Everything you need to know about sustainable investing
Dive in and find out what sort of sustainable investor you are, how to get started and more!
What are the options?
Ethical funds...remove ‘sin stocks’ such as tobacco, weapons and pornography.
Sustainable funds...try to actively back those firms which have sustainable goals or operations.
Thematic funds...back a theme so are pretty focused by definition.
Impact funds...have a much higher burden of proof but may carry higher risk and less diversification.
...remove ‘sin stocks’ such as tobacco, weapons and pornography.
Ethical funds
...remove ‘sin stocks’ such as tobacco, weapons and pornography.
Sustainable funds
...try to actively back those firms which have sustainable goals or operations.
Thematic funds
...back a theme so are pretty focused by definition.
Impact funds
...have a much higher burden of proof but may carry higher risk and less diversification.
Most Brits are Aspirational Greens. Does this sound like you?
Performance comes first but you’re interested in investments which are working towards greener goals. Have a look at which 5 well-rated funds tick the experts’ boxes.
Leading funds mapped to your preferences
We’ve scoured 1,000s of sustainable funds and narrowed it down to this shortlist, mapped to 7 different types of investor. Want to find out which one you are? Take our quiz to learn if you're an Eco Warrior, a Social Champion, a Pure Returns or more!
More on Sustainable Investing
Read more about Sustainable Investing with these informative articles on ethical investing, climate & planet and social equality.
Ethical investing
Do companies that ‘do good’ make good investments?
Investing in line with your principles is not new; the first ethical funds were launched in the UK in the mid-1980s. But can this boost your investments? Find out in this article...
Sponsored by The Big Exchange
Climate & planet
Biodiversity funds – how, why, and what?
More and more investment strategies are launched focusing on new themes, issues, and industries. Which leads us on to Biodiversity. Check out what’s the hype, why we are seeing it, and how it is investable...
Sponsored by The Big Exchange
Social equality
Why do so few women invest?
Statistics show that more men invest than women. Perceptions and societal factors might be the cause, but with research showing that women make good investors, is it time to change our views?
Sponsored by M&G
Frequently asked questions about sustainable investing
What is sustainable investing?
Sustainable investing means putting your money into funds or companies that aim to deliver financial returns while also having a positive effect on the environment or society, or at least avoiding harm. It's an umbrella term covering ethical, ESG, green, thematic and impact investing and approaches vary widely, so it's not one size fits all.
What is ESG Investing?
ESG stands for Environmental, Social and Governance. It uses these three factors to assess how well a company manages risks and opportunities: carbon emissions, treatment of staff and board accountability. Fund managers use ESG scores to pick or avoid companies, but an ESG fund isn't automatically "green" or ethical.
What's the difference between ethical, sustainable, thematic and impact funds?
Ethical funds screen out "sin stocks" such as tobacco, weapons and pornography. Sustainable funds actively back companies with sustainable goals or operations. Thematic funds focus on a specific theme, like clean energy, so they are narrower in scope. Impact funds target measurable positive outcomes, with a higher burden of proof, but may carry higher risk and less diversification.
Do sustainable investments perform as well as regular investments?
Sustainable funds can perform as well as, or better than, traditional funds but results vary by fund and time period. Excluding sectors like oil and gas can help or hurt returns depending on market conditions. As with any investment, past performance isn't a guide to the future and your money can fall as well as rise.
How can I spot greenwashing?
Sustainable funds can perform as well as, or better than, traditional funds, but results vary by fund and time period. Excluding sectors like oil and gas can help or hurt returns depending on market conditions. As with any investment, past performance isn't a guide to the future, and your money can fall as well as rise.
What are the FCA's sustainable investment labels?
Under the FCA's Sustainability Disclosure Requirements (SDR), UK funds can use four labels: Sustainability Focus, Sustainability Improvers, Sustainability Impact and Sustainability Mixed Goals. Labelled funds must meet strict criteria and report on their progress. Not every sustainable fund carries a label, but labels add an extra layer of protection against greenwashing.
Which type of sustainable investor am I?
Boring Money groups sustainable investors into seven types, including Eco Warriors, Social Champions, Pure Returns investors and Aspirational Greens, the most common type, who prioritise performance while wanting greener goals. Take our free quiz to find your type and see a shortlist of well-rated sustainable funds matched to your priorities!
Can I invest sustainably in an ISA or pension?
Yes. Most investment platforms let you hold sustainable funds inside a Stocks and Shares ISA, so any growth is tax-free, and many workplace and personal pensions offer ethical or ESG fund options. Check your pension's default fund, as it may not be climate-friendly, and ask your provider which sustainable alternatives are available.
How do I choose a sustainable fund?
Start by deciding what matters most to you, whether that's avoiding harmful industries, backing climate solutions or maximising returns. Then compare funds on their holdings, fees, performance and sustainability label. Boring Money has scoured thousands of sustainable funds to create a shortlist of top-rated options mapped to seven investor types.
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