Two-thirds of people intend to become more socially responsible this year, but 82% doubt whether their investments will meet their personal ethical standards, according to independent financial advisers Charcol Holden Meehan.
As much as 95% of the 2,000 people surveyed said that they would be uncomfortable supporting certain activities with their investments. For 80% of people, the main area of concern was the support of exploitative labour or oppressive regimes.
More than two-thirds of people said they would feel uneasy investing in companies that were involved with pornography, animal testing or armaments, while just under half felt the same way about companies involved in genetically modified crops.
Despite their ethical intentions, some 30% said they did not know their savings could be being used to support companies involved in what they consider to be unethical practices. Meanwhile, a further third were unaware that they could actually control where their money was invested.
Similarly, a significant minority expressed concern that investing ethically would result in the performance of funds being impaired. In fact, however, socially responsible funds have outperformed mainstream funds by almost 10% over the last five years, with the sector returning -4.03% compared with the FTSE All Share's return of -13.77% (Source: Lipper).
"A number of recent world events will have prompted many to look at their own lives and how they could be more socially responsible," said Charcol sales director Philip Chapman. "Yet millions of well-meaning investors may be inadvertently supporting companies linked to unethical practices, through lack of awareness, which could be increased through greater company disclosure.
"Investor power, channelled through expertly run ethical funds, can have a huge impact on the development of companies' attitudes towards corporate and social responsibility."