Why do ethical and sustainable funds still only make up less than 2% of the market?

Investors have stayed away from ethical funds as they supposedly have to give up returns in order to be ‘socially conscious'. Hardeep Tawakley reports

Ethical and sustainable funds still only account for 1.2% of the total UK funds market, despite net retail sales of ethical funds in the UK reaching £460m in 2014, more than double the 2013 figure of £206m, according to the Investment Association (IA). Investors have tended to shy away from using ethical investment funds as they supposedly have to give up returns in order to be ‘socially conscious'. However, this is a statement that has often proved untrue (see feature, opposite). Good Money Week is just one event that aims to raise awareness of the positive aspects of sustainable, respo...