The definition of a green investment fund?

Funds that refer to themselves as “green”, such as the Neptune Green Planet Fund, are usually focused on companies with a positive impact on the environment, some of their investment themes include Clean Energy, Energy Efficiency and Waste Disposal. They will actively invest in companies involved in their themes, similar to those in the Worldwise Environmental or Multi Thematic sections.

There are other types of funds that give themselves a “green” label. Some funds may describe their Ethical Screens as “green”, even if the environment does not play a large role. With these funds it is important to check the list of ethical screens, as a fund may define “green” differently to you. Kames Ethical has “dark green” ethical criteria which are supposedly of the stricter kind, including environment, tobacco and alcohol but the fund is allowed to invest in oil & gas.

“Green funds” as a term that’s used in the press and the public encompasses more than just the funds that self-identify as green. It is sometimes used to mean low carbon, such as the funds which avoid high carbon companies, or those that track carbon-weighted indices. It can also refer to Environmental and Multi-Thematic funds with themes that have a positive effect on the environment.

If you are looking for a fund which avoids certain industries, the Worldwise Investor Fund Library has an Ethical Screens search function to filter the funds. It is also worth noting that thematic funds without ethical screens may still avoid those industries if they do not fall under their fund’s investment themes. For a fund that actively invests in companies with environmental or social benefits, you need to look for one of our thematic funds.