Is ESG investing still worth it? Five funds to consider
By James Yardley on 19 August 2026 in Sustainable investing
Are investors falling out of love with sustainability? Millions of pounds are being withdrawn from responsible funds every month, according to Investment Association data*. The lack of enthusiasm has been blamed on concerns over performance figures and shifting government priorities surrounding renewable energy.
But are investors missing a trick? Here we look at the broad benefits of ESG (environmental, social and governance) factors and which funds are still worth considering.
Overview of ESG
ESG is a core part of responsible investing and has become mainstream because attitudes towards climate change, pollution and shareholder relations are known to affect valuations. International companies have recognised that paying close attention to the wider environment and how they operate influences their reputation. But opinions on ESG-related issues appear mixed. While responsible funds are enduring regular outflows from UK investors, global interest in the area remains high.
Reasons to consider ESG
So, who is right? If virtually every fund incorporates such factors to some degree, then what are the reasons for considering portfolios that focus on ESG?
- Huge infrastructure investment: Annual global infrastructure spend is forecast to soar from $4.4 trillion in 2024 to US$6.9 trillion in 2050, according to PwC. That’s a cumulative investment of $151.1 trillion**.
- Climate change is a multi-year trend: This isn’t going away anytime soon. Most countries have targets in place to meet temperature goals. The UK, for example, is committed to reaching net zero by 2050.
- Global interest remains high: According to Morgan Stanley, 92% of global respondents describe themselves as being “very or somewhat” interested in sustainable investing***.
- Exposure to problem-solving companies: Specialist businesses are constantly emerging with fresh perspectives on solving energy-related crises and benefitting from broader ESG trends.
- Investment in well-managed businesses: Companies that pay attention to how they operate tend to be well-managed, responsible organisations that are arguably more likely to achieve consistent longer-term returns.
How FundCalibre approaches ESG
FundCalibre has assessed the ESG credentials of every Elite Rated and Radar fund since 2022. Rather than treating ESG as a simple yes-or-no question, we classify funds into three categories.
ESG Explicit funds put sustainability at the forefront of their investment philosophy, with ESG considerations fundamentally influencing stock selection. ESG Integrated funds incorporate ESG analysis as an additional input into investment decisions, while ESG Limited funds may consider certain factors, but ESG does not materially influence the overall portfolio.
These assessments are based on our own qualitative research and are designed to complement, rather than replace, the FCA’s official sustainability labels.
Five sustainable funds to consider
Most fund managers claim to incorporate ESG issues, but there’s a difference between paying lip service to the benefits and truly embracing the strategies.
Here are five investment funds that put these factors front and centre in their portfolio construction – and why we favour these portfolios.
Ninety One Global Environment
Equity
This is a unique global equity fund that invests only in companies contributing to the decarbonisation of the world economy. This means ESG factors are a definite priority. We believe its proprietary screen is comprehensive and that the fund is set to benefit from the $2.4 trillion in annual spending required to meet global temperature goals. It is also broadly diversified across geographic and sectoral exposures. Currently, its largest stock holding is 6.7% in TSMC^.
Liontrust Sustainable Future Managed
Multi-Asset
Liontrust Sustainable Future Managed
ESG is a primary feature of this fund’s investment strategy. Its managers have built sustainability into the selection process through thematic analysis, ESG analysis, and company engagement. The fund, co-managed by Peter Michaelis and Simon Clements, aims to deliver long-term capital growth by investing in global equities, bonds and cash. According to a recent update, its strongest performers have been closely tied to the ongoing AI and semiconductor investment cycle. These include Palo Alto Networks and ASML^^.
CT Responsible Global Equity
Equity
This fund invests in high-quality growth companies worldwide. While avoiding those with unsustainable business practices, it invests in those with resolvable problems. All potential holdings undergo screening by its responsible investment team. We believe the strength of this unit sets the fund apart from rivals. Its sustainability themes are: energy transition, resource efficiency, sustainable infrastructure, sustainable finance, societal development, health and wellbeing, and technological innovation.
Regnan Sustainable Water and Waste
Equity
Regnan Sustainable Water and Waste
This is a thematic, global, high-conviction fund that focuses on identifying companies with exposure to the water and waste value chains. Its holdings include Watts Water Technologies^, which designs and manufactures products for the water-regulation market. It has bases in the US, Canada and Europe. We like that this fund is distinctive and focuses on a largely under-researched area with significant global importance.
Rathbone Ethical Bond Fund
Fixed Income
ESG is also alive and well in fixed income. Ethical research for this fund is provided by Rathbone Greenbank Investments, a dedicated sustainability team within the firm. Attractive corporate bonds identified by the manager will be assessed by ethical researchers against a number of positive and negative criteria. For example, its ethical exclusions include no mining stocks or holdings in companies involved in arms, gambling, pornography, tobacco, and other areas.
*Source: Investment Association, 6 August 2026
**Source: PWC, 28 April 2026
***Source: Morgan Stanley, Sustainable Signals 2026
^Source: fund factsheet, 31 July 2026
^^Source: fund review, 24 July 2026
This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.
Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.
Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.
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