How to invest sustainably this Earth Day

Next Monday (April 22) is Earth Day, an annual event designed to bring both attention and support towards environmental protection. The stated mission is to “diversify, educate and activate” the environmental movement worldwide.

Earth Day explores ways to end plastic pollution, fight climate change and protect the land, air, water and wildlife across the world. The first Earth Day was back in 1970 and it’s grown in popularity ever since. 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.

Planet v Plastics

Demanding a 60% reduction in the production of all plastics by 2040 will be one of the key themes for Earth Day 2024*. The ultimate goal of the organisers, however, is to build a “plastic free future” for future generations, with the help of individuals, businesses and governments.

Kathleen Rogers, president of the Earth Day Network, said: “The Planet v Plastics campaign is a call to arms, a demand that we act now to end the scourge of plastics and safeguard the health of every living being upon our planet.”

The campaign against plastic has also highlighted some interesting statistics. These include the fact more than 500 billion plastic bags – one million per minute – were produced last year*. And while many plastic bags have a working life of a few minutes, it’s followed by an afterlife of centuries.

Similarly, there were also 100 billion plastic beverage containers sold in the US. Although people seldom think of water when they think of plastics, making a plastic water bottle requires six times as much water as the bottle itself contains*.

Learn more about pollution, plastics and the pandemic 

The funds doing their bit for the environment

There are plenty of ways to get involved with Earth Day, not least choosing a fund that embraces issues such as sustainability and responsibility. While many portfolios have recognised the broad importance of environmental, social and governance (ESG) factors, some take a more focused approach.

What better place to start than CCLA Better World Global Equity? This is a global equity fund which aims to provide a total return by investing at least 80% of its assets in global shares and is managed in line with CCLA’s better world policy. Manager Charlotte Ryland says “rather than simply investing in companies that are already leaders from a sustainability perspective, we use our portfolio as a platform for real-world change.”

One example of this is their recent engagement with PepsiCo on their use of plastics: “The company has set 2030 targets on reducing the tonnage of virgin plastics used in both absolute and per serving terms. Yet despite these targets, the company has increased its use of virgin plastic in recent years. We are pushing for improved performance against the company’s targets. Following our meeting, we later learnt that PepsiCo is being sued by New York state over its role in plastics pollution. Engagement will continue in 2024.**”

The second fund we’d highlight is Janus Henderson UK Responsible Income, which has a well-defined approach to investing responsibly, combined with a tried and tested equity income investment process. Andrew Jones is a very pragmatic fund manager. He took on the fund due to his understanding of the need for responsible investing and mitigates any biases this may create to generate a well-rounded portfolio. For those looking for a sustainable yield – in both senses of the word – this makes for a great option for investors.

Learn more about UK Equity Income 

Next up is CT Responsible Global Equity, this fund aims to achieve long-term capital growth, by investing in quality growth companies from around the world and has a focus on sustainability. This means that not only are companies involved in areas such as alcohol, weapons and nuclear, not considered, it will also actively look for those making positive contributions. What makes this fund stand out from the crowd is the strength of the responsible investing team: it is a separate unit meaning bespoke analysis which is truly independent.

Our final recommendation is Rathbone Greenbank Global Sustainability. 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. Additionally, each holding will also have to have at least one positive environmental, social or governance attribute.

Read more about the intersection of global equities and sustainability 

*Source: earthday.org

**Source: fund factsheet, February 2024