Not many investment trusts have an ESG focus
But of the small selection that do some have performed well
Some of these offer exposure to assets you couldn't invest in directly such as renewable energy infrastructure
Appetite for investment products with strong environmental, social and governance (ESG) credentials has boomed this year as the pandemic has put the need for a sustainable world under the spotlight. Enthusiasm has been helped by sustainable funds broadly outperforming their conventional peers this year, partly because they tend to have less exposure to the oil price, and more to technology and healthcare stocks, which have largely performed well.
Investment trusts are often overlooked as a way to get exposure to sustainable investments, in part because there are many more open-ended funds that specifically market themselves as sustainable. Investment platform interactive investor runs a list of what it considers to be the best ethical investment funds – the ACE 40. But only three of the list are investment trusts – Impax Environmental Markets (IEM), Pacific Assets Trust (PAC) and Syncona (SYNC). interactive investor says that “the investment trust sector has been a bit slow off the mark to cater to a budding demand for ESG solutions”, but that ESG is a work in progress.