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Ethical Fund ISAs

Invest in line with your principles

Ethical fund ISAs allow you to invest in companies that operate in line with your principles and values.

Ethical ISAs

Sustainable Leaders

from Royal London

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: companies that are likely to benefit from measures taken to improve the environment, human welfare and quality of life.
  • Invest From: £25 a month or any lump sum
  • Investment Options: The core of the investment portfolio consists of shares in companies involved wholly or in part in the manufacture of products, industrial processes or the provision of services associated with improving the environment and the enhancement of human health and safety.

Why we like it: A consistent performer this popular £1.7bn fund run by triple A Citywire rated fund manager Mike Fox works on a “best ideas” basis with 40 to 50 company holdings . The fund applies both negative and positive screening. Sectors considered more favourably include healthcare and technology, whereas areas such as commodities are generally avoided. There is also a focus on long-term themes and trends such as infrastructure and changing demographics. The fund has reasonable ongoing charges of 0.76% pa for an actively managed fund.

This fund is available via: Interactive Investor investment platform »

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Global Clean Energy ETF

from iShares

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: The ETF seeks to track the performance of an index composed of 30 of the largest global companies involved in the clean energy sector.
  • Invest From: £25 a month or any lump sum
  • Investment Options: The Share Class is a share class of a Fund which aims to achieve a return on your investment, through a combination of capital growth and income on the Fund’s assets, which reflects the return of the S&P Global Clean Energy Index, the Fund’s benchmark index (Index).

Good to know: A member of the Interactive Investor ACE 40 ,this fund is passively managed by BlackRock and reflects the return of the S&P Global Clean Energy Index (the benchmark). The Index is designed to provide exposure to the leading publicily listed companies in the global clean energy business from both developed and emerging markets.   The fund has reasonable ongoing charge of 0.65% pa. 

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

ii ACE 40 investments

from Interactive Investor

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: 140+ Ethical Investments
  • Invest From: £25 a month or any lump sum
  • Investment Options: A selection of 140+ funds, investment trusts and ETFs that they believe offer high-quality ethical investment choices, across a broad variety of markets.

Why we like it: The UK's first rated list of ethical investments to help you align investments with your personal values. Building your investment portfolio can be tough – and it is even more difficult when you want to choose ethical investments. That can mean a lot of research. The ii ACE 40 makes the job easier for you. Interactive Investor select 40 funds, investment trusts and ETFs from over 140 that they believe offer high-quality choices, across a broad variety of markets.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

What is an Ethical Fund ISA?

Ethical fund ISAs invest only in companies that are considered to meet a certain standard of social or environmental responsibility. What constitutes 'ethical' varies from investor to investor depending on their personal values - for example, some people may feel that investing in the alcohol industry is unethical, while others may not. Therefore, it's vital to discuss your priorities with your ethical fund ISA manager before investing.

Benefits of investing in ethical funds…

  • By using your ISA allowance to invest in ethical funds, you can be sure that your money only goes towards causes that tie in with your personal values and morals.
  • From a purely practical point of view, companies which have a good ethics track record are less likely to become embroiled in regulatory disputes, court cases and public boycotts - all of which can have a negative effect on share prices. Therefore, your investments may benefit from better long-term prospects - especially as consumers become more ethically aware.
  • An ethical fund ISA allows you to diversify your investment portfolio into new, sustainable markets.
  • By using your ISA allowance to invest in ethical funds, you can reap the returns tax-efficiently, with the extra reassurance that your money is being used in ways that tie in with your principles.

How do I go about investing in an ethical fund?

It can be tricky for individual investors to judge whether a particular company is operating ethically or not, so most ethical investments are made via a fund manager. An ethical fund manager will thoroughly research potential investment targets, ensuring that they meet certain criteria. Often, ethical fund managers will assess companies on both positive criteria (i.e. activities they engage in that are actively ethical) and negative criteria (i.e. activities they engage in that are actively unethical).

Positive criteria might include:

  • Does the company have specific environmental protection guidelines and practices?
  • Is the company taking steps to reduce its environmental impact?
  • Does the company ensure the health and safety of all its workers?
  • Does the company have a recycling policy?
  • Does the company have measures in place to prevent child labour in its factories?
  • Does the company pay its workers a fair wage?

Negative criteria might include:

  • Is the company involved in the production of weapons?
  • Does the company have any ties to animal testing facilities?
  • Does the company have any ties with countries that have oppressive regimes or those that have a poor human rights record?
  • Is the company involved in industries that might be considered harmful or damaging to those involved in them, such as gambling or pornography?
  • Does the company promote harmful products (e.g. tobacco), or promote products in a socially irresponsible way (e.g. infant formula in developing nations)?
  • Are the company's manufacturing processes or waste disposal methods harmful to the environment?

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

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Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

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