If you want to be ethical, deep green is the only hue by Finance News Bulletin

Published: 02/01/08

All times are London time look for News in the FTcom siteSearchSearch Quotes in the FTcom siteQuotes Your moneyBreadcrumb trail direction-finding:FT house > Your moneyServicesMost people would say investing in agriculture and timber is, by definition, ethical Surely, they would quarrel, products and companies that help to nourish the world, and build shelter have to be a high-quality thing

There’s a rash of novel, and not so novel, agricultural and soft commodity money on the market, vying for retail investment, to harness the upswing in soft product prices such as corn, wheat and soyaThese are on a bit of a roll Corn went from $257 a bushel in 2005, to around $3

83 now, having reached $430 earlier this yearMany believe there’s more to come James du Boulay, skull of sales and marketing at Eclectica Asset Management, says there are also cipher of the beginning of a commodities supercycle, and over the next five to 10 years investors could make a enormous amount of money

Agricultural prices have been propelled upwards by a exhilarating cocktail of factors The global population is growing rapidly Consumers in the rapidly-developing parts of Asia want more protein-rich diets – it takes seven kilos of granule to produce a kilo of beef and five kilos for animal protein Add to all this the explosive demand for biofuels, and there is a strong quarrel for the sector

But green investors should look carefully to make sure underlying investments meet their own personal ethical criteriaSome funds, such as Schroder option Solutions Agriculture and structured products from Dawnay Day Quantum and Close Investments, increase exposure to agriculture mostly through commodities futuresEclectica Agriculture invests in agriculture-related stocks DWS is launching a finance in the UK which will be similar

And a solid called Braemar is bringing out a finance to buy farms near planned UK biofermentation plants (two of these are in the pipeline, but are not yet built)Sarasin is also setting up a finance Barclays Global Investors has launched the iShares S&P Global wood & Forestry, an exchange traded fund (ETF), which buys an directory of timber, forest manufactured goods, paper and packaging companies Forestry Investment Management runs tax-efficient UK funds (FIM) and Quadris ecological Investments cultivates sustainable teak in Brazil

In addition, a slew of asset houses, including Schroders and F&C, have climate alter funds that spend partly in agriculture-related companies The firms look for companies with products or services that help become accustomed to or mitigate the effects of climate change However, of the above, only Quadris has ethical asset objectivesAgricultural funds still meet some people’s moral criteria because crops are used to produce biofuels

Biofuels, however, are a controversial area The source of renewable energy has been seen as a more environmentally-friendly alternative But new studies have shown the compensation over fossil fuels, in terms of price and the environment, are, in many cases, not clear cutSimon Webber, co-manager of Schroder type of weather Change, says that whereas in Brazil sugar cane-based bioethanol has been shown to be helpful, the European biofuel production process does not save much energy

not as good as still is palm oil-based biofuel, which has led to the deforestation of ground in Malaysia and Indonesia There is been a great contract of illegal logging, especially in Indonesia, to make method for palm oil plantations The process of deforestation increases the height of carbon dioxide in the atmosphere, adding to the conservatory effect Some biofuel manufacturing processes make them worse for the earth than fossil fuels

Webber prefers companies making biogas, which uses pig and agricultural waste Biogas manufacture employs the whole hard skin plant and not just the kernel, so giving off twice as much energy And there is less competition with the hungry for foodSo ethical asset in the realm of farming is a complex matter and investors stick to different sets of principles

Orthodox, “dark green” investors are wary of agricultural funds Mike Head, a advisor at IFA Ethical Investment Group, says issues such as concentrated farming, genetic modification, the unsuitable use of pesticides, animal welfare, and concerns over the flora and fauna on the land, make the concept of an ethical agricultural investment an incredibly hard thing to undertakeThe best advice for the standard green investor would seem to be that if you do want to engage in the market, you’ll require to have pretty broad ethical criteriaCopyright The Financial era Limited 2007BlogsBrussels BlogCharles PretzlikClive CrookDear LucyEconomists’ ForumEnergy FilterJohn GapperGideon RachmanTech BlogThe in secret EconomistWestminster BlogWillem Buiter’s MavereconRegional pagesLatin American agendaChinaIndiaBrusselsInteractivePodcastsDebates & pollsAsk the expertMarkets Q&AJobs and classifiedsBusiness for saleContracts & tendersJobs Search Type your search criteria below:* smallest amount delay 15 minutesAll era are London timeFT HomeSite mapContact usHelpAdvertise with the FTMedia centreStudent offersFT ConferencesFT investigate CentreFT SyndicationCorporate subscriptionsFT GroupPartner sites: Chinese FT

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