How recycling and investing go hand in hand

Recycling has been branded the world’s seventh resource for its crucial role in helping to safeguard the earth’s assets. It saves more than 700 million tonnes in CO2 emissions every year – enough to offset the aviation industry’s carbon dioxide output*. But more can be done to reuse items and protect our precious water, air, oil, natural gas, coal, and mineral resources. 

Global Recycling Day

The Global Recycling Foundation’s annual Global Recycling Day – which this year falls on Tuesday March 18 – encourages everyone to make our planet’s future a priority. The aim of the event is to convince world leaders that a joined-up approach to the issue is needed and encourage people across the world to reduce waste. 

According to the World Economic Forum, just 9% of plastics are recycled globally, which means reusing is now the most powerful market shift that’s needed. Reusable packaging models can provide an over 20% reduction in total annual plastic leakage into the environment by 2040**. There’s also an economic benefit, with the conversion of even 20% of single-use packaging to a reuse model is estimated to represent a $10 billion opportunity**.

Responsible investing

Responsible investment funds under management hit a record £108.4 billion at the end of January 2025, according to the Investment Association***. This is a remarkable increase from the £56 billion held within them just five years ago and illustrates the area’s growing importance to investors. Assets held in such portfolios account for 7% of industry funds under management, which is substantially more than the 3.9% level back in 2000***.

This is good news for investors who have a wide range of portfolios from which to choose – but how should they find the most suitable fund for their needs?

Read more: How can I make my ISA more ethical?

Five funds to consider 

It’s worth pointing out that responsible investing is not straightforward. There are myriad funds with names such as ‘responsible’, ‘green’, ‘sustainable’ and ‘ethical’. Therefore, it’s important that you research the various portfolios to decide whether your aims and objectives are aligned. 

Here we suggest five funds – three equity and two fixed income – that are worth considering by anyone wanting to strike a balance between investment returns and ethical considerations.

CT Responsible Global Equity

This fund, which is managed by Jamie Jenkins and Nick Henderson, invests in quality growth companies from around the world, with a focus on sustainability issues. The fund tends to have a bias towards medium-sized companies. We particularly like the strength of its responsible investing team because its standalone status means the bespoke analysis provided is truly independent. All stocks being considered for investment have to be screened by this team to ensure they meet the criteria for inclusion into its investable universe.

Ninety One Global Environment

Only companies contributing to the decarbonisation of the world economy will be considered for inclusion into this fund, managed by Deidre Cooper and Graeme Baker. The fund’s approach also excludes companies with more than 5% of their revenues coming from oil, gas and coal. Weapons, tobacco, gambling and alcohol are also on the banned list. The managers also take a very high-conviction approach, with between 20 and 40 positions in the fund at any time.

CCLA Better World Global Equity

Our final equity suggestion, which aims to deliver a combination of capital growth and income, invests in quality businesses at attractive prices. Its managers, Charlotte Ryland and Joe Hawkes, target companies offering stable and persistent growth, albeit trading at appealing valuations. 

This fund focuses on achieving real-world sustainability outcomes through active ownership, which means they assess stocks on their financial viability and impact on the world. The areas of importance include labour standards, human rights, health and wellbeing, and climate change. Firms with unsustainable practices are excluded from the investment universe.

Rathbone Ethical Bond

Equities is not the only way in which to embrace sustainable or responsible investing. We also like the Rathbone Ethical Bond fund. This portfolio, managed by Bryn Jones and Stuart Chilvers, invests in quality investment grade bonds and looks for a competitive income whilst generating attractive total returns. 

However, around a third of the index is ruled out as companies involved in mining, arms, gambling, pornography, animal testing, nuclear power, alcohol and tobacco are excluded. In addition, all positions accepted for inclusion must possess at least one positive environmental, social or corporate governance quality.

Liontrust Sustainable Future Monthly Income Bond

Our final contender is another bond fund in which every holding is given a Sustainability Matrix rating, measuring how it helps/harms society and the quality of management. The co-managers – Jack Willis, Aitken Ross and Kenny Watson – aim to produce a monthly income with some capital growth. 

They look to achieve this by investing mainly in corporate bonds, as well as some government bonds, while benefitting from the flexibility to move between shorter and longer-dated positions. Investment themes in the fund include financing houses, connecting people, improving water management, building better cities, and increasing electricity generation from renewable sources.

*Source: Global Recycling Day, 2025

**Source: World Economic Forum, 21 January 2025

***Source: Investment Association, 6 February 2025