London, 19 September 2013
“Terry Smith’s reported comments that ethical funds perform badly and are riddled with internal contradictions appear ill-informed and naïve.
A recent report from moneyfacts.co.uk shows ethical funds up 36% on average over 3 years compared with 31% for the average non-ethical fund. Investment has to be forward-looking. For instance, for pension funds to passively accept exposure to assets that derive their value from burning carbon or from using finite resources, when those activities are likely to be challenged by emerging scientific and societal consensus as to their consequences, seems exceedingly dangerous. Such fundamental issues may prove to be as material to investment returns in the next decades as interest rate moves and globalisation are deemed to be now…
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Simon Howard’s response follows comments made by Terry Smith at the Institute of Directors, as reported here