Earth Day 2023: Investing in our planet

Earth Day is this weekend – Saturday April 22nd to be precise – when the focus will be on tackling important global environmental issues.

This annual event, which began way back in 1970, encourages people across the world to help create a greener future for our planet. The late Gaylord Nelson, an American politician who battled environmental degradation and social injustice, is recognised as its founder. He wanted to combine the energy of the student anti-war movement with worries about the emerging public consciousness about air and water pollution.

Today, it’s estimated that more than a billion people every year mark the day of action, which aims to change human behaviour and inspire policy changes.

Investing in our planet

This year’s theme is ‘Invest In Our Planet’. Its focus is on the importance of dedicating time and resources to solving climate change and other environmental issues.

Earthday.org, which organises the event, has warned that immediate and significant action is needed to keep global warming below 1.5C. It pointed out that, “nearly every country in the world” isn’t on track to meet Greenhouse gas (GHG) neutrality by 2050, despite governments having enacted significant green policy initiatives.

According to Kathleen Rogers, president of Earthday.org, businesses, governments, and civil society are equally responsible for combating the climate crisis. “We must join together in our fight for the green revolution, and for the health of future generations,” she said. “The time is now to invest in our planet.”

How to get involved

There are plenty of ways to get involved with Earth Day. These include planting trees, reducing plastic consumption, and buying sustainable fashion.

People can also put their money into investment funds focusing on companies that are working towards making the world a better place.

Investment funds doing their bit for the environment

What better place to start than Ninety One Global Environment? This is a global equity fund that has a unique approach of investing only in companies contributing to the decarbonisation of the world economy. It has been specifically designed to tap into the spending required to keep global warming below 1.5C and as well as avoiding creating carbon emissions, companies in the portfolio will also have to have at least 50% of their revenues from three sectors: renewable energy; efficient use of resources, and electrification.

The second fund we’d highlight is VT Gravis Clean Energy Income, which invests in stocks that are benefitting from the secular move to more sustainable energy demands. It aims to deliver a regular income, expected to be 4.5% per annum, and to preserve the investor’s capital throughout market cycles, with the potential for capital growth. The fund also provides exposure to companies that are engaged in the provision, storage, supply, and consumption of clean energy.

Next up is Liontrust Sustainable Future Global Growth, which invests in the shares of a broad range of companies from around the world using a thematic approach to identify the key structural growth trends that will shape the global economy of the future. These range from the development of personalised medicine to the transition to lower carbon fossil fuels. Three mega trends have been identified by the team, with strong and dependable growth prospects. These are: better resource efficiency (cleaner), improved health (healthier), and greater safety and resilience (safer).

Rathbone Greenbank Global Sustainability is another option. This is a high conviction global equity fund that can invest in companies of any size but will have a bias towards mid-caps. The manager will actively avoid businesses involved in unethical or unsustainable practices. The exclusion criteria included are alcohol, animal testing, armaments, extraction of fossil fuels, gambling, nuclear power, pornography, tobacco and poor employment, environment and/or human rights practices. Each holding will also have to have at least one positive environmental, social or governance attribute.

Our final recommendation is the Artemis Positive Future fund, which invests in companies meeting the managers’ criteria for positive environmental and/or social impact. In addition, shares in certain industries, such as alcohol, tobacco, weapons, gambling, animal testing and adult entertainment, are automatically excluded. Its breakdown of asset allocation by UN Sustainable Development Goals puts good health and well-being top currently with almost 35%, followed by industry, innovation, and infrastructure with 22.1%*. Affordable and clean energy is the third most significant with 16.1%, while other areas include clean water and sanitation, reduced inequality, and sustainable cities and communities*.

*Source: fund factsheet, 28 February 2023

_{Photo by Markus Spiske on Unsplash}