The Scottish Mail on Sunday
If you’re a big fan of Greta, you can even have a carbon-free Isa!
SUPERMODELS may have a target of being size zero – now, increasingly a big ambition of corporate chiefs is to see their company become net zero.
This is a position where your carbon dioxide emissions and the amount of greenhouse gas you are taking out balance out to nothing.
With big businesses such as BP, Unilever and Nestle committing to being net zero by 2050, it is worth examining whether, as an investor, you can benefit from making similar commitments with your own Isa portfolio. Lisa Stanley, co-founder of sustainable money website Good With Money, says decarbonising your Isa portfolio is no longer a strategy for the few. She says: ‘With growing evidence showing returns from investing sustainably are as good if not better than more carbon-heavy counterparts, there’s little reason not to go down this route.’
Those with conventional investment portfolios may struggle to work out how to decarbonise an Isa portfolio. As well as the dif
ficulty of finding precise data on the carbon impact of individual businesses, investors face the problem of sorting the truly ‘green’ options from the merely cosmetic.
Jason Hollands, a director of wealth manager Tilney, says some funds that claim to consider environmental, social and governance (ESG) factors in their choice of investments, conduct no more than ‘tick box exercises based on disclosures in glossy company reports’.
Others say there are investment funds with a genuinely sustainable focus. Hollands suggests Wheb Sustainability, saying: ‘Wheb Asset Management is a small boutique group focused on sustainable investing and so this fund isn’t just one of many funds run by a large business. It’s what they live and breathe.’
Darius McDermott, managing director of Chelsea Financial Services, recommends Investec Global Environmental – a fund ‘that specifically invests in companies that are helping to decarbonise the global economy’.
He also likes Janus Henderson UK Property. He says: ‘It has just committed to be carbon neutral by 2030. The managers and team are working with properties to reduce water waste, make lighting and heating more efficient and use more renewable energies.’
For those who prefer not to choose their own funds, Good With Money’s Stanley suggests using investment platforms that can help you put together an ESG-friendly portfolio. They include Interactive Investor, Nutmeg and The Share Centre (see above) as well as EQ Investors and Ethex.
Even after picking more sustainable funds, you may not have entirely decarbonised your investments. ‘We all have a carbon footprint, so it’s a big ask of any Isa to be completely carbon neutral,’ says Rebecca O’Keefe, head of investment at Interactive Investor. ‘Even watching telly has a carbon footprint – due to the power consumption of the equipment.’
Decarbonising is a balancing act, so try adding in some positive environmental investments to bring your score down. Offsetting options for the brave include Innovative Finance Isas with a specific environmental focus. Stanley likes Thrive Renewables which operates energy projects across the UK, and Energise Africa which invests in solar energy projects. These