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Not content with taking over Northern Rock, billionaire Richard Branson has his eye on even more green. We don't mean just money, though, we mean Virgin's new green investment fund, which launched yesterday with the intent to invest in businesses that are dedicated to making their operations more environmentally friendly.
The Virgin Climate Change Fund will only invest in companies that score higher than average in their sector on an environmental scale, and which they think will make you money (we suppose that part's obvious).
Virgin Money did some research prior to the green fund's launch that showed that 29 per cent of customers favoured products and services from environmentally aware companies.
"The climate change issue is too often seen as one where consumers have to pay a price. There is too much 'stick' and not enough 'carrot,'" says Virgin Money CEO Jayne-Anne Gadhia.
To handle fund management, Virgin has teamed up with GLG Partners, and to handle rating companies for environmental success they're working with Trucost. GLG has apparently returned an average of 16.8 per cent since launching their first fund in 1997, which bodes very well indeed.
Anyway, you only need to invest £50 per month, or a £500 lump sum to join the scheme, so it's open to more people than the average managed fund. On top of that there's a 20 per cent performance bonus and only a 1.75 per cent annual management charge with no initial charges.
There's actually quite a bit of choice out there already in terms of 'green' funds, with more than 90 available to UK investors -- so much so that global sustainable investment specialist EIRIS launched yesterday a green funds directory. In the UK, Jupiter has had socially responsible investments for nearly 20 years, and they have a number of green funds, like the Jupiter Environmental Income Fund.
The trouble is, there are different versions of green out there -- some funds look out for companies that are working to help the environment (often called 'light green' funds), while others actively don't invest in companies that are involved in unethical practices, like mining or arms dealing ('dark green' funds).
The latter are actually considered greener, since with the former, there's nothing to say they can't invest in tobacco and oil. Unfortunately, the Virgin project sounds like more of the former. Either way, Virgin as a whole has been doing quite a bit to be more environmentally friendly, and in our view, something is always better than nothing.
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