We found 11 online brokers that are appropriate for Trading Ethical Investment.
Ethical investing involves investing in financial assets while considering moral values, social issues, and ethics. As of 2020, there has been around 30 Billion euros invested into ethical investment funds, while other investment funds from Europe saw a different scenario: 148 billion euros withdrawn. Today there are thousands of investment derivatives that can be considered ethical funds or ethical blended funds, but it is still difficult to pick the right investments.
In May, there was a study with 2,002 adults from the UK that addressed this topic, with some participants being investors and some non-investors. The study found that the biggest issues were: the environment, climate, employee rights, gambling, tobacco, and weaponry. While 43% answered that they do not consider any issues prior to investing, we can still find investors that tackle such concerns as these.
In the same study mentioned above, participants were asked if they had positions in ethical funds. 40% of the investors said, 'yes'. When asked to clarify the definition of ethical investing from a random list, only 10% of investors were correct, while 6% of non-investors were correct. The investors were also unclear about the correct definitions of Socially Responsible Investing; Environmental, Social, and Governance (ESG) Investing, Impact Investing, Dark Green Investing, Light Green Investing, and Sustainable Investing. So, we can see that neither side knows the correct industry labels nor how to properly define ethical investing. To add more jargon to this, none of these terms are regulated, nor do they have a defined system of how to be accredited. The goal of these labels is to reflect the differences in which traders should pick their investments.
An ethical fund should have negative and positive screenings, and should be actively managed. In such funds, the fund manager chooses investments, but investors can talk to the manager and ask for changes. Passively managed funds, such as tracker fund, screen their investment companies by the manager fund or by the index that they copy, such as 'FTSE4Good'. Either way, when creating their portfolio, these ethical funds use data to screen companies. The data used is the ESG ratings and industry labels that are provided by the companies themselves, or by other surveying companies.
There was a report in 2019 which argued that the Financial Conduct Authority should react to companies that use false and inappropriate labels for advertising. Overall, companies use poor classification to pick what is ethical and what is non-ethical investing. 'Credit Suisse' reported that there is low correlation between ESG ratings assigned to companies by surveying and rating agencies.
We also reached out to 'Vanguard' as to whether investors should be confident in the data used to compile their portfolio and their funds. It replied that it was confident of its data only for the purpose of excluding investments, for example in its ESG Developed World All Cap Equity Index Fund. 'Vanguard' also stated that the data used from the industry labels is not reliable enough for inclusion screening, for example to find companies that meet ESG criteria.
So, long story short, there are inconsistencies in corporate disclosures and third party assessments, nobody can prove whether companies are acting morally, ethically, and/or sustainably.
As ethical investing is taking off, we need strict rules on how to properly use the ESG ratings and what counts and what does not count as an ethical company. The EU, with support from the FCA, published a report in May that standardizes how companies report their environmental impact. When this goes into effect in 2022, companies will show a percentage of how much environmentally aligned their investments are.
Investors look to fund managers to make changes. Of the 2,002 adults that we surveyed, 42% believe that fund managers should pressure companies to act responsibly. In March, the 'Share Action Campaign' group rated the biggest fund managers on their responsible investment management. 'Vanguard' scored the lowest, suggesting that, albeit they use strong data to analyze the environmental approach of their companies, there has been poor management of such data. Unfortunately, even though investors consider the environmental impact and try to incorporate ethical investing in their portfolio, the reality of things is that this is not always their overall commitment. They might be affected by environmental issues or other important issues, but it is not indicative of their overall investment strategy. But why do we have such disparities? Why isn't ethical investing their overall investment strategy? This brings us to our next question.
It has been assumed that investing by your values will make you feel like a better person, but will not make you rich. The recent data disagrees, especially with COVID-19, we saw some companies face backlash for employee rights and work conditions. Interestingly, during this time, ethical and sustainable investors saw smaller losses in their portfolio. Some ethical indices have outperformed the 'FTSE 100' and 'FTSE All Share' during the past decade. For example, the 'Morningstar UK Sustainability Index' has performed well in the past decade. We should also point out that negative screening reduces the variety of portfolios and thus, reduces the possible profit. As any portfolio, investing in only one company, or only one industry group, does leave you open to market volatility and its side effects. A lot of traders try to include different ethical funds as part of their portfolio, so they will be financially diversified yet compliant with environmental and social issues.
As explained, there are plenty of companies that can be included in a diverse, profitable, ethical, and environmentally friendly portfolio. The issue is the use of industry labels. For the time being, if you want to align your investments with your values, you need to do some research and find the correct companies that are compliant with social and environmental issues.
We've collected thousands of datapoints and written a guide to help you find the best ethical investing for you. We hope this guide helps you find a reputable broker that matches what you need. We list the what we think are the best Ethical investment brokers below. You can go straight to the broker list here.
