Sustainability and investment opportunities on World Ocean Day

Staci West 04/06/2024 in Sustainable investing

World Ocean Day takes place on Saturday June 8, 2024 – and the focus will be on how to combat climate change for a more sustainable future. Millions of people in more than 150 countries are expected to take part in events to help raise awareness of the need to safeguard our blue planet.

You don’t need to live near the shoreline to have the oceans play a major role in your everyday life. Not only do they provide most of the oxygen we breathe – oceans absorb about 30%* of carbon dioxide produced by humans too, helping to buffer the impacts of global warming, but the ocean also serves as the main source of protein for more than a billion people. The ocean is also key to our economy with an estimated 40 million people likely to be employed in ocean-based industries by 2030*.

Here we take a look at World Ocean Day, explore what it’s trying to achieve, and suggest investment funds for those interested in helping the planet with their investments.

What is World Ocean Day?

First proposed by the Canadian Government at the 1992 Earth Summit in Rio de Janeiro, the day has been officially recognised by the United Nations since 2008. The aim is to bring together thousands of organisations – and millions of people – across the world who feel passionately about protecting our oceans. According to the organisers, climate crisis is one of the greatest threats to our blue planet and all its inhabitants. That’s why the new multi-year theme is “Catalysing Action for Our Ocean & Climate”.

They point out that healthy oceans are critical because they generate most of our oxygen, help feed us, regulate our climate and clean the water we drink. “With sea levels rising, massive storms, and wildfires, it is all too clear that we need government and corporate leaders to take strong local, national, and international action – now,” they stated.

It also directly links to the UN’s Sustainable Development Goal 14 – Life Below Water. The aim is to conserve and sustainably use the oceans, sea and marine resources for sustainable development. The ten targets include the reduction of marine pollution but also: protecting and restoring ecosystems; reducing ocean acidification; conserving coastal areas; sustainable fishing, increased research and implementing and enforcing international sea law.

Popularity and performance

“Doing good” aside, there’s another reason for considering funds that consider the long-term health of the planet when investing: sustainable funds outperformed their traditional peers in 2023, according to a report from Morgan Stanley**. The study showed such portfolios achieved a median return of 12.6%, compared to 8.6% for other portfolios**.

“The strongest returns were in the Americas, with median returns for sustainable funds investing in the region at 21.3%, compared with Europe-focused funds’ 14.1% and global funds’ 12.3%. Sustainable fund assets under management (AUM) globally grew to $3.4 trillion, up 15% from 2022 and reaching 7.2% of total AUM.”

People can also help the planet through the investment decisions they make. For example, they could choose a fund that embraces issues such as sustainability and responsibility. While most funds now recognise the importance of environmental, social and governance (ESG) factors, some portfolios are more focused on these areas.

Read more: A 5-minute guide to ESG investment strategies 

Here we highlight three investment funds that are worth considering if you’re looking to balance returns with looking after the environment.

Three ESG funds for a “blue” portfolio

Janus Henderson UK Responsible Income

Janus Henderson has been a leading name in the increasingly popular world of responsible investing for many years and has developed a well-defined approach to this area. Andrew Jones, who has managed the fund since 2005, starts with all the companies in the FTSE 350 and then removes all the sectors it won’t own due to ethical constraints. Companies avoided include any involved with alcohol, gambling, animal testing, pornography, tobacco, nuclear power and fossil fuel extraction.

Andrew will look at the company fundamentals and identify those with defendable competitive positions and resilient cash flows. We believe he is a very pragmatic fund manager and see this fund as a great option for investors looking for a sustainable yield.

CT Responsible Global Equity

This fund, which is managed by Jamie Jenkins and Nick Henderson, invests in quality growth companies from across the world that have a focus on sustainability. We believe the portfolio stands out from many of its rivals in this space because of the strength of its responsible investing team – and the fact it operates as a separate unit. This means it benefits from bespoke analysis that’s truly independent. In a fast-growing area such as responsible investing, this is a positive.

The managers have adopted a very thorough investment process that involves in-depth analysis of companies that are being considered for selection. Its holdings will predominantly be from developed markets because the governance scores from emerging market companies aren’t quite at the required standards.

CCLA Better World Global Equity

The aim of this fund is to provide a total return (meaning income plus capital growth) over the long-term, which it defines as being at least five years. It typically invests at least 80% of its assets in shares of companies from around the world and favours high quality businesses on attractive valuations that can consistently growth returns.

The fund, which is managed in line with CCLA’s better world policy, is run on a team-based approach with a 11-strong team headed by Charlotte Ryland, the head of investments. We like this fund’s benchmark agnostic, responsible approach of investing in quality businesses at attractive prices. Since its launch in 2022, this has proved to be a very successful philosophy. Overall, our view is that this fund should be a strong consideration for anyone looking for a global fund with an ethical focus.

Read more: The intersection of global equities and sustainability 

*Source: UN, World Oceans Day

**Source: Morgan Stanley, Sustainable Reality, 2024

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