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Ethical Investing Guide

Ethical investing means putting your capital behind businesses you would be proud to own. EthicoIQ screens every asset against a clear, objective framework so you can invest with both conviction and confidence.

What Makes an Investment Ethical?

An ethical investment is one whose primary revenue, financing, and governance practices align with widely-accepted responsible-business standards. We screen for revenue purity, debt levels, receivables quality, governance, and business conduct.

Our Three Classifications

  • ✦ ETHICALLY SCREENED — passes all five criteria. Safe to consider.
  • ⚠ NEEDS REVIEW — mixed signals on one or more criteria. Verify independently.
  • ✗ NON-COMPLIANT — fails core criteria. Excluded from signal output.

How We Screen Each Asset

EthicoIQ screens every asset against five ethical criteria:

  1. Revenue Purity. Non-compliant income below 5%. Excluded: alcohol, tobacco, gambling, weapons, adult content, predatory lending.
  2. Debt Ratio. Interest-bearing debt below 33% of market capitalisation.
  3. Receivables Ratio. Trade receivables below 33% of market capitalisation.
  4. Governance. No major regulatory violations in the past 24 months.
  5. Business Conduct. Transparent reporting and a clean audit history.

How We Cross-Check Our Screen

Our ethics rules are objective and reproducible. Every classification on EthicoIQ is derived directly from a company's most recent financial disclosures and revenue-mix filings — debt ratios, trade receivables, revenue-purity thresholds. We refresh these on each quarterly results cycle.

For assets in the Needs Review bucket, the methodology page lists the specific criterion that triggered the flag so you can dig deeper before committing capital. Cross-checking against your own framework or your financial adviser is always recommended.

Understanding Income Adjustment

Some index-tracking ETFs may hold small proportions of non-compliant assets. Consider calculating and donating the proportional non-compliant income to charity annually. Consult your financial adviser for guidance.

Ethical ETFs and Funds Available

  • Tata Ethical Fund
  • Taurus Ethical Fund
  • Nippon Ethical Index ETF

Building an Ethical Portfolio

Start with the Ethically Screened filter on (default in EthicoIQ). Diversify across sectors. Limit single-name concentration below 15%. Rebalance quarterly. Reinvest dividends. And always keep a cash buffer for opportunities the engine flags.