Earth Overshoot Day – the point at which humanity’s resource consumption exceeds the Earth’s capacity to regenerate those resources – is timely opportunity to review portfolios to consider how the investments are preparing for a more sustainable future.
This year, Earth Overshoot Day is being marked on 24 July and has been getting early each year since the 1970s. And, as Hargreaves Lansdown’s lead ESG analyst Dominic Rowles, points out, individual countries lie up and down the scale, with the UK, for example, passing the Day on 20 May,
Rowles says: “If the whole planet consumed resources at the same rate as we do here in the UK, overshoot would occur on 20 May. Qatar has the earliest overshoot day (6 February), while some countries, such as Egypt, don’t have an overshoot day. Egypt’s lower per-capita consumption and less resource-intensive economy keep its overall ecological footprint below the planet’s regeneration capacity. Earth Overshoot Day is a reminder of how unsustainable our consumption patterns are, and the strain it’s putting on Earth’s ecosystems.”
Portfolios investing in funds, should make sure the fund managers are considering the sustainability credentials of the companies they invest in.
Rowles highlights a fund and an investment trust which incorporate sustainability credentials within their analysis.
FP WHEB Sustainability Impact
“The team behind the FP WHEB Sustainability Impact fund invests in companies driving positive environmental and social change across nine key themes, ranging from resource efficiency and water management to sustainable transport and cleaner energy. Current investments include Ecolab, a company that provides cleaning products and services to restaurants, hotels, hospitals, and food and beverage producers. Ecolab has developed a range of solutions that reduce – and in some cases eliminate – water usage. Their products also improve energy efficiency and lower costs, all while delivering better performance compared to standard alternatives.
“The positive impact that each investment has is measured, so it’s possible to calculate the environmental and social benefits that your investment creates. For example, £20,000 invested into the fund throughout 2024 helped:
Generate 10 MWh of renewable energy
Avoid 14 tons of carbon dioxide emissions
Provide one person with improved healthcare treatment
Treat 900,000 litres of wastewater for reuse.”
Greencoat UK Wind
“If we are to successfully push back Earth Overshoot Day, significant investment in renewable energy will be required. Wind is currently the UK’s largest source of renewable energy. Most modern wind farms operate under a system which guarantees a fixed price for the electricity they generate. Greencoat UK Wind lets you invest directly into these wind farms and consistently ranks as one of the most popular responsible investment trusts among HL clients.
“Managed by the experienced team at Schroders Greencoat, the trust invests in 49 operating wind farms that produce enough clean energy to power 2.2 million homes per year. In 2024, the trust had approximately 6% market share of operating UK wind farms.
“Revenues depend primarily on the amount of electricity generated, which is influenced by wind conditions – a factor the trust cannot control. Future growth and investment opportunities also depend on the attractiveness of wind farm assets in general, as well as policy support. That said, the managers are encouraged by what they believe is an attractive pipeline of future investment opportunities.”
Main image: nicholas-doherty-pONBhDyOFoM-unsplash
