You might be trying to use less gas at home or choosing renewable electricity. But what about the money sitting in your ISA or pension?
If it’s invested in a fund, you own a small slice of the companies that fund holds. Depending on where you invest, those could include businesses digging up coal or producing oil and gas.
Choosing funds with fossil fuel exclusions can help bring your investments closer to your values. The tricky bit is working out what those exclusions actually cover.
Some funds rule out fossil fuel producers altogether. Others allow companies to earn a small share of their income from fossil fuel activities. And a fund described as sustainable may still invest in businesses with links to the industry.
Here’s how to understand the differences, with three funds to consider and a pension option too.
What does fossil fuel-free actually mean?
It sounds straightforward: no coal, oil or gas. In practice, you need to look at the fund’s rules.
Does it exclude companies that extract fossil fuels? What about businesses transporting them, supplying equipment to oilfields or generating electricity from gas? And does it hold banks that finance the industry?
You may also spot a revenue threshold. This is the share of a company’s income that can come from an excluded activity before the fund rules it out.
For example, a policy excluding companies earning more than five per cent of their revenue from fossil fuels could still allow a company earning three per cent. That threshold applies to each company’s revenue, not the proportion of your money invested in fossil fuels.
This is why we’ve explained the limits alongside each option below. A published exclusion policy is much more useful than a green-sounding name.
Three funds to consider
These funds take different approaches to avoiding fossil fuels. They are a starting point for research, rather than a ranking, and none should be read as a promise of zero connection to fossil fuels throughout every company’s supply chain.
1. Triodos Pioneer Impact Fund
Triodos Pioneer Impact Fund invests in smaller and medium-sized companies developing solutions to environmental and social challenges.
Its appeal is being able to see what you own: Triodos publishes the full portfolio, so you can look beyond the fund’s name and find out what the businesses actually do.
The fossil fuel policy: Triodos Investment Management’s published screening rules exclude any involvement in fossil fuel exploration and production, and in coal exploration, production and distribution. For listed shares and bonds, fossil fuel distribution and services have a five per cent revenue threshold.
What to know: Its focus on smaller businesses brings additional risk. This is money to invest for the long term, with room for ups and downs along the way.
Cost and access: There’s an ongoing fund charge of 1.10 per cent. Investing directly also carries an annual service charge of 0.40 per cent on the first £250,000 and 0.20 per cent above that. You can use a Triodos Stocks and Shares ISA or investment account, starting from £25 a month or a £250 lump sum.
2. FP WHEB Sustainability Impact Fund
FP WHEB Sustainability Impact Fund invests globally in businesses addressing environmental and social problems, including cleaner energy, water management and healthcare.
WHEB publishes information about the companies it holds and the positive impact associated with their products and services. That makes it easier to understand the thinking behind your investment.
The fossil fuel policy: WHEB’s published ethical policy rules out companies with more than five per cent of revenues from fossil fuel production and related activities, including exploration, extraction and distribution. A tighter one per cent threshold applies to hard coal, lignite and oil sands. It also screens carbon-intensive electricity generation.
What to know: These are threshold-based exclusions, so it would be misleading to describe the policy as allowing no fossil fuel involvement whatsoever. The fund holds the UK Sustainability Impact label, but that label is not a separate fossil fuel-free guarantee.
Cost and access: The published charge for its C GBP share classes is 1.03 per cent a year, before any platform fees and separate transaction costs. It’s available through investment platforms, including Hargreaves Lansdown, and can be held in a Stocks and Shares ISA.
3. TM Castlefield Thoughtful World Equity Fund
Castlefield’s Thoughtful World Equity Fund invests in companies around the world, assessing their finances alongside environmental, social and governance factors.
If you remember its earlier incarnation as a European fund, the remit has changed. It now looks for investments globally.
The fossil fuel policy: Castlefield excludes companies earning more than 10 per cent of revenue or operating profit, whichever percentage is higher, from specified activities including fossil fuel extraction, mining, processing and production. It also rejects companies where an excluded activity is growing or strategically important, even below the threshold.
What to know: The policy can allow some businesses providing services to the fossil fuel industry, such as environmental or safety services. It’s an option for investors comfortable with these limits; readers seeking the strictest exclusions may prefer a different approach.
