ETHICAL
INVESTMENTS
MONEY TALKS October 2011
IT’S
SPECIAL POINTS OF INTEREST:
It’s time to start CoOperating”
Change through exchange.
Current IPS share & loan stock offers.
Update on Cochabamba.
Our Christmas tree gift idea.
Solar Panel’s won’t FIT your home?
Volume 5, Issue 2
TIME
TO
In recent months we have seen stock markets tumbling once more with more than a few analysts genuinely concerned that this time there may really be no way back. Greece is on the point of defaulting on its loans and economies throughout the world are being starved of the investment capital needed to stimulate growth. This summer we also witnessed some of the most disturbing images of social disorder as looting and arson raged in towns and cities across the country.
INSIDE ISSUE:
THIS
Equfund
2
Lightweight Com-
2
Last week I had the opportunity to meet my local MP, who also happens to be the deputy Prime Minister, Nick Clegg to advo-
START
CO-OPERATING!
cate the benefits of a “cooperative solution”. An Industrial and provident society which has been set up for the benefit of the community is obliged to use any profits for its stated aims, as laid down in its rules. Although interest can be awarded to shareholders in order to provide an incentive to attract and retain the capital the business needs to function, it cannot pay more than is necessary t o achieve this. Surplus profits cannot be used to award fat bonuses to top executives or pay out huge dividends to anonymous shareholders. Shares in an “IPS BenCom” cannot be listed on a stockmarket—in fact
they cannot be traded at all—only redeemed back to the society itself—so, although there is still a risk that the business can fail and the value of shares could fall, they are not prone to the violent fluctuations in value of conventional equities. Perhaps the greatest attribute is that the model is one that genuinely fosters a cooperative spirit. I hope the examples that follow will demonstrate these qualities
Nick Clegg — “keen to co-operate”.
munity Transport Portland Works
2
CHANGE The Cochabamba
3
Project Offer A Christmas Tree
3
gift idea Solar Panels won’t FIT your home?.
EXCHANGE
3
Project Update The Cochabamba
THROUGH
4
Ethical Currency aims to save its clients’ money by beating the exchange rates offered by the large financial institutions. This means that you, your business, charity or NGO save money and get a faster, more efficient service when it comes to
your finances. And here’s the groundbreaking bit... Ethical Currency ring fences 0.01% of each foreign exchange transaction to create a fund to fight poverty and HIV and AIDS in Africa.—this is Change through Exchange.
Ethical Currency operates in over 40 countries. Any business, NGO, social enterprise or individual can use our services. There is now a foreign exchange alternative to mainstream banks. For more information visit call Amir on 0207 199 3792
MONEY
Page 2
TALKS
EQUFUND
-
COMMUNITY
Equfund was one of the first industrial and provident societies supported by Ethical Investments and some of our originalclients have been reinvesting the maturing capital from their initial 5 year investments in subsequent loan offers for a few years now. Funds from the current issue will finance Community Self Build Affordable Housing, enabling local groups to work together to refurbish old properties
LIGHTWEIGHT Bringing rail to communities that need it shouldn't be rocket science. What if a company existed that could provide business planning, affordable rolling stock leasing, infrastructure and training in a simple, affordable finance package -and did so not for profit, but to benefit the community? That's the idea behind Lightweight Community Transport Ltd.
PORTLAND
HOUSING
or construct new homes in their neighbourhoods. Equfund will also be providing a dual financing arrangement, allowing the lender to take out a low rate mortgage with a High Street lender of up to 75% of the purchase price, together with an interest free, shared equity loan with the society for the remainder over a five year term.
LOAN
STOCK
contributing 500 hours of labour in building their home. If the buyer is unable to qualify for a mortgage, the society will allow the buyer to rent on affordable terms until they are able to qualify for a mortgage. Investors may opt receive up to 5% interest and capital will be repaid on 30th September 2016.
Equifund will also attribute 10% of the property’s value to a buyer in lieu of
COMMUNITY
TRANSPORT
By making a social investment in this community benefit society, you will help to introduce a commuter service between Medstead and Alton in Hampshire, also known as the Watercress Line. The society is hoping to raise up to £187,500 to purchase a refurbished lightweight railcar—a “Parry People Mover”. The society will then lease the railcar to GOCO Co-operative who will
operate the service in partnership with Mid Hants Railway. The service will make use of existing track to provide a peak time service linking local commuters to the mainline into London. The society is offering ordinary shares with a modest rate of interest until its loans are repaid in 2014, increasing to 9— 10% by 2015.
WORKS!
The Portland Works project is a group of tenants and supporters, all volunteers, who want to ensure the survival of one of Sheffield's great buildings by community purchase and social ownership. Portland Works, built in 1877, is one of the earliest surviving examples of an integrated metal trades complex. It is a Grade II* listed building,
which in 1913 became the first place in the world to manufacture stainless steel cutlery . Remarkably, it still does what it was built for offering low-cost workshop space to small manufacturing businesses and independent artists and craftspeople. You'll find here metalworkers, engineers and craftsmen, furniture mak-
ers, artists and musicians. They are a cross section of talent following in the footsteps of the 'Little Mesters' who made Sheffield famous The society wants to protect and develop this community of creative and traditional industries by buying the building and running it as a social enterprise.
