Why is Ethical Investing Important?

Returns, returns and more returns. The goal of every investor, no matter his/her risk appetite is returns.

However, is this what investing has been truly about? The return (again) on your investment? Could it be possible that perhaps, you are more bothered about what your funds are invested in? That these are aligned with your personal values and ethics?

When you invest in a Company, you fuel their business practices with your money and while some people may not be particularly bothered as to where their money is being invested (not to worry, it’ll always be legal), others may invest with corporate social responsibility in mind or even, their ethical values.

For this second set, it is important that channels/platforms exist to ensure that such persons can support companies whose business practices align with their ethical values, and this is where the idea of ethical investing comes in.

Pension Fund Administrators are asset managers, focused on generating good returns for their customers to ensure that the latter retire comfortably. Until July 2021, no Pension Fund Administrator offered an ethical investment fund, meaning that Retirement Savings Account holders had no input into how their pension contributions were being invested.

The National Pension Commission in 2021 approved the launch of RSA Fund VI, adequately tagged the Non-Interest Fund and now, for the first time, Retirement Savings Account Holders in Nigeria can now switch their pension contributions to a fund where these monies will be invested in ethical businesses i.e. businesses whose main objects align with Islamic Finance principles and whose operations are generally ethical. To briefly elaborate, the investor cares about the core business activity of the company and how leveraged its operations are.

It goes beyond religion as well, in that across the globe, every day individuals are caring more for companies who adopt environmentally sustainable business practices and who do not exploit their staff. For instance, persons interested in a greener world might avoid companies whose carbon emissions are significantly high and focus on greener technology companies like solar power generating companies. The key thing here is placement of funds with a company that benefits the society.

Bringing it back to the Nigerian space, with the launch of RSA Fund VI, RSA holders now have the opportunity to switch to a fund aligned with their personal values. Even better news is that Sigma Pensions Limited is the first PFA to launch the fund and boasts of a team of experts who painstakingly screen the companies with which monies are invested in this fund to ensure that at all times, these placements are in line with Islamic Finance principles and are also sustainable.

To find out more about the new Non-Interest RSA Fund VI and how to make that switch, simply call our multilingual call centre on 09-461-3333, send an email to info@sigmapensions.com or click here for frequently asked questions .

Our tagline says it all, we really are #workingforyou

Remember to make that switch today.