It is central to the success of Ethex that the businesses it features are of a suitable quality that investors are not taking unacceptable risks. We therefore assess every business on Ethex in detail before allowing it to join.
We only feature positive investments
Much ethical investment is about the avoidance of harm. Ethex only features businesses that set out to do good. We call this positive investment (Read more).
A clear social mission is essential
Ethex only features businesses that have a clear social mission at their heart. This might be to tackle poverty or improve the environment. This social mission needs to sit alongside generating a financial return. Past social, financial and environmental performance is reported in detail on the Ethex site.
High standards of governance and performance are expected
Businesses joining Ethex should have a well-established and appropriately structured board of directors that includes non-executives and a suitably experienced and committed management team.
Well-established businesses are preferred
We prefer businesses that are well-established with a trading history, and where this is not the case we will highlight it clearly. Ideally, we would expect a business to have a turnover above half a million and to have been established for three years or more with at least two sets of published accounts. We have a strong preference for businesses that already have some external investors.
We prefer the business to have an advisor
Increasingly, Ethex is working with a number of social finance professionals who advise the businesses whose share offers we feature. Ensuring that each business is independently advised helps to ensure that we can be independent in the assessment of the business.
All investment products must be legally approved
All investment products offered by a business on Ethex must be legally approved as required by the Finanical Conduct Auhtority. Where a business such as a co-operative is exempt from approval, we would still expect a lawyer or suitably qualified professional to have reviewed the document.
We expect high levels of transparency and reporting
Businesses need to be able to report on the social and environmental benefits they bring, and to have an acceptable policy on paying a return to investors. Where they do not have an established procedure for reporting social, financial and environmental performance, Ethex will work with them to develop one.
Unethical businesses cannot join
We will not permit a business to join that causes damage to the environment through its activities or whose main business activity contributes significantly to climate change; is engaged in any way in arms sales, pornography, tobacco or animal testing for non-medical products; or that has a poor human rights or employment rights record.
A business may not be able to join Ethex if it is paid by an unethical business for services or knowingly receives grant funding from an unethical business; or if it is providing a service that a public institution would otherwise have a statutory obligation to provide.
How we apply the criteria
These criteria will be broadly applied. However, we may still accept businesses that don’t meet them if the business has a particularly strong business model. The final say lies with the Ethex board of directors and is based upon providing suitable breadth and quality for Ethex investors.
The Ethex team are here to help from 9am to 5pm
01865 403 304