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 11 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.
COP28: Make your money count with a Good Egg
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.
Top 7 ethical current accounts
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.
Top 10 ethical financial advisers
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.
9 ways to make your money fight climate change
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.
7. Artemis Positive Future Fund
The Artemis Positive Future Fund aims to grow investor’s capital over a five-year period by investing in the shares of companies around the world. The fund is actively managed and concentrated, typically holding 35-45 companies. As well as excluding fossil fuels, this fund will not invest in nuclear power, weapons, and animal testing on cosmetics.
The fund managers look to invest in innovative companies whose products and services are driving positive environmental and/or social change.
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.
8. Janus Henderson Future Technologies
The Janus Henderson Future Technologies fund focuses on companies providing a technology solutions that have a positive impact on the environment and society, therefore helping to build a sustainable global economy. Companies in the fund must get at least 50 per cent of their current or future expected revenues from sustainable technology.
Where to invest
You can invest in this fund via a third party platform such as The Big Exchange, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
9. Pictet Nutrition
The Pictet Nutrition fund from Pictet Asset Management aims to increase the value of your investments alongside having a positive environmental and social impact. The fund invests in equities (shares) in companies in the nutrition related sectors, especially those improving the quality of food production and access to a sustainable food chain. The fund invests in companies across the world, which includes emerging markets and mainland China.
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.
10. Quilter Investors Ethical Equity Fund
This fund from Quilter “aims to achieve income and capital growth through investment in companies that demonstrate sound ethical practice and to outperform the MSCI World Index, net of charges, over rolling five-year periods”.
It has a five-star rating from data analysts Morningstar.
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.
11. Schroder Global Energy Transition
This fund from Schroder invests in companies around the world that are involved in the transition towards a lower carbon world. It seeks to invest in a concentrated portfolio of 30-60 companies, providing exposure to low carbon energy production, distribution, storage, and transport as well as suppliers of associated materials, components, and technologies.
Companies that generate any revenue from fossil fuels, nuclear power, weapons, tobacco, or alcohol are excluded. Holdings must also meet the manager’s ESG (Environmental, Social and Governance) criteria.
The fund aims to only invest in companies directly involved in and actively contributing to the transition to a more sustainable energy system, namely companies that generate at least 50 per cent of their revenue from activities contributing to the transition, or those which play critical roles or are increasing their exposure to such activities.
This may include some that the manager engages with to challenge areas of weakness in ESG performance and is confident that they will improve their practices within a reasonable timeframe.
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.
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.
