Investing for the planet: expert thoughts

Greenwashing

As companies announce a barrage of commitments to reach net zero by 2050, the onus is on their biggest shareholders to hold them to account, said Attracta Mooney in the FT. There’s work to be done. Climate Action 100+, a coalition of big investors, recently found that while “half of the world’s largest carbon emitters had set net zero goals”, pledges often failed to “cover the full scope of their emissions”. Asset managers such as BlackRock have begun “voting against” laggardly directors. But many believe “investors will have to get tougher”.

Leading the field is Sir Chris Hohn, billionaire founder of hedge fund TCI, said Amy O’Brien on City AM. Hohn – who has emerged as a leading financial backer of Extinction Rebellion – reckons that even the Glasgow Financial Alliance for Net Zero (which this week claimed to have attracted a “watershed” $130trn in financial pledges) is dragging its feet over ending “fossil fuel lending”.

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A plethora of funds

The problem for ordinary investors, said Angharad Carrick on This Is Money, is knowing where to start. Nearly 400 ESG funds launched in the first half of this year, according to Morning- star data, and with so much on offer, it’s difficult to pick out the best. Rob Burgeman of Brewin Dolphin singles out the AXA WF Global Clean Economy Fund, managed by Amanda O’Toole, because of its focus on “a pillar of companies poised to benefit” from Activist investors need to “get tough” the new “direction of travel” across recycling, water, energy and food. The fund has returned 24.11% in the past year. He also rates Pictet Global Environmental Opportunities (returning 19.2%), which invests in a range of largely US-based life sciences, water and engineering companies.

Making an impact

Closer to home, many investment managers are fans of Liontrust Sustainable Future UK Growth, which has delivered a 73.59% total return over five years. Alternatively, check out the UK’s largest environmental investment trust, Impax Environmental Markets, which focuses on energy, water treatment, waste technology and sustainable food. Many of Impax’s investments “are not household names”, said Burgeman. “But this is precisely what can make it a good foil for other investments in an area where there can be little differentiation between funds.”