A Growing Market

The ethical finance market comprises of a number of sectors so a single, overarching market value does not exist. A range of figures have been provided below and whilst they look at different areas of ethical finance, the common theme is that they are all increasing.

A Growing Market

The economic slump, and ensuing mistrust of mainstream banking organisations, that has occurred since the 2008/2009 recession the financial services market resulted in increased demand for alternative services and products that are perceived to be more transparent and ethically and environmentally sound. The continued diversification and availability of ethical finance products and services has fuelled the rapid rise in the number of customers switching to alternative banking organisations

Global Investment

At the global level the Principles for Responsible Investment, supported by the United Nations, are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice. The Principles were developed by investors, for investors. In implementing them, signatories contribute to developing a more sustainable global financial system. Since launching with 100 signatories in 2006 there are now around 1,500 signatories, from over 50 countries, representing US$60 trillion. There are six principles.

Six Principles

  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the Principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the Principles.
  6. We will each report on our activities and progress towards implementing the Principles.

Key Facts

Global Islamic Finance

According to CityUk the global market for Islamic financial services increased by 12% to $2 trillion and is expected to top $3 trillion by 2018.

UK Ethical Funds 

EIRIS estimates that, as at end of July 2015, there was over £15 billion invested in the UK’s green and ethical retail funds. This estimate is based on around 83 UK domiciled green or ethical retail funds. Hereof, it seeks to not include UK money invested in ethical funds domiciled outside of the UK. This has grown from £3.2 billion in 2000 and £10.9 billion in 2010.

UK Credit Unions

Ethical Consumer’s Market Report 2015 indicates that the value of the of the credit union sector in the UK increased from £183 million to £2.2 billion.

UK Ethical Banking

The ethical banking sector has grown at a relatively consistent rate over the past 5 years. Key Note estimated that the market value increased by 7.1% overall between 2010 and 2014 to reach £22.12bn, representing around a fifth of the total financial services sector in the UK, in terms of value.