How did you come to be in the job you're in?

It was a bit of serendipity really; I may have just been in the right place at the right time. I worked for the ANZ bank for 20 years. Banking changed a lot in the years I was there and in 2000 it had changed so much I thought I should try something else. I did a very short stint with APRA [Australian Prudential Regulation Authority] and that convinced me that I wasn't cut out for the public sector. Australian Ethical was looking for a general manager and they were looking for someone they could mould. It was a very small organisation then; they had about 11 staff and $84 million funds under management. The whole philosophy of the company really appealed to me. It was a company that walked the talk.

Whilst I'd had a lot of management experience and finance experience, I hadn't had experience as a CEO and I didn't have set ideas. I think we just came together. It's been seven years and a very interesting ride. In that time we've grown substantially. We now have $600 million funds under management, 45 full-time staff and we listed on the ASX [Australian Securities Exchange] just to make life more interesting. We've done our refurbishment on our sustainable building, which has been a long project.

What do retail investors like about your funds?

Managed funds are very popular because they give people a diversified portfolio and they're easy to manage. We also have a public offer super fund. We find that people who have no other money to invest, but are interested in ethical investing, can now move their super into it. They see it as their asset, their choice and they've got control. Our clients are interested in the positive screening we apply to renewable energy, recycling and education. People seem to be really interested in investing in things that make a difference.

What are your main areas of investment?

We have equities, both international and domestic, and we run a balanced trust with property and fixed interest. We're a bit unusual in that we offer direct loans. We make a lot of loans to schools in alternative education. We are overweight in things like healthcare, Cochlear, recycled metal and recycling machines. It's not only about the environment, it's also about social issues - do they have good worker participation, do they treat their workers well, are they doing things that are good for society.

Have you ever had to change your position on an asset due to ethical concerns?

We keep all the investments under review. Mergers and acquisitions are something that you've always got to keep a close eye on. The ethical researchers will review them every year, but if something happens they will let us know straight away. You certainly have divestments on ethical issues, and we certainly have them on finance issues, all fund managers have that. We've been in plantation timbers at different times because we see that as a good thing. But at times we've also had to get out of them because they might have been logging old growth forests and that's a problem.

When BHP bought Western Mining, a number of ethical funds that had BHP ended up with Western Mining so they wanted to keep BHP. We were never in BHP. We've found it very hard to be in mining because mining is a negative as far as we're concerned. We try to be very transparent and consistent with our framework.

Are financial planners interested in ethical investment?

There has been a core of planners who have been interested in ethical investment and we've had good support. I think that's growing. Financial planners are a pretty savvy sort of bunch and they know that the best long-term returns will come from supporting sustainable businesses and/or fund managers. Businesses are going to be increasingly required to meet social and environmental costs and if you're already in that space that's where the growth is going to be. Planners realise that and the majority want the best for their clients. Many more are now very interested in environmental and social governance issues and that feeds into ethical investment.

Has adviser interest risen due to demand from clients?

I think so. As one of my directors says, the drought's probably one of the best things that's happened in terms of the environment because it's made people really aware. Before that, people thought climate change was out there and it would never happen to them. But when you start getting water restrictions it really starts to impact. When you see scandals in the finance sector, such as Enron, Westpoint or HIH, people become aware of good governance. When tobacco companies get sued people become aware of the social cost of producing those goods. Even when you look at James Hardie, it is a well-run company that lost a lot of its value because it took a certain view of what it thought was the right thing to do but society had a very different view. People are really thinking about where their money goes. The only way that you get change in any sort of behaviour is through the financial markets and where the stresses are. Money talks.