What is it, who does it and should you consider it? Liz Dolan investigates

When you're taking out a mortgage, buying an insurance policy or investing in a unit trust, do you simply look for the best deal or do you also ask questions about what the company does with your money?

Are you, in other words, an ethical investor, or are you only really interested in making your limited funds stretch as far as possible?

According to a recent survey by research group NOP, more than four in five of us want to know how the bank invests our money, and more than 60 per cent reckon we would find it very difficult to get a straight answer to the question.

Triodos Bank, which commissioned the survey and describes itself as one of Europe's leading ethical banks, says: 'It's alarming that we're the only bank in the country to publish details of every loan we make, so our customers know exactly how we're using their money. Customers have the power to change this situation and make a positive difference to the world around them, simply through the way they save and spend their money.'

Does ethical investment cost you?
Caring about where your money goes can be expensive. The cheapest home loans and the best savings rates are all too often offered by banks that also lend money to some pretty dodgy people and organisations.

You may like the idea of investing only in companies that do good in the world, or at least do no harm to society or the environment, but some of the best performing companies on the stock market operate in some distinctly questionable areas.

Ethical investment is also very complicated. You may react with horror to the idea of your money going into businesses that test drugs on animals or are involved in factory farming, while others reckon these are necessary evils.

They, on the other hand, may disapprove strongly of gambling or alcohol, while you couldn't care less. This makes it very difficult for the managers of ethical investment funds to decide which companies to invest in.

Some solve the problem by avoiding only the most obviously unacceptable areas, such as arms manufacturers or companies with a bad record on pollution. Others exclude all but the most universally acceptable businesses and concentrate heavily on those that do good in the world.

Read on to find the best ethical bank accounts, investments, mortgages and pensions…

Savings and bank accounts
Triodos Bank (call 0845 458 9526 or visit www.triodos.co.uk) lends savers' money to good causes at affordable rates and supports charities, community business and campaign groups. It publishes a project list so that customers can see exactly where their money goes. Savers can opt to sign over a proportion of the interest they receive to a favoured charity, or to charities in general.

You can also buy shares in the bank's Ethical Property Company, which rents properties on reasonable terms to charities such as Oxfam.

The Co-op Bank - recently promoting its ethical standpoint on TV ads - says it operates socially responsible banking policies. It runs savings accounts for people who don't want their money lent to organisations that they find unacceptable. The bank's online offshoot, Smile, pays particularly good rates on savings.

Investment
The Ethical Investment Research Service (call 020 7840 5700 or visit www.eiris.org), better known as Eiris, provides bags of information about ethical funds, including performance tables. Both Eiris and the UK Social Investment Forum (call 020 7749 or visit www.uksif.org) publish lists of independent financial advisers who actively discuss socially responsible investment (SRI) tactics with clients.In 2001, Eiris teamed up with the people who run the FTSE stock market indices to create a package of FTSE4Good indices: UK, US, Europe and Global.

Ethical and Environmental Screening Services (call 01242 539850) will devise bespoke investment portfolios for individuals and investment managers that will take account of both negative and positive ethical investment options. The £500 annual membership fee includes half-yearly updates based on both anecdotal and published information.

Fidelity's Fundsnetwork site (www.fundsnetwork.co.uk) also carries information about ethical funds.

Pensions