Dominic Rowles, head of ESG at Hargreaves Lansdown, looks at what Earth Overshoot Day means for investors as pressure on natural resources creates new risks and opportunities.
‘Earth Overshoot Day’ marks the point each year when humanity’s demand on nature ‘overshoots’ what the planet can regenerate within that year, to meet those demands. It serves as a reminder of how unsustainable our consumption patterns are and the strain they are putting on Earth’s ecosystems.
Calculated by the Global Footprint Network, this year it falls on 30 July. Although this is six days later than the date recorded in 2025, methodological revisions, rather than genuine improvement, explain most of the change. The broader long-term trend therefore remains unchanged: since the 1970s, Earth Overshoot Day has generally shifted to earlier in the calendar.
‘Overshoot days’ are calculated for individual countries too. If the whole planet consumed resources at the same rate as we do here in the UK, the overshoot would occur on 22 May. Qatar has the earliest Overshoot Day, which occurs on 4 February.
What does this mean for investors?
Pressures on natural resources can create both risks and opportunities as governments, consumers and businesses respond to environmental challenges.
Earth Overshoot Day can present a good time to review portfolios and consider how each company you invest in is preparing for a more sustainable future. Checking their websites and annual reports is a great way to gauge progress.
If you invest in active funds, you should make sure they are considering the sustainability credentials of the companies in which they invest. Some funds go further, excluding companies considered to have the greatest negative impacts on the environment. Others focus on businesses and assets linked to environmental solutions. Below, we look at two funds taking very different approaches.
Aegon Ethical Equity
Audrey Ryan has managed the Aegon Ethical Equity fund for 25 years. She aims to identify and understand the key environmental, social and governance risks facing each company, industry and sector in which she invests. She believes that companies demonstrating strong governance and sustainability practices are better positioned to deliver attractive long-term returns for investors.
The fund applies a strict set of ethical exclusions. It will not invest in companies involved in activities deemed unethical, including tobacco and alcohol production, munitions manufacturing and banks with significant exposure to developing world debt.
The fund also avoids businesses whose activities contribute to some of the environmental pressures highlighted by Earth Overshoot Day. This includes companies involved in coal mining, and oil and gas exploration and production; firms with serious pollution convictions; businesses that breach internationally recognised biodiversity standards, and companies in energy-intensive industries that are not addressing climate change and hazardous chemical risks.
Liontrust SF Corporate Bond
The Liontrust SF Corporate Bond fund invests mostly in sterling-denominated investment grade corporate bonds, issued by companies that make a positive contribution towards sustainable development for people or planet.
The bonds it invests in can, broadly, be split into three buckets – ‘greater safety and resilience’, ‘better resource efficiency’ and ‘improved health’.
Within these buckets, there are various sub-themes, like ‘increasing electricity generation from renewable sources’, ‘delivering a circular materials economy’, and ‘enabling healthier lifestyles’.
Current investments include bonds issued by Spanish utility company, Iberdrola. The latter is involved in the generation, distribution, trading, and marketing of electricity, and is one of the world’s leading investors in energy transition.
The company is investing €58bn until 2028 to support electrification, energy security, employment, and progress towards net zero emissions. This includes €38bn earmarked for electricity networks across the UK, the US, Brazil and Spain – so helping to modernise grids to meet growing demand.
Alongside its focus on companies contributing to sustainable development, the fund applies a range of exclusions. It does not invest in companies deriving significant revenues from the extraction or production of coal, oil and natural gas, or from coal-fired power generation. The fund also excludes businesses involved in illegal logging, the destruction of primary forests, and activities linked to ozone-depleting substances, as well traditional ‘sin stocks’ such as those with significant revenues from tobacco, gambling and adult entertainment.”
