Investors in SDCL Efficiency Income Trust (SEIT) are facing potential losses of up to 50 per cent after the £1.1 billion fund announced plans to wind down.
The FTSE 250-listed trust, which invested in energy efficiency projects such as solar panels on supermarket roofs and EV charging infrastructure, has struggled in a higher interest rate environment. Its shares are now trading at a steep discount to the value of its underlying assets.
The decision follows pressure from activist investor Saba Capital and growing shareholder demand for liquidity.
For many retail investors, it’s a reminder that even investments positioned as “green” or “impactful” can carry significant risk – particularly when wrapped in complex listed structures like investment trusts.
So if you’re looking for ways to invest in sustainability without taking on the same risks, where else could you look?
1. Diversified sustainable funds
Rather than backing a single theme like energy efficiency, diversified sustainable funds spread risk across sectors and regions.
Providers such as Liontrust and Impax Asset Management offer funds focused on companies contributing to environmental and social outcomes, but within a broader, liquid portfolio.
Why it matters:
You’re less exposed to one strategy, one manager, or one part of the market.
2. Listed renewable infrastructure trusts (with caution)
Other listed trusts investing in renewable energy or infrastructure remain popular with income-focused investors.
Examples include Greencoat UK Wind and Foresight Solar Fund.
However, SEIT’s struggles highlight a wider issue, which is that many trusts in this space are now trading at discounts, as higher interest rates have reduced the appeal of their income streams.
Why it matters:
These can still play a role, but they’re not low-risk, and discounts can persist.
3. IFISAs and direct impact investing
Platforms like Ethex and Energise Africa allow investors to fund specific projects – from renewable energy to social housing – often from as little as £50.
These investments can be held in an IFISA, offering tax efficiency alongside impact.
Why it matters:
You get a clearer link between your money and real-world outcomes – but with higher risk and less liquidity.
Read our Good Guide to Investing for Impact with an IFISA for more.
4. Ethical ready-made portfolios and advisers
For those who don’t want to pick investments themselves, ethical portfolios and advisers can help build a diversified approach aligned with your values.
Firms such as EQ Investors and Path Financial focus on combining financial goals with environmental and social considerations.
Why it matters:
You get diversification and professional oversight, rather than relying on a single product.
Risk warning: When you invest, your capital is at risk.
