Metro’s weekly column, Where to Invest, is for anyone looking for fresh ideas and insight into where they might put their savings.
This week, we delve into the world of green investing.
The global climate crisis hasn’t gone away, despite it falling further down the political agenda in recent years.
The safety of our society and those around the world, meanwhile, has rocketed into the spotlight amid geopolitical tensions, wars both violent and deadly and those fought through trade.
Many people care deeply about tackling climate change and supporting communities less fortunate or more vulnerable than their own.
Switching to an electric car, recycling, and volunteering all make a difference.
Yet one of the most impactful ways to achieve that is to invest your money into companies that are dedicated to improving society, developing clean energy, and tackling climate change.
If that appeals to you, there are hundreds of funds that scour the world looking for companies doing just this.
Here, we take a look at three companies aiming to make a difference in the world while also growing your money in the long term.
Triodos Future Generations Fund
This fund, one of a range on offer from ethical bank Triodos, is all about improving children’s wellbeing.
It invests in small and mid-cap companies that focus on the issues that matter for children right now, such as access to appropriate care, affordable and healthy food, and education.
It also chooses companies dedicated to improving children’s futures by, for example, enabling inclusion, access to clean water, and a healthy environment.
This leads to a quality portfolio that’s differentiated and, because of the focus on life’s essentials, it is relatively low risk.
Good for: Parents who save money for their children, grandparents doing the same for their grandchildren, and young adults who are starting to invest.
Something to think about: The fund is partnered with UNICEF and donates to the children’s charity’s project in Côte d’Ivoire, where schools are built using bricks made from locally collected plastic waste.
Brown Advisory Sustainable Value Fund
This fund is liked by ethical wealth management firm EQ Investors and looks for large, sustainable companies whose shares are undervalued compared to their peers.
It invests in companies with a long history of generating cash flows, proven business models and can demonstrate they have potential to drive sustainable outcomes for either people, process or product – the 3Ps.
It offers something different from index funds top heavy on the Big Tech giants. Instead it owns a portfolio of quality US large-cap businesses trading at attractive valuations, particularly in the healthcare, financial, and industrial sectors.
Good for: Investors focused on sustainability and avoiding companies that may have controversial business activities.
Something to think about: At the moment, the fund has a preference for Asian and emerging markets, as well as alternative assets such as infrastructure and gold.
Quilter Cheviot Sustainable Opportunities Balanced Fund
The Quilter Cheviot Sustainable Opportunities Balanced Fund is committed to supporting the development of sustainable societies by pursuing five environmental and social investment themes.
These are clean energy, food, health and wellbeing, resource efficiency, and water.
The fund’s managers, Claudia Quiroz and Harry Gibbon, actively invest in a broad range of company types to reduce the volatility of returns that can sometimes be present in sustainable funds over the long term.
“We have a dedicated sustainable investment team with a vast amount of collective experience and knowledge,” they said.
“This allows us to take a comprehensive and holistic approach in identifying the winners of the future from both an investment perspective, as well as a sustainability one.”
The fund chooses holdings based on the UN Sustainable Development goals and aims to have at least 50% of each company’s revenue aligned with targets, such as clean water and sanitation, affordable and clean energy and industry, innovation and infrastructure.
Good for: Anyone looking for long-term investment opportunities in attractive sectors and future-proofed companies that favour both people and the planet.
Something to think about: The fund’s performance has been a bit rocky of late but remember that investing in the planet’s future is a long-term play. Hold your nerve and you’re likely to grow your money and feel good about it ethically.
