1.85 million Brits financing 'positive investment' market
A record 1.85 million people across the UK have invested a total of £3.6bn in ways that to create positive social and environmental impact, according to a market update from investment platform Ethex.
‘Positive investments’ in ethical banks, community shares and businesses with a strong social or environmental mission grew by 11% last year - more than four times faster than the 2.4% average growth of UK household savings and investments over the past five years.
Community share offers make up the most active section of the market. Over the past year, 75 new offers raised £36m, bringing the total invested to £157m - a growth of 29%.
Community-owned renewables projects remain highly popular in this subsection, with 48 community share offers raising £26m in the past year.
Jamie Hartzell, founder of Ethex and author of the report, said: “Public demand for investments that make money and do good is so great that the market is on course to grow to £11bn by 2020, involving nearly four million people.”
“Positive investment delivers strong social and environmental benefits to society at little or no cost to the taxpayer. To unlock this potential it is essential that we continue to improve the choice and quality of positive savings and investment products and make people aware of these opportunities. We’d also like to see the Government do much more to encourage this market.”
Bath is the most active hotspot for community investing - up from third place last year - largely thanks to Bath and West Community Energy which raised over £4.5m for three solar power projects.
Lancaster and the Lake District is second, as the High Winds Community Energy offer raised £3.75m to finance the repowering of five wind turbines near Ulverston, the UK’s second largest community share offer.
The figures mean that 2.9% of the UK population now have some form of positive investment. A recent survey by Barclays Bank found that, while only 9% of investors had made impact investments, 56% were interested in doing so.
However, the Ethex report also offered a warning message: it claimed that cuts to subsidies for renewable energy will have a “dramatic impact” on the community energy sector - the fastest growing area of direct positive investment over the past three years.
This follows similar warnings from energy ministers in Scotland and Wales who wrote to Amber Rudd in August, urging the Energy Secretary to consider new ways to protect and support community energy schemes. Community energy can boost energy security and cut transmission costs, they said.
Likewise, in her first speech as Shadow Energy Secretary, Labour’s Lisa Nandy recently claimed that every community should own its own clean power station.