Global leaders at COP28 couldn’t commit to a complete “phase out” when it comes to fossil fuels, but there’s nothing stopping you from banishing them from your investments for good.
Fossil fuels – coal, oil and gas – are by far the biggest contributor to climate change, accounting for up to 90 per cent of all global greenhouse gas emissions.
If the world stands even a small chance of successfully turning the tide on climate change, it’s essential that we move to a net zero economy. One powerful way that you can help towards this goal is by moving your money to ‘fossil fuel-free’ investments.
Here we round up six trusted options:
1. Triodos Pioneer Impact Fund
Triodos says, “We have never – and will never – lend or invest in fossil fuel projects.” The Triodos Pioneer Impact Fund invests in a range of small and medium-sized stock market listed companies that are true innovators when it comes to meeting sustainability challenges.
The fund is managed by Triodos Investment Management, part of Triodos Bank, in line with the United Nations Sustainable Development Goals (UNSDGs). This means that every company it invests in contributes towards a brighter and more sustainable future.
The fund scores five out of five in Ethical Consumer’s Fossil Free Investment Funds Report. Triodos is a Good With Money ‘Good Egg’ company, which means it can prove it makes a positive impact on planet and people, as well as a certified B Corp.
Where to invest
You can invest in this fund through the Triodos platform, use a third party platform such as The Big Exchange, interactive investor, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
2. FP WHEB Sustainability Fund
WHEB does not include fossil fuel investments in any of its funds. Its flagship FP WHEB Sustainability Fund, for UK residents only, targets long-term growth by investing exclusively in companies providing solutions to sustainability challenges. It is multi-thematic and invests in global listed equities.
Trading platform Morningstar gives the fund a five-star sustainability rating. It also scores five out of five in Ethical Consumer’s Fossil Free Investment Funds Report.
Where to invest
You can invest in this fund directly through the WHEB platform, use a third party platform such as The Big Exchange, interactive investor, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
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3. Castlefield Sustainable European Fund
Castlefield screens out fossil fuels and other destructive industries from all its sustainable investments. There is also a positive bias towards investments which contribute towards key sustainability themes and those which conduct their operations with due care and attention to the environment and society.
The Castlefield Sustainable European Fund aims to generate long-term shareholder returns through a “concentrated portfolio of high conviction ideas from European countries, which demonstrate strong ESG (Environmental, Social and Governance) practises”. Top holdings include teleradiology company Medica,
Where to invest
You can invest in this fund via a third party platform such as The Big Exchange, interactive investor, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
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4. EdenTree Responsible & Sustainable Global Equity Fund
EdenTree’s responsible and sustainable funds do not invest in companies that are exposed to fossil fuel exploration and production. The EdenTree Responsible & Sustainable Global Equity Fund looks to deliver longer term capital growth and an income from a portfolio of global equities. It only invests in companies that are making a positive contribution to society and the environment through sustainable and socially responsible practices.
Where to invest
You can invest in this fund via a third party platform such as The Big Exchange, interactive investor, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
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5. Impax Environmental Markets Plc
Impax is dedicated to investing in the transition to a more sustainable economy and its strategy is fossil fuel-free. The Impax Environmental Markets Plc is an investment trust rather than a fund, which you can find out more about here. Its focus is on environmental businesses.
The trust aims allow investors to benefit from growth in the markets for cleaner basic services relating to energy, water and waste, and the more efficient delivery of them.
Where to invest
You can invest in this trust via a third party platform such as The Big Exchange, interactive investor, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
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6. PensionBee Fossil Fuel-Free Pension Plan
The Fossil Fuel Free Pension Plan, created and managed by Legal & General for ‘Good Egg’ firm PensionBee, is one of the UK’s first mainstream private pension plans to completely exclude companies with proven or probable reserves in oil, gas or coal.
Alongside avoiding fossil fuels, it invests more of your money in companies that are aligned with the Paris climate change agreement (ie. those that are better prepared for the transition to a low-carbon economy).
There’s no need to sacrifice returns by switching away from fossil fuels – in fact you could lead to greater growth. New analysis from PensionBee reveals that savers choosing fossil-fuel free pension plans were likely to have seen higher returns during 2023 than those in mainstream default plans.
Where to invest
You can invest in this plan via PensionBee.
Risk warning: When you invest, your capital is at risk. The value of your investments and the income from them can go down as well as up and is not guaranteed at any time.
