Best Place To Invest Your Money Spring/summer 2017

More money has been flowing into funds focused on environmental, social and corporate governance (ESG).

In the 12 months to June 2020, flows into ethical and ESG funds doubled over the year, according to investment platform Hargreaves Lansdown.

The pandemic seems to have reinforced interest in a more diversified portfolio with this type of investing.

Many experienced investors are fearing that the economic fallout seen during coronavirus could happen again if the world fails to reduce carbon emissions.

If you want to switch from investing in crude oil to more sustainable types of investment, read this to give you some ideas.

Where should I invest my money ethically in 2021?

Becky O'Connor from investment platform Interactive Investor, believes there will be more of the same in 2021.

She says: "Political focus on green issues will keep the welfare of the planet at the forefront of people's minds – the UK will host COP26 [the UN Climate Change Conference] and the US has re-entered the Paris climate change agreement."

John Moore from wealth manager Brewin Dolphin claims that seeing more traditional investments stumble in 2020 has given some experienced investors pause for thought.

"When oil stocks and airlines performed badly, it validated a lot of people who thought that it wasn't good to have such stocks financially as well as ethically."

Sustainable and ethical investing has been the key driver behind the growth in assets under management this year, at what's been a difficult time for some sectors.
Becky O'Connor

What ethical stocks will do well in 2021?

Moore says ethical investors shouldn't be fixed in a mindset of good and bad companies.

"BP shot up after the vaccine news [and the prospect of life, and energy use, returning to normal], and stocks in oil, mining and airlines will recover – but they don't score well for ESG, do they?" he says.

"However, big companies like BP are trying to change – it partners with local authorities for their 'net zero carbon emissions' vision, for example."

Businesses such as BP are also big and financially strong enough to change and invest in new areas for the long term – charging points for electric vehicles, for example.

Not only that but companies in recovery will also probably change in order to overcome challenges.

For more on this investment trends theme, read our Guide to ethical investing.