One of the easiest ways to invest in funds making a positive difference to the world is through a stocks and shares ISA. Think of this as a basket that holds your chosen investments.
Through your ISA, you can invest up to £20,000 per year, tax-free. You can either choose your own funds to invest in or, if you’re not confident or lack experience, go for a ready- made portfolio (this is a collection of funds chosen by experts).
With so many providers and platforms claiming to offer sustainable investments, it can help to look for one that specialises in this area.
Ones we like include:
EQ Investors, with its Positive Impact, Climate Action and Future Leaders Portfolios. EQ Investors has a ‘Good Egg’ mark from Good With Money, which means it can prove it makes a positive difference to people and the planet as well as to its customers.
Triodos Bank – another Good Egg firm – with its Pioneer Impact Fund, Global Equities Impact Fund, Sterling Bond Impact Fund and Future Generations Fund. You can invest in these funds directly through the Triodos website or use a third party platform such as The Big Exchange, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser. The Future Generations Fund is currently exclusive to the Triodos website.
WHEB Asset Management – The 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. You can invest in this fund directly through the WHEB website, use a third party platform such as The Big Exchange, AJ Bell or Hargreaves Lansdown, or ask your Independent Financial Adviser.
The Big Exchange, a platform which only offers funds that make a positive impact on the environment and/or society.
Alternatively, you can choose a platform that allows you to filter your search by sustainable funds. Good options include AJ Bell, Hargreaves Lansdown and Interactive Investor.
If you are keen to invest directly in projects that interest you – as part of a diversified investment plan (i.e. don’t put all your eggs in one basket!) – you could look at the Innovative Finance ISA (IFSA) – see our Good Guide to the Innovative Finance ISA here. Good choices for this include:
Ethex, a not-for-profit platform, offers investment crowdfunding to directly fund extraordinary projects in the UK that are tackling social and environmental issues. Many of the investments on Ethex can be held within an IFISA.
Its sister firm Energise Africa enables ordinary people to invest in bonds issued by impactful companies in emerging economies that are taking action to achieve the United Nations’ Sustainable Development Goals (SDGs). Examples include solar energy access, green logistics and sustainable transport initiatives. Find out more in Ethex and Energise Africa’s article on why direct investing equals transparent impact.
For other ways to green your money with trusted providers, see our top ethical current accounts, savings accounts, financial advisers and pension funds.
This article is from the Good Guide to Avoiding Greenwashing – free to download here.
Risk warning: when you invest, your capital is at risk.
