Are you thinking of investing sustainably but don’t know how or where to do it? Well, the good news is that it’s not as difficult as you may have thought. As in so many areas of modern life, these days you need only hop online to find a platform through which you can easily open an account and get started today.
Through these platforms you can invest in funds or projects that pool investors’ money together to put into companies and organisations that are working to solve the world’s most pressing problems and build a more sustainable future.
For your complete guide to the best ethical and sustainable investment funds available to UK investors, see the latest Good Investment Review, produced in collaboration with 3d Investing
Which platform you choose will depend on a number of factors, including how much money you have to invest and what you want to invest in. Below we profile the top 13 investment platforms for sustainable investment.
The Big Exchange
Investments: Equities (shares in a company), bonds (types of loan agreements), or sometimes both
Annual fee: 0.25 per cent
The Big Exchange, co-founded by The Big Issue, is an online investment platform which only lists funds that are proven to be making a positive difference to the planet and its people.
You can choose to invest in the issues that matter to you most – whether that’s lowering carbon emissions, contributing to social housing or helping to protect wildlife.
There are 4o investment funds to choose from, all rated against the United Nations Sustainable Development Goals, or “Global Goals”, for the type and level of positive impact they’re making to people and planet. Each one is awarded a gold, silver or bronze medal, with gold having the highest ability to bring about positive change.
If you are new to investing, a ready-made bundle is an easy way to invest in multiple positive impact areas. The Big Exchange offers three bundles – ‘cautious’, ‘balanced’ or ‘adventurous’ – put together by independent experts based on how much risk the investments are likely to take over time. If you have some knowledge of investing or just want to invest in specific areas such as climate funds and fancy putting together an investment package yourself, you can also pick your own funds.
You can invest from £25 a month or a lump sum of £100.
Abundance
Investments: Direct loans to projects and businesses, secondary market
Annual fee: None
Good Egg company Abundance is a niche platform focusing on peer-to-peer lending for businesses and councils that are developing green infrastructure to help combat climate change.
Minimum investment varies, but starts at £5. The returns you can expect vary a fair bit too.
Typically, returns on crowdfunding sites like Abundance are higher than on traditional investment platforms but that comes with higher risk such as the infrastructure project or business struggling or failing.
The platform allows you to trade some of the loans (known as debentures) with other Abundance investors which is good for diversification. It also has a tax-efficient Innovative Finance ISA option, which you can find out more about here.
AJ Bell YouInvest
Investments: Investment funds, company shares, trusts, exchange traded funds (ETFs), bonds
Annual fee: 0.25 per cent (up to £250,000 invested, then at decreasing rates)
Although it is set up for the more confident investor, the AJ Bell YouInvest platform is easy to navigate and has some nice guides and articles. Importantly, it is one of the more competitively priced platforms too.
Within its large range of funds you’ll find a good selection of sustainable options. It recently added four new ethical investing funds – the BMO Responsible Sterling Corporate Bond, Liontrust Sustainable Future Global Growth, Liontrust Sustainable Future UK Growth, and Royal London Sustainable Leaders – to its ‘favourite fund’ list, which is hand-picked by experts as being most likely to bring you a steady profit.
However, as with many traditional investment platforms, it does not have any search function that will narrow your choices down to ‘sustainable options only’, so you’ll need to know the name of what you are looking for.
Barclays Smart Investor
Investments: Investment funds, company shares, trusts, ETFs, bonds
Annual fee: 0.2 per cent
While Barclays has poor green credentials overall because of its heavy investment in fossil fuels, its Smart Investor platform is worth noting for its sustainable offerings.
The bank has picked out Exchange Traded Funds (ETFs) for the platform which consider Environmental, Social and Governance (ESG) factors. You can take a closer look at its Impact Investing Funds here.
It’s annual fee of 0.2 per cent is for funds. A caveat to this low fee is other investment types like stocks and bonds incur an additional one per cent platform charge. It is likely to be most cost-effective for bigger investors with a pot of £50,000 or more.
It isn’t the easiest of sites to navigate and does feel like it is somewhat tacked on to all the rest of the bank’s offerings, but it does have a section dedicated to impact investing where you can read more about how to make sustainable investments.
BestInvest
Investments: Company shares, investment funds, trusts, ETFs
Annual fee: 0.4 per cent (up to £250,000 invested, then at decreasing rates)
BestInvest is a stalwart of the investing space and has its own team of financial advisers should you not fancy the DIY option. The annual price of the platform is a bit higher than other low cost options at 0.4 per cent, unless you have over £250,000 to invest at which point the cost comes down to 0.2 per cent.
BestInvest’s ‘Top Rated’ funds list includes 18 ESG funds and – for those seeking a managed solution – it offers a sustainable ready-made portfolio.
The platform does feel like it is geared towards a more seasoned investor, but it does have some useful guides on sustainable investing and how to choose ethical funds. It is also well worth checking out BestInvest’s long-standing guide to underperforming funds: Spot the Dog.
