What Investment Reader's Question:

Can you define exactly what you mean by sustainable investing? I have heard some commentators say funds that I would consider to be green are infact unethical. 

Huw Jones, via email

Mark Hoskin, Holden Partners, says:

There are a lot of buzz words in this sector and they mean different things to different people. You hear people talking about sustainable investing, green investing, and ethical investing.

More recently ethical investing has come to incorporate all of these things, for example the chairwoman of UKSIF runs an ethical investment week in November but within this she would include all funds under the umbrella of sustainable investing, and these can run from very light touch with no ethical screens, by which I mean they don't exclude companies based on negative criteria such as first state asia sustainability through to funds like the Allianz RCM Global EcoTrends Fund which invests in green tech, all the way to one of the oldest funds in the market the F&C stewardship income, which probably excludes, based on armaments, animal testing, alcohol and human rights among other criteria, but doesn't necessarily have any particular environmental focus and probably excludes 40% to 50% of the market.

So if you consider investing in armaments companies as being unethical then there will be green funds who invest in technology used by the military. For example one of the biggest investor in renewables in the US is the US military.