Cost and access: The G Income share class has an ongoing charge of 1.02 per cent, before platform fees and separate transaction costs. Castlefield lists availability through AJ Bell, Hargreaves Lansdown and interactive investor, among others. The fund is ISA eligible.
A pension option: PensionBee Climate Plan
Your pension deserves a look too, particularly if you have old pots you have barely thought about since leaving a job.
PensionBee’s Climate Plan tracks a customised Paris-aligned index. PensionBee – a Good Egg company – says it excludes companies involved in fossil fuel extraction, production or power generation, while giving more weight to companies with lower carbon emissions intensity.
It invests entirely in shares, so PensionBee classifies it as a higher-risk plan. It also holds large technology businesses: this is a broad climate-focused investment approach, rather than a portfolio made up solely of renewable energy companies.
The annual fee is 0.75 per cent, halved on the portion of your pension above £100,000. It’s available through PensionBee as a pension, rather than an ISA fund.
Before moving a pension, compare charges and check whether you would lose valuable benefits. For a current workplace pension, first see whether you can change funds within the scheme while keeping your employer’s contributions.
Put your investments through the Good Money Test
Our Good Money Test asks five questions to help you judge whether your money is working in a way you feel comfortable with.
1. Where does your money go? Check which fossil fuel activities the fund excludes and whether it allows any revenue from them. If avoiding fossil fuel finance matters to you too, look at its approach to banks and insurers.
2. Can you see what’s happening to it? Look for a full list of holdings, a clear exclusions policy and regular updates. You should be able to find out what you own without spending an afternoon hunting through the website.
3. Is it doing any good? Find out what the fund actively supports. Does it invest in cleaner energy, more efficient buildings or better healthcare? Does it explain how it measures progress?
4. Are customers treated fairly? Add up the fund charge, platform fee and any dealing or transaction costs. Check that the risks and withdrawal arrangements are clear. An investment needs to work for your finances as well as your values.
5. Do the actions back up the claims? Look for evidence of how the manager votes, challenges companies and responds when an investment falls short. Check whether its wider business backs activities you would rather avoid.
The test helps you compare strengths and compromises. It is separate from our Good Egg accreditation, which involves a more detailed assessment of a provider.
How to get started
Start with what you already own. Find the names of the funds in your ISA or pension, then check their holdings and fossil fuel policies. You may be able to switch funds without changing provider.
Before choosing a replacement, consider the bigger picture: how long you can leave the money invested, how much risk you can take and whether your investments are spread across different businesses and markets.
You do not have to solve every financial decision at once. Checking one fund and understanding where your money goes is a useful first step.
Provider information checked on 3 November 2026. Charges and policies can change, and fees vary between share classes. Fund charges are not necessarily the full cost of investing. This article is information, not personal financial advice. Investments can fall as well as rise, and you could get back less than you put in.
FAQs
Does ESG mean fossil fuel-free?
No. ESG stands for environmental, social and governance. A fund can consider those factors while still owning fossil fuel companies. Look for an explicit exclusions policy and check the holdings.
Does a sustainability label guarantee no fossil fuels?
No. The UK’s four sustainability labels describe different investment approaches, including backing companies working to improve. They do not provide a blanket fossil fuel exclusion. Read the fund’s own rules alongside its label.
Can I hold these investments in an ISA?
The three funds featured above are available for Stocks and Shares ISA investing, although availability depends on the provider or platform. PensionBee’s Climate Plan is a pension product and cannot be put in an ISA.
Do I need a large amount to start?
No. For example, Triodos allows regular investments from £25 a month or a lump sum of £250. Other minimums depend on the fund and platform you choose. Keep money you may need soon in accessible savings.
Will avoiding fossil fuels hurt my returns?
There is no guaranteed outcome. Excluding an industry changes what a fund owns, so its returns will differ from funds that include it. Performance also depends on the companies selected, the price paid, charges and wider markets. An ethical approach does not remove investment risk.
Does selling fossil fuel investments cut emissions straight away?
No. Selling a share usually transfers ownership to another investor. Divesting can align your money with your values and signal that you do not want to own fossil fuel businesses, but it is not a direct measure of emissions avoided. Look separately at a fund’s investments in solutions and its work with companies to encourage change.
Can a fossil fuel-free fund still have a carbon footprint?
Yes. Companies use energy to run offices, factories and transport, even if they do not produce fossil fuels. Excluding oil, gas and coal businesses does not make every company in a portfolio emissions-free.
