Although Covid-19 has very much dominated the headlines over the last 12 months, the issue of climate change remains a pressing one. With lockdowns putting normal life on hold in many countries, 2020 was a year of reflection for millions and, for some, provided the opportunity for a reset whether that be redressing the work/life balance, becoming more thoughtful consumers, prioritising friends and family or adopting greener habits.
Going green has moved up the priority list for lots of us in recent years and there are numerous ways to lead a greener life from turning vegan, reducing single-use plastic, shunning fast fashion or switching to renewable energy.
But there is another, often overlooked, way to do your bit to save the planet that can have a huge impact: investing in a greener way.
While ethical investments were once considered a fad or a luxury for those not depending on a solid return, they have well and truly secured their position in the mainstream in 2020. Indeed The Times newspaper described 2020 as a watershed year for ethical investing and a 2020 survey by UK ethical bank, Triodos, revealed that over a fifth (22%) of investors are planning to invest in an SRI (socially responsible investing) fund in the coming years with over a third (35%) of under 35s saying they would do so.
The good news is that there is no longer the question of having to choose between ethics and return. ESG funds – made up of stocks in companies which adhere to positive environmental, social and governance policies – delivered strong performance in 2020 and are rivalling and even outperforming traditional funds in terms of return.
The table below shows the 10 year performance of some of the top performing UK ethical funds. These figures compare to an average 64% return of the FTSE All Share Index over the same period.
Going green with your investments makes perfect financial sense now that you can marry your personal principles with a decent financial return. If you are looking to divest your retirement funds away from fossil fuel stocks, weapons manufacturers, companies who exploit their workers, tobacco companies or those who test on animals, we can help assess your portfolio to ensure that it corresponds to your principles without compromising on return.
Our investment management partner, Tilney, has a dedicated Ethical Investment Specialist whose job is to review the ESG criteria of funds to establish which companies truly live up to their ethical claims. Our financial planners work closely with Tilney to ensure that your portfolio meets your unique needs both in terms of return and your responsible investing criteria.
Why not get in touch and make 2021 the year you have a positive impact on the world through your investments?
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