If you want your money to make a real difference, for both your future and the planet’s, sustainable investing is a powerful way to do it.
It’s not simply about avoiding harm; it’s about backing businesses that are actively creating positive change while aiming for strong financial returns. At Liontrust, our Sustainable Future funds have been investing in companies tackling major environmental and social challenges for more than 20 years.
Here are six interconnected reasons why sustainable investing is a meaningful way to drive change, and why it could be a great place to start if you’re new to investing.
1. Protecting the planet for future generations
The environmental pressures we’re facing are more serious than ever. According to scientists at the Stockholm Resilience Centre, we’ve already
crossed six out of nine critical boundaries that keep Earth stable. These include those related to climate, biodiversity and pollution. But there is room for optimism.
The recovery of the ozone layer, following the global ban on CFCs, shows what can happen when science, policy and business work together. Sustainable investment finds and invests early in companies that are part of the solution. For example, Trane Technologies and TopBuild improve energy efficiency in buildings. Trex uses recycled plastic and wood to make long-lasting decking. Waters Corporation and Oxford Instruments detect and monitor pollutants like microplastics and PFAS in water systems.
By backing these businesses, investors can support environmental restoration and help build a more resilient, resource-efficient future.
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2. Improving health and quality of life
As the world’s population ages, healthcare systems are under growing pressure. At the same time, lifestyle-related health problems are becoming more common. Sustainable investors look for companies improving how we prevent, treat and manage health issues. Some firms, like Roche and Agilent, are focused on early diagnosis, helping detect diseases before they become more serious. Others, such as West Pharma, are developing advanced drug delivery systems to make new treatments more effective.
Then there are those working to improve quality of life through technology. Intuitive Surgical, for example, is a leader in robotic-assisted surgery, while The Gym Group makes exercise more affordable and accessible. Telemedicine companies and digital tools are also playing a growing role in helping people manage their health from home.
Sustainable investors can also push the healthcare sector to do better. Liontrust has long supported efforts to make medicine more accessible in lower-income countries, which has helped improve public health and open up new markets for pharmaceutical firms.
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3. Raising standards in global supply chains
The global supply chains behind many of the products we use every day can come with serious ethical and environmental risks. Poor labour practices,
pollution and supply disruptions are just some of the issues that need addressing. Sustainable investors can influence companies to act more responsibly. For example, Liontrust raised concerns about cotton sourced from Xinjiang with Puma, leading the company to introduce independent testing to help eliminate links to forced labour.
Other examples include encouraging DFS to improve its sourcing of wood and leather and working with Trex to verify that the wood fibre in its products
came from certified, sustainable sources. When investors, non-profits and consumers demand better standards, companies are more likely to act. And those that do often prove more resilient and successful over the long term.
Read more here.
4. Building resilience to climate shocks
As the effects of climate change become more extreme, the need to protect communities and infrastructure has never been more urgent. Floods, droughts
and wildfires are becoming more frequent and damaging. Investment in resilience can help. Companies like Advanced Drainage Systems and Genuit PLC are improving how cities manage stormwater, using recycled materials to reduce flood risks.
Water utilities such as Severn Trent are modernising their systems, using sustainable bonds to fund upgrades that benefit the public without paying shareholder dividends. Technology also plays a part. Firms like Veralto develop tools that detect invisible pollutants like nitrates and PFAS, which helps prevent long-term environmental harm.
Meanwhile, housing providers such as Clarion Housing Group are improving indoor air quality and energy efficiency in homes, particularly in areas vulnerable to extreme weather. This kind of investment supports both public safety and environmental health.
Read more here.
5. Promoting good corporate governance
While it may not grab headlines, good corporate governance is one of the most important factors in long-term business success. It ensures companies are well run, manage risks effectively, and treat all stakeholders fairly.
Sustainable investors evaluate how companies are governed, including their approach to executive pay, board diversity and transparency. For example, Liontrust’s research has shown that companies with high governance scores significantly outperformed their peers over the past decade.
As shareholders, sustainable investors also vote on important issues. In 2024, Liontrust voted against management or abstained in nearly 70 per cent of
cases, often challenging practices that don’t align with responsible business leadership. Better governance leads to more resilient companies, and better outcomes for both investors and society.
Read more here.
6. Tackling digital threats
Cybersecurity is now a major risk for businesses and individuals. From stolen data to ransomware attacks, digital threats are becoming more common and more costly. Sustainable investors focus on both prevention and accountability. Companies like Palo Alto Networks and Visa offer advanced cybersecurity tools that protect billions of transactions each year. UK-based Softcat helps small businesses secure their systems without needing large in-house tech teams.
Investors can also push companies to strengthen their internal defences. This means encouraging strong policies, employee training, board-level oversight and clear communication about breaches. Liontrust has supported global efforts, such as those led by the Principles for Responsible Investment (PRI), to improve transparency in how companies handle cyber incidents. It’s about building trust and security in a world that’s increasingly online.
Read more here.
