Invest in the Planet this Earth Day

Earth day is April 22nd this year and the theme is “Invest in our Planet” so why not review your actual investments for a more positive – or less negative – impact on the planet.

Our pension savings can make up a good proportion of our wealth and unless we’ve specifically considered ethical investing before it’s likely many of those investments are in companies doing more harm than good. For example fossil fuels, tobacco and arms and not necessarily in companies actively pursuing social responsibility or renewable options.

To support “investing in the planet” you could consider starting investments in more ethical, sustainable or socially responsible funds. Here’s some suggestions:

  • Choose an ISA with access to ESG Funds
  • Switch your pension into an ethical portfolio
  • Invest your kids Junior ISA into cleaner or greener funds for their future, financially and environmentally.

There are thousands of ESG, Sustainable and Impact funds already available. These will continue to grow as more businesses step up to being environmentally and socially responsible and more investors move money away from traditional funds into greener choices.

How can Invest Responsibly?

The same principles apply for ethical investing as for traditional investing so make sure you

  • Have a purpose for investing for example toward retirement, for the kids future
  • Already have a cushion of cash emergency savings so can set this money aside for the medium to long term (5 years + )
  • Can afford to take a risk with this money, and wont need to rely on it in the short term if the value has fallen
  • Diversify you investments across a range of funds/shares rather than buy single stocks & shares
  • Invest consistently, this spreads the risk as you invest into the downs and the ups and the cost averages out
  • Don’t panic or sell when it falls, it will likely rise again and you’re in this for the longer term.

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DIY Investing for Impact

There are a wide range of “platforms” available for DIY investing. A platform is effectively a financial supermarket. These platforms offer a variety of products or “tax wrappers” including Pensions, ISAs, Junior ISAs and some also offer Lifetime ISAs as well as general investments. Within your wrapper you can select from a wide range of stocks, shares and funds including many ethical options.

Platforms are handy as all your investments are in one place for ease of access, monitoring, review and consistent investing. Be mindful to research the costs and charges as platforms will have a cost to access the product and funds will have a percentage charge for the fund. Sometimes there may be exit or transaction costs as well.

Some suggestions to look at are:

  • AJ Bell
  • Best Invest
  • Fidelity

Ethical Platform to consider:
The Big Exchange. This is a relatively new all ethical platform co-founded by the producers of big issue on a mission to “We want the financial system to work for everyone. We want it to contribute solutions to the world’s biggest challenges: a climate crisis and social inequality.” They currently offer ISA only.

Most platforms have a range of research tools and fund information or do your own research on ESG funds using a tool such as Morning Star

Invest with Robo-Advisers

These are often App or PC based solutions that find out a bit about you and what you want to achieve and then will suggest a portfolio that matches your goals and risk profile. All of these have some sort of Ethical, Sustainable or ESG options available.

Not all of them offer pensions so check the products available first. And again compare charges, costs and review their suggested portfolio before committing.

  • Wealthily
  • Nutmeg
  • Moneybox

Ethical Robo-Adviser to consider:
Clim8Invest has specifically positioned itself as ethical option with a mission to “We believe tackling climate change is our chance to collectively contribute to a fairer world. Together we can shape a more sustainable future. By investing for the planet, you can make a positive impact today.” They currently offer ethical ISA & General Investments.

Ask for Help with Ethical Investing

If you’re not feeling confident about which funds, how much to invest or whether you need a pension and/or an ISA then ask for help from an expert.

  • Find a qualified regulated financial adviser or planner to help. They’ll take the time to really get to know what you value, what issues are important to you and has the ability and tools to research the ESG funds that may suit you.
  • If you have a works pension contact your HR or pension person at work and ask them for a list of ESG funds that you can instruct a switch into
  • Contact your ISA/Pension Provider direct and request a list of ESG or sustainable funds

As always with investments the value can fall as well as rise and your original investment may be at risk.

Not ready to invest? Then check out 3 switches for ethical banking instead

Need more help successfully doing Money with Purpose?

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