Page 3
THE
VOLUME
COCHABAMBA
The society has revised its prospectus for Autumn 2011 following a number of recent developments. ArBolivia has now received certification under the Plan Vivo standard and has concluded its first carbon credit sales with the German consultancy, Forest Finance. Forest Finance is also helping the society to achieve the Carbon Fi x Standard, which is more widely known in Germany and has agreed to pur-
THE
OUR
A number of clients have said that whilst they are not able to invest in The Cochabamba Project, they would like to make a contribution to its work. Why not consider our Climate Action Plan as a way to spread Christmas cheer and solve those gift problems? Allowing for regular thin-
In Bolivia Sicirec has received two substantial grants to help improve on -line reporting facilities for investors and to develop its agro-forestry component. It is also developing its own revenue stream through plant sales and forest management services
The society’s first loan stock offer has so far attracted a commitment of £200,000 towards the refinancing of existing loans on better terms. It has also recently acquired the rights to a
PROJECT—
AUTUMN
For the 12m period from January 2012 it will require total funding of about £450,000. 175,000 $ of this amount has already been secured through the deal with Forest Finance and a number of similar deals are currently under negotiation. Despite this promise, the directors would prefer to seek further equity invest-
TREE
2
further 123 hectares in a refinancing deal with three private investors, which allows the society to spread payment over a 5 year term.
The society has also concluded its first significant contract for its Climate Action Plan with Red24 and is expecting to conclude a deal with Ecology Building Society shortly.
CHRISTMAS
ISSUE
UPDATE
chase a further volume once this is achieved.
COCHABAMBA
Since March 2009 the society has raised over £2m to support the ArBolivia project. It has attracted almost £1.5m in share capital from 290 members and has raised over £0.5m in long term finance, which will be repaid once the society’s carbon credits have been sold and its timber revenues come on stream, which is now anticipated in 2014.
PROJECT
5,
GIFT
ment, since any surplus capital can always be held in reserve or used to expand the project area. The new prospectus provides an update on the development of the project and new financial forecasts. There is an “Early Bird” incentive for investment before 31st October and the offer will run until 31st December.
IDEA
ning, it costs the society £5 to cover the cost of maintaining each tree over its average lifecycle. For just £30 you can buy 6 trees for a loved one, ensuring that at least one will reach full maturity. The society will provide a certificate identifying the name of the smallholder, the tree species and the
OFFER
exact GPS reference. We will also provide a username and password allowing the holder to view the forest parcel on Google Earth and to receive updates on the progress of the parcel and the project in general. For further details visit www.climateactionplan.co.uk
“Since March 2009 the society has raised over £2m to support the ArBolivia project”
ETHICAL INVESTMENTS 100 Whirlowdale Road Sheffield S7 2NJ Phone: 0114 2368 168 E-mail: dav@ethicalinvestments.co.uk
Ethical Investments was established in 1996 as an authorised firm of Independent Financial Advisers. In 2009 it withdrew from this market in order to concentrate on promoting investment opportunities that provided working capital for projects with clear social and environmental impacts. Its core product is the industrial and provident society for the benefit of the community. These co-operative societies must be registered with the Financial Services Authority but are exempt from the normal restrictions on financial promotions when offering withdrawable shares and/or loan stock to the public. For further details of all offers please contact us as shown to the left
We’re on the web! www.ethicalinvestments.co.uk
SOLAR
PANELS
Ethical Investments has been studying the new opportunities for installing solar panels on your property.
Ethical Investments can offer an alternative to installing your own panels
There are a number of barriers which prevent home-owners from investing in such a scheme — and of course not everyone owns their own home! Firstly, assuming you do own your own home, there has to be the right aspect or enough space to fit the panels, either on your roof or in an suitable alternative location. Secondly the capital outlay is considerable—at least £10,000 for a reasonable installation.
WON’T
“FIT”
YOUR
Thirdly, whilst the projected income seems suspiciously, almost incredibly high, you have to bear in mind that the panels will be a “wasting asset” - you are not going to get your capital back on top of the income. There is also the hassle of worrying about which installer to use and whether they can be trusted. Ethical Investments is currently looking at options to team up with commercial partners to create an industrial and provident society to help overcome these issues. Investors should benefit from economies of scale
HOME?
by being able to use combined funds to erect panels in optimum locations on larger sites than the average domestic roof. Annual returns may be lower but the society would plan to give investors their capital back in the future. Surplus profits could also be used to address insulation issues— the most cost effective way to reduce carbon emissions. There are also a number of opportunities to invest in authorised funds, which qualify for enterprise investment scheme or venture capital trust tax relief .Please contact us if this is of interest.