When making an ethical investment in BHESCo investors can be sure their money will deliver meaningful positive impact
Recent years have seen a significant rise in the popularity of social impact investing, with the amount of global funds under management in this market quadrupling from £2.29 trillion in 2010 to £8.87 trillion in 2020[1].
There is a new ethos among investors who want to know that their hard earned money is being used to tackle the social and environmental challenges that we face.
Or at the very least, they don’t want their investments to be tied into sectors which actively harm people and the planet, such as tobacco, arms, ruthless industrial development and fossil fuels.
This latter form of investing is known as ‘ESG’ investing (Environmental, Social and Governance). It involves screening out companies whose operations do not meet certain ESG criteria. This means that although these funds do not engage in harmful activities, they do not necessarily actively support positive change either.
Almost all investment platforms now offer a ‘socially responsible’ or ESG investing option. Investors can be confident that their money is not contributing to social and environmental damage, and may in fact be creating positive change.
However, even when it comes to funds which proactively invest in companies that deliver societal benefit (such as alleviating poverty or tackling climate change) it can be difficult for the investor to know exactly how their money is being used.
For example, with Exchange Traded Funds (ETFs), a very common and affordable option for investors, finances are pooled collectively and invested across a huge range of sectors and services.
Why it can be difficult to measure impact with ETFs and investment funds
While it is possible to choose an ETF that has a focus on socially responsible investing, it is very difficult to know exactly where your money is going, especially when investments are spread across dozens of countries and hundreds of industries. An investor would need to dig down into the investment portfolio of each ETF they held shares in, and then research the operations and goals of each company invested in.
Furthermore, many ETFs themselves invest in other ETFs, adding further complexity and opacity to the end use of investors’ money. This lack of transparency is what lead to the financial crash of 2008.
Compare this to an investment in BHESCo or another community energy group.
Each of our share offers focusses on raising the finances for a specific collection of new projects. Each of these projects is supported by its own economic model that benefits the customer, the local community, and supports BHESCo’s growth.
When people buy shares in BHESCo they can be certain that 100% of their investment is going towards the purchase and installation of low-carbon technologies, as detailed in our Share Offer Prospectus which is updated for each particular share offer.
For example, our current share offer is raising funds for a suite of new community energy projects in Sussex including schools, a business park, and industrial estate, a winery, and an equestrian centre.
In contrast to the complex financial instruments involved with ESG funds and ETFs, investing in BHESCo couldn’t be more transparent.
What’s more, unlike the distant and unclear outcomes of a retail investment fund, investors in BHESCo (many of whom live in the South East) can actually go and see first-hand the renewable energy projects that their investment has helped to realise.
Recent examples of projects that our shareholders can easily see for themselves include the 91kW solar panel array installed at Plumpton College, which is visible from the South Downs Way or the 29.7kW array installed at Patcham Junior school, which is visible from Ladies Mile road.
Providing clearly defined and measurable impact
It should go without saying that, when it is unclear exactly where your money has been invested, it will also be impossible to measure what positive impact your investment has made.
Some impact investment platforms publish an annual impact report which records certain metrics such as tonnes of CO2 saved or organic meals served. These reports usually encompass the activities of the organisation as a whole and not the specific fund in which you have chosen to invest.
When choosing to take part in a BHESCo share offer, members can see the impact their investment will make before they decide to invest.
When combined, BHESCo’s 58 community energy projects reduce annual CO2 emissions by 451 tonnes.
All of our community energy projects are carefully designed with detailed forecasts of the financial and carbon emissions savings that we expect to achieve as a result of installing certain energy saving or generating technologies. This provides our investors with the confidence that they are earning an attractive financial return while making a meaningful and measurable difference towards tackling climate change.
Furthermore, when someone buys shares in BHESCo they become a member of the co-operative, giving them an opportunity to vote at AGMs and to have equal say in future direction of the business.
Investing in small business to drive the UK economy out of recession
Investing directly in local small enterprises also helps to keep money flowing around the local economy instead of being siphoned offshore to foreign investors.
By supporting locally owned clean energy projects, BHESCo members can take pride in knowing that they are directly supporting local job creation and economic growth. The same cannot be said of placing money in funds which might just invest in other funds or financial instruments located around the globe.
As with all consumer choices, the most agreeable type of investment platform will depend on a person’s circumstances, financial goals and individual values.
For investors who want confidence that their money will deliver tangible positive impacts on a local level, while also providing an attractive financial return, an investment in BHESCo is an extremely appealing proposition.
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