There are a number of important factors to consider when picking an online Ethical Investment trading brokerage.
Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.
We compare these features to make it easier for you to make a more informed choice.
Here are the top Ethical Investment Brokers.
Compare Ethical Investment Brokers min deposits, regulation, headquarters, benefits, funding methods and fees side by side.
All brokers below are Ethical investment brokers. Learn more about what they offer below.
You can scroll left and right on the comparison table below to see more Ethical investment brokers that accept Ethical investment clients
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eToro
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IC Markets
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XTB
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AvaTrade
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FP Markets
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Pepperstone
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EasyMarkets
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XM
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Plus500
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FXPrimus
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SpreadEx
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Regulation | Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC) | Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), FCA number FRN 522157, Cyprus Securities and Exchange Commission (CySEC), CySEC Licence Number: 169/12, Comisión Nacional del Mercado de Valores, Komisja Nadzoru Finansowego, Belize International Financial Services Commission (IFSC) under license number IFSC/60/413/TS/19, Polish Securities and Exchange Commission (KPWiG) | Central Bank of Ireland, Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), South African Financial Sector Conduct Authority (FSCA), Financial Stability Board (FSB), Abu Dhabi Global Markets (ADGM), Financial Regulatory Services Authority (FRSA), British Virgin Islands Financial Services Commission (BVI) | Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217 | Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | Plus500UK Ltd authorized & regulated by the FCA (#509909), Plus500CY Ltd authorized & regulated by CySEC (#250/14), Plus500AU Pty Ltd (ACN 153301681), ASIC in Australia AFSL #417727, FMA in New Zealand, FSP #486026 and Authorised Financial Services Provider in South Africa FSP #47546 | Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID) | Financial Conduct Authority (FCA) |
Min Deposit | 200 | 200 | No minimum deposit | 250 | 100 | 200 | 100 | 5 | 100 | 100 | 1 |
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Used By | 20,000,000+ | 180,000+ | 250,000+ | 200,000+ | 10,000+ | 10,000+ | 142,500+ | 3,500,000+ | 15,500+ | 10,000+ | 10,000+ |
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Platforms | Web Trader, Tablet & Mobile apps | MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac | MT4, Mirror Trader, Web Trader, Tablet & Mobile apps | Web Trader, MT4, MT5, AvaTradeGo, AvaOptions, Mac, Mobile Apps, ZuluTrade, DupliTrade, MQL5 | MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, ZuluTrade, Web Trader, cTrader, Tablet & Mobile apps | MT4, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | MT4, Mac, Mirror Trader, Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps |
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Risk Warning | 67% of retail investor accounts lose money when trading CFDs with this provider. | Losses can exceed deposits | 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. | 72% of retail investor accounts lose money when trading CFDs with this provider | Losses can exceed deposits | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money | Your capital is at risk | Your capital is at risk | 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. | Losses can exceed deposits | Losses can exceed deposits |
Demo |
eToro Demo |
IC Markets Demo |
XTB Demo |
AvaTrade Demo |
FP Markets Demo |
Pepperstone Demo |
easyMarkets Demo |
XM Demo |
Plus500 Demo |
FXPrimus Demo |
SpreadEx Demo |
Excluded Countries | IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, ZW, ET, GH, TZ, LY, UG, ZM, BW, RW, TN, SO, NA, TG, SL, LR, GM, DJ, CI, PK, BN, TW, WS, NP, SG, VI, TM, TJ, UZ, LK, TT, HT, MM, BT, MH, MV, KZ, GD, FJ, BB, BM, BS, AG, AI, AW, LB, SV, US, PY, HN, GT, PR, NI, VG, AN, | AF, GN, SL, BW, IR, SY, MM, IQ, TG, KH, LS, YE, CI , LR, ZW, CU, LY, TZ, CG, ML, BO, LR, NE, AO, GM, NG, AG, GH, KR, KG, GN, SN, NA | US, IN, PK, BD, NG , ID, BE | BE, BR, KP, NZ, TR, US, CA, SG | US, JP, NZ | BR, KR, IR, IQ, SY, JP, US | US | US, CA, IL, KR, IR, MM, CU, SD, SY | MY, BE, US, CA, CN, ID, PH, TG, NG, DO, MA, ZW, PR, TZ, TN, UG, BW, AO, AE | AF, CI, CU, IQ, IR, LY, MM, KR, SD, PR, US, AU, SY, DZ, JP, EC. | US, TR |
You can compare Ethical Investment Brokers ratings, min deposits what the the broker offers, funding methods, platforms, spread types, customer support options, regulation and account types side by side.
We also have an indepth Top Ethical Investment Brokers for 2021 article further below. You can see it now by clicking here
We have listed top Ethical investment brokers below.