Plastic-free living – could this influence how you invest?

05 August 2022

3 minute read

We discuss how to support protecting the environment using your investments.

The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek professional independent advice.

Please bear in mind that tax and pensions laws can change and that their effects on you will depend on your individual circumstances. We don’t offer personal advice.

Plastic Free July1 is an annual global movement that encourages people to reduce their plastic consumption for the whole month.

The initiative, run by the Plastic Free Foundation, aims to have a world that is free from harmful plastic waste.

Awareness is growing, and the movement has now gained traction from large corporations. Supermarkets in the UK have pledged to support it by going plastic-free by the end of 2023 in the case of the Iceland brand2 . Waitrose has committed to making sure all own-label packaging is widely recycled, reusable or home compostable by this date3.

It is hoped that many households strove to live with less plastic last month. But there’s more to be done to get households to make it stretch all year round so that it’s a way of life, rather than a one off.

The facts are compelling. Around a third (32%) of all plastic packaging produced finds its way to our oceans every year4.

Based on current rates of plastic entering waterways, by 2050 there could be more plastic than fish in the ocean which means all life depending upon the ocean5 will be consuming plastics.

Turn the tide

The theme for Plastic Free July this year was to “Turn the Tide6” and focuses on the huge impact collective action can have.

Making small changes can be simple – you can start by leaving as much plastic out of your shopping trolley as possible and considering the alternatives.

Investors might also consider turning the tide within their investment portfolios to support the drive for positive change for our planet.

There are businesses all over the world that are dedicated to the environment by developing cleaner energy, sustainable transport as well as reducing plastic waste.

Those who feel strongly about cutting out plastic – as well as wider environmental issues – can use their money to support such companies making inroads in reducing and recycling and finding other ways to protect our planet.

Investors can access these businesses through funds managed by professionals, rather than choosing individual stocks themselves.

Investing responsibly

Many fund managers have come to consider the effect their investments have on the environment – as well as society, and the governance structures companies have in place to make sure they’re achieving their investment goals in the right way.

This is known as ESG investing.

It’s not just about the planet, however. Under the “social” part of ESG, the focus is on a company’s treatment of staff and suppliers, and to what extent it upholds labour and human rights.

Governance relates to issues include ensuring fair leadership of the business, matters of executive pay and its stance on shareholder rights.

You might go a step further and look at impact investing. This is where managers of impact investing funds select companies based on the measurable positive impact they have on the world – often aligned to the UN Sustainable Development Goals – alongside a potential financial return.

Want to find out more?

ESG and impact funds are usually easy to spot with their names typically including ‘responsible’, ‘sustainable’, ‘impact’ or something more specific such as ‘environmental’. The fund factsheet will clarify more. Find out more about ESG investing or take a look at the ESG funds on our Funds List

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The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.

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