Ethical and Environmental Funds: "Heroes and Villains"

BP Disaster Avoided by Ethical and Environmental Funds

LONDON, August 2, 2010 - Barchester Green Investment Limited (Barchester), the UK's leading
ethical and environmental financial adviser, released today their list of the
current 'Heroes and Villains' amongst the ethical and environmental funds.

Jonathon Clark, Director of Barchester Green, explained, "Twenty years
ago, Barchester used to publish a list for our clients of 'First, Second and
Third Division' ethical and environmental funds. Now, owing to environmental
disasters, and an increasing awareness of environmental and CSR issues, our
clients are asking for these listings again. Today's investors with
non-financial criteria differ significantly from those in the '90s in that
the major issues then were political and social e.g. apartheid and armaments,
whereas now the emphasis is more on seeking positive and sustainable
solutions to environmental problems."

Clark continued, "Our classification of companies is not dependent on
financial performance but on how much effort is put into seeking out truly
ethical funds for investment and how willing the fund manager is to discuss
the investment strategy. A fund with its own research team will score higher
than one dependent on EIRIS (Ethical Research and Information Service -
www.eiris.org) research and more highly still compared to funds which
rely on others' research and literature, or whose major holdings appear to
differ little from mainstream funds."

So who are our 'Heroes and Villains', and why?

    'Heroes':

    1. Jupiter Ecology
    2. The IM WHEB Sustainability Fund
    3. BlackRock New Energy Technology
    4. Aegon Ethical Equity Fund
    5. Impax Environmental Leaders

    And 'Villains':

    1. Zurich Environmental Opportunities Pension Fund
    2. Jupiter Environmental Opportunities - OEIC
    3. Marks & Spencer Ethical - OEIC and ISA
    4. Scottish Widows Environmental Investor
    5. Prudential Ethical

The fund which comes top of the list, Jupiter Ecology, is a longstanding
environmental fund - launched in 1988 - and has had the same fund manager,
Charlie Thomas, since 2003. Investment is spread between the UK, Europe,
North America and the Far East. Nothing is invested in the financial sector
(although at the time of writing 10% is in Money Markets, pending investment)
- it actually is a fund which invests in what it says. It is also one of the
very few environmental funds which also applies ethical as well as
environmental criteria to its stock selection.

Of the other funds topping the list, the IM WHEB Sustainability Fund not
only invests in companies offering alternative energy solutions, but also in
companies which are concerned with the provision of clean drinking water,
through purification and conservation technologies, and those providing
healthcare for a globally aging population.

BlackRock New Energy Technology specialises in solar, wind and wave
power. Aegon Ethical Equity Fund's strength lies in adhering to strict
ethical criteria in choosing its investment portfolio and, significantly,
excludes banks (which 'bucks' the current trend).

Finally, Impax Environmental Leaders focuses on three key environmental
sub-sectors: alternative energy, water treatment, pollution control/waste
technologies.

Clark says: "Despite not having a single fund in the top five, Aviva
deserves an extremely honourable mention. They have, in a sense, been victims
of their own success as far as our ranking is concerned. In creating a range
of five "Sustainable Future" funds in 2001 (which they added to their
pre-existing Ethical fund) which have both ethical and environmental screens,
they have made a very valuable contribution to the sector - in a table of
total overall offerings rather than single funds they would be our number 1."

Barchester's new ranking of environmental funds clearly shows that what
the worst offenders have in common is top holdings which have little or
nothing to do with ethical and environmental investment; in fact, in many
cases, they contain stocks which ethical investors would certainly wish to
avoid.

The fund at the bottom of the list, Zurich Environmental Opportunities
Pension Fund, has a 7.6% holding in Shell, a 5.9% holding in BP and a 4.3%
holding in Rio Tinto, all of which would put this fund high on an
environmental investor's blacklist. BP may be developing alternative energy
sources but this is a miniscule part of their business compared, for example,
with the pollution caused by the Deepwater oil spill. Given that most ethical
investors want to avoid companies with serious health and safety issues it is
difficult to see how these companies can possibly be included in a fund with
this name. The remaining companies in Zurich's investment portfolio seem to
embody little (if anything) in terms of offering environmental opportunities
- HSBC, Vodafone (beloved by almost every fund manager, ethical and
non-ethical), AstraZeneca, Standard Chartered, GlaxoSmithKline and Tesco.
They may or may not be ethical but they certainly are not environmental.

Following closely behind Zurich Environmental Opportunities, of the
remaining 'Villains', Jupiter Environmental Opportunities (OEIC), whilst not
holding funds in oil and mining companies, has a huge 10% of its funds
invested in HSBC, Lloyds and Barclays.

M&S Ethical (OEIC and ISA) - very disappointingly as it is a brand
normally associated with a generally positive record in corporate social
responsibility (CSR) - turns out to have 4.6% invested in Shell, 4.3%
invested in BP and other funds invested in GlaxoSmithKline, AstraZeneca, HSBC
and Standard Chartered. This fund doesn't claim to be
environmentally-friendly, but this really doesn't even meet investors'
expectations of ethical investing.

Scottish Widows and Prudential both have more than one third of their
funds in financials. Also, the restrictive attitude of Prudential, as a
company, towards those wishing to transfer their holdings away from the
Teachers Superannuation scheme is curiously out of sync with the open
contracts towards which most companies have moved over the last ten years.

Photographs of Jonathon Clark are available on request

Notes to Editors:

Barchester Green Investment Ltd is the UK's longest established
Independent Financial Adviser (IFA) specialising in socially responsible,
environmental and ethical investment (
barchestergreen.co.uk/services/ethical-investment-and-sri).
Established in 1985, Barchester Green has been advising both individuals and
companies, with 3,500 clients and GBP90 million under management. Barchester
Green provides a complete range of advice, from individual and company
pension management to mortgages, life assurance and wealth management.
Restructured in 2008 to become a partnership, it is wholly owned by the
advisers and the administrators, with a limit of 15% on the shareholdings for
any one partner to ensure a democratic structure. The company is committed to
donating a fixed percentage of its annual profits to charity and social
enterprise businesses. It is a founder member of the Ethical Investment
Association (EIA), an association for financial advisors in the ethical
arena, and of UKSIF, the sustainable energy and finance association. For more
information on Barchester Green please visit barchestergreen.co.uk/

    Editorial contact
    Alla Lapidus
    Moonlight Media Ltd.
    Tel: +44(0)20-7250-4770
    Email: alla@moonlightmedia.co.uk

Editorial contact: Alla Lapidus, Moonlight Media Ltd., Tel: +44(0)20-7250-4770, Email: alla at moonlightmedia.co.uk