How to Check if Your Investments Are Sustainable

8 Feb

Introduction: Why Checking Your Investments Matters

Many people in the UK have investments through workplace pensions, ISAs, or personal portfolios, but most aren’t sure where their money is actually going. Just because a fund or platform claims to be “ethical” or “ESG” doesn’t automatically mean it aligns with your values, some companies exaggerate their credentials, a practice known as greenwashing.

This guide will help beginners understand what to look for, check whether their investments are genuinely sustainable, and take practical steps to make their money support positive environmental and social outcomes, without getting overwhelmed.

Step 1: Start With Your Current Investments

Before buying new funds, it’s easier to look at what you already have. Most UK investors hold some combination of:

Workplace pensions
ISAs or personal savings accounts
Investment apps or robo-advisors

Check Your Pension or Savings Plan

Log in to your pension portal or bank account.
Look for fund names, fund statements, or portfolio summaries.
If details are unclear, call your provider, they are legally obliged to provide investment information.

Step 2: Understand Fund Names and Labels

Just because a fund says “ethical” or “green” doesn’t mean it’s fully sustainable. Labels can vary, and not all funds follow the same standards. Some things to check:

Fund type: ESG, SRI, ethical, green, or impact
Marketing claims vs. reality: Look for independent ESG ratings (Morningstar, MSCI, Sustainalytics)
Sector focus: Does the fund invest in fossil fuels, tobacco, or other excluded industries?

Step 3: Look at Top Holdings and Sectors

Most fund providers list their top 10–20 holdings. Examining these can reveal which industries your money supports:

Renewable energy, clean technology, or healthcare → generally positive
Fossil fuels, weapons, or tobacco → may conflict with ethical goals

Tip: Create a simple table to track this:

This visual approach can make it easier to see where your investments align with your values and where you might consider changes.

Step 4: Use ESG Ratings and Tools Properly

Independent ratings are invaluable for beginners. Tools such as Morningstar, MSCI, Sustainalytics, or platform dashboards provide ESG scores that summarize sustainability performance.

What to look for:

Overall ESG score (high = more sustainable)
Environmental vs. social vs. governance breakdown
Transparency of methodology

Scores vary between providers, so use multiple sources when possible.

Optional platforms for UK investors:

AJ Bell – ESG and SRI fund options
Hargreaves Lansdown – ethical funds and green ETFs
Vanguard – ESG-focused ETFs and index funds

Step 5: Spot Red Flags and Greenwashing

Even funds claiming to be sustainable can include companies that don’t match their marketing claims.

Red flags include:

Lack of transparency in reporting
Vague sustainability statements (“committed to ESG” without evidence)
Holdings in controversial sectors despite ethical branding

Cross-check fund claims with independent ESG scores or news coverage to verify their legitimacy.

Step 6: Decide on Next Steps

Once you understand your current investments:

Start small if making changes: Consider moving a portion of your portfolio to diversified ESG or green funds.
Track impact and performance: Use dashboards or portfolio tracking apps (Moneyhub, Yahoo Finance) to monitor progress.
Revisit regularly: Sustainable investing trends and fund holdings evolve over time — check your portfolio every 6–12 months.

Additional Tips for UK Beginners

Don’t panic if your portfolio isn’t fully ethical yet. Small adjustments accumulate over time.
Diversification matters. Even if focusing on sustainable funds, spread risk across multiple sectors.
Keep learning. Follow sustainable investing news via FT Sustainable Investing, Sustainable Investor, and ESG newsletters.

Conclusion

Checking whether your investments are truly sustainable is a crucial step for any UK investor. By reviewing fund holdings, using ESG ratings, and being aware of greenwashing, beginners can make informed choices and gradually align their portfolio with their values.

Even small steps, moving a portion of a pension into a diversified ESG fund, or tracking the sustainability of an ISA, help create meaningful impact over time.

Sustainable investing is a journey: start with your current portfolio, educate yourself, and refine your choices as your knowledge grows.

This article is for informational purposes only and does not constitute financial or investment advice.

George Willetts