Invest for a better planet
We’re living in a world where sustainability is becoming part of our everyday life. This doesn’t just mean switching up our coffee cups or buying a new electric car. We’re also taking a greater interest in ways in which we can invest sustainably, making a positive environmental impact, while still getting an investment return. So, let’s use our Compare+Invest simple investment calculator to find some of the best platforms for making sustainable investments.
What to look for?
Investments: Sustainable investing (sometimes referred to as environmental, social and governance, or ESG for short) covers a very wide area so you need to be comfortable with the investments and portfolios that are on offer. Does the platform explain the types of industries and firms it invests in and equally as important, the areas it does not invest in?
Cost: Different firms manage their investment funds in different ways, which results in differing costs. The same is true for sustainable funds, some are very straightforward and low cost but for others, you might be paying for someone to actively manage your investments and make sustainable selections on your behalf, so these may cost a little bit more. Be sure to check if there is an additional cost for funds, on top of the customer or platform charge.
App based: Most platforms offer a mobile app and this is a great addition when you’re on the go and keeping tabs of how your investments are performing. If it matters to you, make sure one is on offer.
Who is managing your money: If you’re investing for sustainability then you are probably wanting to invest with a company who you think are doing the right things. So, look around, do some research on them and find out who they are.
We’ve run the numbers through our simple calculator and here are the top five investment platforms offering sustainable investments based on a £3,000 investment into an ISA. The results are ranked by cost, lowest first.
1 Vanguard
You might have seen one of Vanguard’s adverts on TV recently, but the company has been around for a long time and is one of the biggest fund groups in the world. The platform itself is a little newer and was launched in the UK in 2017.
Vanguard is one of the most cost-effective platforms in the market and provides access to its own Vanguard funds. It has a large number of sustainable funds and explains the investment approach of each one. Vanguard has been managing sustainable funds for over 20 years, including the well-known FTSE Social Index fund which has been running since 2000.
The one limit on the choice is the platform only provides access to its own funds. However, it is cost effective and has an experienced team behind the wheel.
2 AJ Bell
AJ Bell is another brand that has been advertising on TV recently and has also been around for a long time. The platform is competitively priced and has a wide range of investments to choose from.
AJ Bell has also been offering sustainable funds for a number of years. In addition, in March this year it announced it is also going to be running its new Managed Portfolio Service range of funds on a sustainable basis.
AJ Bell scores well for access as you can access the platform via an app and other devices such as Amazon Echo, so you’re never out of touch with your investments.
3 Close Brothers
Close Brothers is a well-established asset management firm in the UK that now also offers a competitively priced platform with sustainable investment options.
In line with its historical routes, Close offers a wide range of investment options but its online portfolio selector tool provides a shortlist of ready-made investments, including a small range of its own inhouse sustainable funds. Close also provides access to its own in-house investment research and analysis which is designed for both experienced investors and those just starting out.
Its online service is easy to use and allows customers to create a more detailed view of their overall financial picture by adding assets (or debts) not held with Close. An ISA can also be viewed on the go with the Close Brothers Asset Management App.
4 The Big Exchange
The Big Exchange launched in 2020, making it one of the newer investment platforms in the market. It was co-founded by the Big Issue, who remain the largest shareholder.
The Big Exchange only provides access to sustainable investments that have a positive impact on the world. It aims to give ethically minded investors the opportunity to make their money work harder for them as well as the planet and the people on it.
It has a range of ready-made investment portfolios for new investors or a wider range of investment funds that meet its own in-house sustainability criteria.
5 Charles Stanley Direct
Charles Stanley is another firm with an asset management background. It provides a wide range of investments that would be expected from a firm of its heritage. It is working hard to increase its client base by trying to attract those who are new to investing.
The service, and in particular the support around it, is built with these new investors in mind. There is a variety of support available, including a range of case studies to help navigate the investment selection available. The sustainable investment section is very comprehensive and easy to understand and contains a number of real-life examples on the benefits of sustainable investment.
Charles Stanley provides access to your investments via an app which has also recently been upgraded to provide more investment help.
How do they price up?*
Sustainable investing doesn’t have to be expensive. We plugged our scenario into our Compare+Invest simple investment comparison tool. This is for people who are new to investing and do not have a lot of investment knowledge.
We put the full £3,000 into an ISA and also selected Yes to sustainable investments and Yes to a platform with lots of tools, research and guides for customers. That’s all there is to it. These are the annual platform or customer costs.
| Platform | Annual cost |
|---|---|
| Vanguard | £4.50 |
| AJ Bell | £7.50 |
| Close Brothers | £7.50 |
| The Big Exchange | £7.50 |
| Charles Stanley Direct | £10.50 |
*The charges are indicative and may change slightly as the value of your investment changes. Remember there may be additional fund charges, depending on the investment selections you make so keep an eye out for these.
What next?
We all need to take our next steps to live more sustainably, and investing is a great way to see where you have made a positive impact. Take a look at our individual platform pages on Compare+Invest to find out more about the providers we’ve been looking at.
Photo by Marcus Spiske on Unsplash
