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the latest analysis of green and ethical investment

The definition of a green investment fund?

In the public sphere, the term “green” implies a consideration of the environment, and investment funds that use the term in their title are often referring to this definition. However, in the 1990s it was also used to signify a fund with Ethical Screens, with “light green” having a less rigorous screening process than “dark green” funds and it is still used as such by many of these fund managers.
Funds that refer to themselves as “green”, such as the Neptune Green Planet Fund, are usually focused on companies with a positive impact on the environment, some of their investment themes include Clean Energy, Energy Efficiency and Waste Disposal. They will actively invest in companies involved in their themes, similar to those in the Worldwise Environmental or Multi Thematic sections.

There are other types of funds that give themselves a “green” label. Some funds may describe their Ethical Screens as “green”, even if the environment does not play a large role. With these funds it is important to check the list of ethical screens, as a fund may define “green” differently to you. Kames Ethical has “dark green” ethical criteria which are supposedly of the stricter kind, including environment, tobacco and alcohol but the fund is allowed to invest in oil & gas.

“Green funds” as a term that’s used in the press and the public encompasses more than just the funds that self-identify as green. It is sometimes used to mean low carbon, such as the funds which avoid high carbon companies, or those that track carbon-weighted indices. It can also refer to Environmental and Multi-Thematic funds with themes that have a positive effect on the environment.

If you are looking for a fund which avoids certain industries, the Worldwise Investor Fund Library has an Ethical Screens search function to filter the funds. It is also worth noting that thematic funds without ethical screens may still avoid those industries if they do not fall under their fund’s investment themes. For a fund that actively invests in companies with environmental or social benefits, you need to look for one of our thematic funds.

Fund context:

Funds that identify as "green" include Neptune Green Planet, Jupiter Green Investment Trust and WAY Green Portfolio. Jupiter Green is in the Worldwise Investor Environment theme, and actively invests in companies with a positive benefit on the environment, through themes such as Resource Efficiency, Demographics and Infrastructure.

Funds with negative ethical criteria include L&G Ethical, with 11 ethical screens. After the screens have been applied, this fund tracks the remaining companies from the FTSE350. This may be seen as a "light green” fund, as it is not as strict as other funds. Funds which are referred to as “dark green” in terms of their ethical criteria include the F&C Stewardship range, which produces a 52 page document on their stewardship criteria and includes both positive and negative screens.

There are funds that invest in a range of themes that may be considered “green” such as Clean Energy, Environmental or Multi Thematic funds.

Related funds:

F&C Stewardship Growth
F&C Stewardship Income
F&C Stewardship International
Jupiter Green Investment
L&G Ethical
Neptune Green Planet
WAY Green Portfolio

Useful links:

Worldwise Investor: Guide to Ethical and Green Investing

Worldwise Investor: What is an Ethical Fund?

Worldwise Investor: What is a Thematic Fund?

Worldwise Investor: What is an SRI Fund?

Worldwise Investor: What is Responsible Investing? 

Worldwise Investor: What is Sustainable Investing?

Worldwise Investor: Environmental Theme
Worldwise Investor: Multi-Thematic


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Mark Hoskin is a Partner at Holden & Partners. Holden & Partners are Chartered Financial Planners who provide financial advice to high net worth clients, the majority of whom have a significant interest in ethical or environmental issues.

Mark Hoskin graduated with a History degree from Keble College, Oxford and went on to become a Chartered Accountant with Price Waterhouse. He cofounded Holden & Partners in 2003 and is a Certified Financial Planner and Chartered Financial Planner. Holden & Partners set up Worldwise Investor to help both advisers and investors understand quickly and easily how they can benefit from ethical and environmental investment in the UK market.

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The value of ethical and green investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks of investing. Our aim is to provide you with the best information we can to help you make decisions about ethical and green investments. It is not to advise you on the suitability of an investment to your personal circumstances. Nothing written on the site should be considered personal advice, nor do Blue & Green Tomorrow accept liability for any inaccurate information on the site. If you are unsure about the suitability of an ethical and green investment please contact Blue & Green Tomorrow or your financial adviser.

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