Last week, Prime Minister Rishi Sunak announced the rollback of the UK’s net zero targets saying he would be delaying the 2030 ban on gas and diesel cars until 2035. Not only that, but he also rejected a series of environmental proposals including one that would require landlords to make properties more energy efficient.
In doing so, Sunak received a barrage of criticism and saw his approval rating among the public drop to the lowest level it has ever been. He did, however, earn the praise of former US president and climate denier, Donald Trump, who posted on his social media site, Truth Social, that he “always knew Sunak was smart,” and that “he wasn’t going to destroy and bankrupt his nation for fake climate alarmists that don’t have a clue.”
With Good Money Week starting on 2nd October 2023, Darius McDermott, managing director of FundCalibre, highlights five Elite Rated funds that could help us achieve net zero, and make a profit, without sacrificing any principles.
1. First Sentier Global Listed Infrastructure
While not an obvious first choice, net zero will really only be achieved by a substantial investment in infrastructure assets. When it comes to electrification of the transport sector, for example, a huge proportion of investment will need to be in the transmission and distribution networks behind the charging station – the utilities which will help us get from place to place. Then there is aviation, shipping, and the industrial sector to consider. First Sentier Global Listed Infrastructure fund seeks to deliver income and some capital growth by investing in listed infrastructure companies around the world. It invests in ‘hard’ infrastructure around the world, via listed companies that own the assets.
2. JPM Climate Change Solutions
As the name suggests, this fund invests in companies that are developing solutions required to address climate change. The key themes it seeks to tackle are renewables & electrification, sustainable transport, sustainable food & water, sustainable construction, and recycling & re-use. The process begins with the use of ‘ThemeBot’ an AI investment engine, which employs natural language processing and big data to scan millions of sources to help identify companies that are most exposed to the climate change theme. The team then considers factors such as the attractiveness of the business, including its economic value creation, sustainability, and governance.
3. Ninety One Global Environment
This fund has a unique approach – only investing in companies that will help the decarbonisation of the global economy. It is estimated that, in order to reach global temperature goals of a maximum 2C rise, $2.4 trillion per year will need to be spent or reallocated. This fund looks to tap into the companies that will benefit from that spending. As well as avoiding creating carbon emissions, companies in the fund will also have to have at least 50% of their revenues from three sectors: renewable energy; efficient use of resources, and electrification.
4. R&M Global Sustainable Opportunities
R&M Global Sustainable Opportunities is a high conviction, value-orientated fund, that invests in companies of all sizes. It offers a real alternative to the average global sustainable fund, which usually comes with a large-cap growth style tilt. The fund’s favoured area is finding undervalued quality businesses. Its key sustainability objective is aligning with net zero by 2050. It’s interesting, different, and applying a proven process. The three main areas of focus are people, innovation, and the environment.
5. VT Gravis Clean Energy Income
This fund taps into the mass adoption of renewable energy. It invests in a blended portfolio of the best listed vehicles across the developed market and gives an anchor to portfolios through defensiveness and steady income. The portfolio includes assets that derive energy from renewable, zero emissions sources, as well as companies saving energy through efficiency measures. This includes solar, wind and hydro-electric power, as well as energy storage, energy efficiency, bioenergy, geothermal, heat pumps and the smart grid.
