are of concern. Some companies have excellent safety records while others have poor attitudes and procedures.

Human rights

Basic human rights – which we take for granted in most developed countries – are lacking under some regimes round the world. Some companies supply products and services to regimes that do not respect human rights, or operate or buy goods in countries where human rights violations are common (Burma is an example of a country of concern).

Labour standards

Some companies operate very high standards in their treatment of employees. Other companies allow lower standards, particularly when the employees are in developing countries or work for suppliers.

Military

Some companies are overtly involved in the production and supply of arms and military equipment. Some investors are keen to avoid any involvement whatsoever, while others may want to avoid the ownership of armament suppliers. However, other investors are happy to invest in this sector.

With the increase in concern about global warming, environmental issues have come to the fore among ethical investment issues. Sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own needs", according to the UN-inspired Brundtland Report. In addition, there are many specific environmental concerns.

Biodiversity

Companies can damage the diversity of plant and animal life, especially those involved in the extraction industries, agriculture or construction. There are also opportunities for companies in these and other industries to make positive contributions to encourage biodiversity.

Climate change

The emission of greenhouse gases is widely agreed to be the cause of climate change. We all contribute directly and indirectly to this, but some industries are major generators of greenhouse gases. Most notable are the transport and energy sectors. There are business opportunities for some companies to develop or promote more efficient technologies or to remove carbon dioxide from the atmosphere. 

Energy

The generation and use of energy involves such major issues as the depletion of resources (like oil) that cannot be renewed, contribution to climate change, and the use of nuclear energy that has long term dangers for the environment. The positive contributions that companies can make include the use of renewable resources in energy generation.

Environmental management

Some companies follow general policies about 'avoiding environmental damage' or promoting environmentally friendly policies. Certain companies aim to follow specific environmental policies relating to particular areas of activity, eg pollution, use of certain sorts of timber, use of pesticides, etc. Some companies that manufacture and use chemicals lead the way in initiating managerial strategies in how chemicals are produced and used, while others tend to make do with meeting the minimum requirements.

Genetic engineering

Genetic engineering involves changing the DNA of the cells of plants, animals or other organisms with the aim of introducing new characteristics, eg making a crop resistant to a herbicide, or introducing a novel trait. Genetically modified organisms (GMOs) are increasingly used in agriculture and medicine. Many people have concerns about the environmental impact of this, and some people are concerned about the possible medical uses of these techniques.

Mining and quarrying

The extraction industries can cause major environmental damage. Some companies take great care to minimise damage both during and after the mining or extraction process. Minerals are often located in countries ruled by oppressive and corrupt regimes.

Tropical hardwood

The hardwood trees in tropical rainforests take decades to replace. The use of this material for furniture, building and other uses puts the trees and the forests themselves in danger, and accelerates the destruction of the forests, which are in turn important for countering global warming.

Water management

Water is a scarce resource in many parts of the world, especially where populations are growing rapidly. The main issues around water management (aside from the long term political, economic and social impact of a diminishing resource) concern waste, pollution and use for non-essential purposes.

Alcohol

Investor concerns about alcohol may include health impacts, responsible marketing and their own religious values. Some may see this as a social issue rather than an ethical one. Some investors may be concerned only about the manufacture of alcoholic drinks. Others may wish to exclude businesses that generate a certain level of their turnover from distribution. Some investors may want to exclude supermarkets and other retailers because they distribute alcohol, while others may be concerned only about business activities like running bars and public houses where the proportion of turnover attributable to alcohol is higher.

Animal testing and fur

Views about the use of animals in product testing can vary greatly. Some people object to them being used in testing cosmetics and other household products, while others dislike the use of tests on animals in the development of pharmaceuticals.

Pornography and adult entertainment

Definitions of pornography vary. Some mainstream media companies as well as specialist companies might be regarded as producers of material to which some investors might well object. Distributors, such as newsagents and other retailers, cinemas and television companies, may also be regarded as a part of the industry.

Tobacco

Many people who are interested in ethical investment are keen to avoid investing in tobacco manufacturers. They might or might not be concerned about retailers – and particularly supermarkets – that are responsible for the sale of tobacco products.