I know this because I was once in that camp myself. I was not outwardly dismissive but, if asked the question, would say something along the lines of: “How can SRI be expected to perform as well as non-ethical funds when their investment universe is restricted? Surely this means that fund managers miss out on lots of opportunities” or “People are more worried about their profits than their principles”.Both these arguments have substance but not in all cases and that is the key point. Ethical and environmental funds do have a restricted range of stocks into which they are able to invest. This typically means that if certain “unethical” sectors such as oil or tobacco companies are doing well then these funds will struggle to keep up. Of course, the flipside to this is that if these sectors are doing badly, then ethical funds will be at a distinct advantage. It should also be remembered that most other funds are limited, at least to some degree, with regard to where they can invest. Take, for example, equity income funds. There may be yield constraints restricting eligible stocks, there could be geographical constraints with all investments in the UK and all are in just one asset class. Is this really so different? People are more interested in profit than principles. In many cases, this may be true but it is not universal. In our experience, clients are bec-oming more aware of the negative impact that some companies have on our lives. If an adviser is simply selling investment funds, it may be they never need to consider ethical criteria. The demand for ethical funds is still significantly less than the demand for top-performing “mainstream” funds. But if an adviser is performing an holistic financial planning role, then the situation is different. They need to understand the client fully, what their circumstances are, their aspirations and, yes, their beliefs and principles. They will soon discover that some clients do care what activities their investments are supporting and, from that position, it is more difficult to be dismissive of SRI. If a client does have ethical or environmental beliefs, the next step is to dig deeper and find out what they are and what, if any, steps the clients is happy to take. The adviser will need to explain the possible consequences of investing in line with those beliefs. The stronger the client’s opinions and the more determined they are to invest according to these views, the smaller their possible investment universe will be. This does not necessarily mean lower returns but is likely to lead to less diversification, more volatility and more risk. This needs to be explained and then the adviser and client can make an informed decision on investing. Would you want to invest in companies that are the biggest contributors to climate change and global warming? Would you want to invest in companies that sell arms to third world nations while many of their people starve? Would you want to invest in companies that test on animals for cosmetic purposes? The reality is that you probably already do all of this and much more. Some of you will care enough about one or more of these points to do something about it and some will not. The only way to find this out is to ask them rather than assuming they have exactly the same beliefs as you do. From my own perspective, I have stopped buying food at the supermarkets. There are many reasons behind this – the way they treat their suppliers both in this country and in underdeveloped nations, the way animals are treated to keep down costs, the chemicals they have on their food to make it look nicer so my little boy will eat and because I hate pushing a trolley. I now go to local farm shops and get a regular organic fruit and vegetable delivery – tastes better and is cheaper than the supermarkets. I recycle what I can at home and have become more conscious of wasting energy or water. I do not currently invest ethically but it is something that I am seriously considering.