Guilt-free investing

I'm not sure whether it was the images from last year's Blue Planet 2, or the frightening statistics I see in my research, but I've found myself wanting to make some life changes this year and do 'my bit' to cut down on the waste I generate.

From using soap instead of shower gel, refilling my shampoo and conditioner bottles at the local garden centre, to buying second hand clothes and putting my own unwanted garments in the school 'phil-a-bag' fund raiser, I've done more this year already than I think I've done in the previous 45.

It's not going to solve the planet's problems but, as the Chinese proverb goes: a journey of a thousand miles begins with a single step.

But more has to be done.

Those frightening statistics...

Demand for plastic has grown 20-fold in the past 50 years, but surprisingly little is recycled – just 15%. 40% goes to landfill, 32% 'leaks' into our environment and the remaining 15% is incinerated.

According to Legal & General, it is estimated that at least eight million tonnes of plastic enter our oceans each year. That's the equivalent of a large rubbish truck full of plastic being dumped into the sea every minute of every day. Shocking.

If we are forced to do something, change can be quick. Take the 5p plastic bag levy introduced in the UK in 2015, for example. It has already reduced singe-use plastic bags by 85% - down from 140 to 25 bags per person on average each year.

Textiles are another problem, according to EdenTree. The average person buys 5kgs of clothes each year, but this figure rises as high as 16kgs in the US and Europe. 73% of these clothes are landfilled or incinerated – that's 1 billion tonnes of clothing each year.

And then there's the invisible pollution in the form of plastic micro-fibres in the oceans; and the 93 billion cubic metres of water, 342 million barrels of oil and 43 million tonnes of chemicals that are used to make the next fashion trend...

Electronic waste is just as bad. The average American now keeps their mobile phone for only 18 months and 60% of global 'e-waste' ends in landfill. To paint a more vivid picture, the world's largest e-waste site is in Ghana: it's a hotspot of hazardous working conditions where children 'cook' microchips and search amidst the debris for scrap metal, among other things.

Closer to home, while less dangerous for our health, the good folk at Gravis tell me that 16% of UK domestic household electricity bills are for appliances just sitting on standby. And shamefully, only 5% of the power drawn by a phone charger is used to charge the phone: the other 95% is wasted when it is left plugged in.

Then the scariest of all the statements so far: just a quarter of a per cent of the world's water is usable, say Pictet. The rest is too salty, too polluted or frozen. And, by 2030, UNESCO says our planet will face a 40% shortfall in fresh water supply.

So it's got me thinking about my investments too. How can I invest guilt-free?

Investing for a better future

EdenTree Investment Management has been a pioneer for responsible investing. For 30 years, it has sought to fully integrate ethical and responsible business practices into its stock selection process to deliver 'Profit with Principles'. The company's flagship fund is EdenTree Amity UK but every fund in its range is run with the same principles.

Aberdeen Standard Investments is another company with a long history of ethical investing. More recently the company has focused on 'impact investing' – not just screening out the bad and looking for the good – but also making sure 'intention' is turned into actions. It has adopted the UN's 17 Sustainable Development Goals and put together its own investment framework to measure impact and bring it mainstream investing. SLI UK Ethical is the most well-known fund of this range.

Rathbones has also adopted the UN's goals and has a dedicated ethical and sustainable investment division – Rathbone Greenbank Investments - providing its screening services. Its Rathbone Ethical Bond fund has been around for the past decade and has a consistently high yield. The company has also recently launched a global equity fund using the same process: Rathbone Global Sustainability.

From clean energy to the newest technologies helping us either use less or recycle more, the investment opportunities are growing by the day. Let's hope the rate of adoption is faster still.

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Sam's views are her own and do not constitute financial advice.

Published on 01/04/2019