Having just released its first ever performance data publicly (with its ‘Adventurous’ portfolio achieving 25.2% returns over 12 months) demonstrating the fast-growing appetite for services that deliver both financial performance and positive climate action, Clim8 wants to empower consumers to invest in tangible solutions to climate change, rather than a ‘greenwashed’ ethical/sustainable fund - there's been an avalanche of new ESG/green funds targeting consumers, but InfluencerMap research found that 55% of these exaggerated their environmental claims.

Duncan Grierson, CEO & Founder, Clim8 said: “Mitigating and adapting to the climate crisis requires us all to act immediately. However, with so many tips out there - especially in the run-up to COP26 - it can be difficult for people to know where to start and what actions will make a meaningful difference. While we can make lifestyle alterations such as shopping green and driving less, there is another even more impactful way to drive change: by investing in solutions to climate change.

“Crucially, having a positive climate impact doesn’t mean compromising your returns. In fact, taking climate action can improve your financial wellbeing. Portfolios made up of companies and funds tackling climate change are experiencing high growth and this will only continue as governments and the private sector begin to decarbonise and set strict climate targets.

“Being aware of ‘greenwashing’ as you begin your sustainable investing journey is vital. There are hundreds of ‘green’ and ‘ESG’ funds out there, but many have come under scrutiny recently for exaggerating environmental claims. If you want to make a real difference on tackling climate change, look for specialist climate impact investing platforms and apps.”

How you can begin investing more sustainably

1. Understand your values

Eliminating the negatives and finding the positives is a key first step. Begin by asking yourself what you don’t want to invest in. What doesn’t align with your values - oil and gas, airlines, tobacco and arms? You can then think more clearly about your values. What do you care about and wish to impact – social equality, clean water, recycling? Define where you most want your investments to make an impact and make a list to help you narrow down your choices.

2. Identify sustainable funds

Sustainability-focused funds are fairly easy to identify. Look out for titles that include words such as ‘clean’, ‘green’ or ‘sustainable’ initially. But be aware that name is just a starting point and you should always do your research.

Funds that have been on the market for a while will have a track record of their past performance. Some may have been rebranded as a ‘green’ fund, so digging may be required to verify what activity has happened. Remember that this doesn’t necessarily mean they are misleading or ‘greenwashing’: ‘negative impact’ assets may have been sold off and replaced with ‘greener’ ones. Ask the fund management team or asset provider if the information is not available on their website.

3. Be wary of ‘greenwashing’ + misleading metrics

With everyone trying to jump on the ESG bandwagon and insufficient regulations yet in place, ‘greenwashing’, in our view, can seem rife. Misleading claims may encourage investors with good intentions to put their money into funds that do not actually benefit our planet.

Look out for misleading metrics. It’s one thing saying a fund is aligned to some Paris Agreement metric but how does the fund manager report its impact and adherence to those goals? Ultimately, you want to know what impact your money is having. A good place to start is sticking to known measurable targets such as levels of carbon emissions. Expect to see those appear clearly in an impact report on any ESG provider’s website.

4. Returns with impact

Investing sustainably does not necessarily mean accepting lower returns. Look for information on a provider’s website that will show you both financial and impact performance over longer periods of time. Always bear in mind that past performance is not a reliable indicator of future results.

There are good ethical and sustainable investing apps available that have been designed to help you make financial gains while also investing in solutions to climate change. With Clim8, for example, users can open a Stocks & Shares ISA or a General Investment Account, with actively managed portfolios which are invested in 400+ companies and funds across clean energy, clean technology, smart mobility, clean water, the circular economy and sustainable food