Charles Stanley Direct
Investments: Company shares, investment funds, trusts, ETFs, bonds
Annual fee: 0.35 per cent (up to £250,000 invested, then at decreasing rates)
Established in 1782, Charles Stanley is one of the oldest firms on the London Stock Exchange. While it’s another traditional investment platform, it happens to have a better-than-average selection of sustainable funds available on it. It is not as friendly a website for the beginner investor as some of the other platforms on this list, but displaying the top ten holdings for each fund in a colourful chart is a plus.
Like most platforms offering a wide range of investment options, Charles Stanley also offers model portfolios of pre-selected funds, known as the Foundation Portfolios, which will have a diverse basket of investments in them. The platform does not yet offer a solely sustainable option, however.
Ethex
Investments: Direct equity (eg shares in social enterprises), bonds, funds, secondary equity market
Annual fee: None
A Good With Money ‘Good Egg’ company, Ethex is an innovator in the platform space and is designed specifically for people wanting to do good with their money. It offers crowdfunding and peer-to-peer lending, which means you can invest directly in projects such as affordable housing.
Like Abundance, Ethex allows you to invest in peer-to-peer loans through a tax efficient Innovative Finance ISA, which you can open on the website as you invest. Ethex also offers some funds through its platform: sustainable funds only of course! Minimum investment amounts vary but can be as low as £1. Ethex investors can use a marketplace to trade eligible shares and bonds with others on the platform.
Find out more in the latest Good Guide to Impact Investing.
Fidelity Personal Investing
Investments: Company shares, investment funds, trusts, ETFs
Annual fee: 0.35 per cent (up to £250,000 invested then at decreasing rates)
A global investment giant, Fidelity has around 2.4 million clients across the UK, Europe and Asia Pacific. There’s lots of content to pore over on the website but our favourite feature is the ability to search funds by the ‘socially responsible’ tag which gives over 200 results.
There is also a list of the top 10 transacted environmental, social and governance (ESG) funds. Even if you ultimately decide to use another platform to invest through, these handy features makes Fidelity a good stop for browsing and researching what’s out there.
Hargreaves Lansdown
Investments: Company shares, investment funds, trusts, ETFs, bonds
Annual fee: 0.45 per cent
HL, as it likes to be known, is a well-known, trusted brand and the biggest DIY platform in the UK for personal investors. It is also one of the most expensive with an annual fee of 0.45 per cent, so be wary of how this might chip away at your returns. You can start with just £100 or £25 per month.
HL is making strides to make sustainable investment a bigger part of its offering, relaunching its Wealth Shortlist in June 2020 to include responsible funds for the first time. The list is made up of funds chosen by experts as having the greatest potential to financially outperform their peers over the long term.
There are currently three funds in the ‘Responsible Funds’ category, which are Kames Ethical Equity, BNY Mellon Sustainable Real Return and Legal & General Future World ESG Developed Index.
While this is still a small percentage of the 68-strong list, it’s a promising move in the right direction. HL has also produced its own guide to ESG investing.
Interactive Investor
Investments: Company shares, investment funds, trusts, ETFs, bonds
Annual fee:£119.88 (£9.99 fixed monthly charge – or £13.99 for Funds Fan plan, or £19.99 for Super Investor plan)
Interactive Investor stands out for its flat fees. However, this means the charges only start to make sense if you have a larger portfolio of £40,000 or more (amounts lower than this should use percentage-based providers and the cheaper the better).
The site is clear and simple and boasts the “ACE 40”, which it says is the UK’s first rated list of ethical investments. ACE stands for “Avoids Considers Embraces”. The list of ‘best in class’ funds is separated according to asset class and investment category.
Wealthify
Investments: Wealthify Ethical Plan
Annual fee: 0.6 per cent
Simply EQ
Investments: Equities, bonds, property, commodities, alternatives and cash
Annual fee: 1.2 per cent for investments under £50,000 to 0.5 per cent for £1 million and over
Clim8 Invest
Investments: Stocks in a targeted portfolio of publicly listed companies
Annual fee: 0.6 per cent for investments up to £100,000
tickr
Investments: ETFs
Annual fee: £1 per month for all balances up to £3,000 and £1 per month + 0.3 per cent on the portion above £3,000
Launched in 2019, tickr is a mobile-only app that allows you to invest in companies that are aiming to solve social and environmental issues around the world. It aims to make investing easy and accessible to everyone (including those with zero experience of investing).
You can put your cash into companies from three separate themes – climate change, equality and disruptive technology – or a combination of all three, at a risk level you feel comfortable with. Minimum investment is £5.
It’s worth nothing that tickr invests your money in Exchange Traded Funds or ETFs. These are “passive” investments, meaning the money goes into a basket of companies and the asset manager simply keeps watch. While this is a cheaper style of investing, it may not be as positively impactful as an active approach. For more information on tickr, see our full review.
