In response to the recent huge hike in bills I’ve decided to put together a green portfolio of shares/ETFs/ITs to help pay for my bills & help in the transition to Net Zero. It’s simple, quick and easy to replicate.
In many ways, energy has been what’s dragged humankind’s development forward. In the 18th and 19th century it was coal and the steam engine that made Britain a global power. It allowed the industrial revolution to happen from pumping water, pushing pistons to smelting iron & steel.
In the 20th century it was oil that allowed freed us with mass transportation shaping the modern world of suburbs and car travel, while gas gave us cleaner air and warmer homes. Oil, “black gold” also gave us a world of plastics, everything from rubber gloves to pharmaceutical drugs – without it our lives would be worse.
Now, well into the 21st century we need 21st century solutions. Ones that don’t lead to global warming, pollution and waste. And I believe that any investor who is aiming to be financially independent needs to have their money working in a sustainable manner – for without a sustainable economy and planet, nothing is independent. It’s simple but revolutionary and I’m not alone in thinking this way. In FT journalist Alice Ross’s Investing to Save the Planet, it informs you on how your money can make a difference and I’d like to share with you on how that can be done by you – a private investor. book
Each week I’ll post about an investment of £100 I’ve made in a company that has sustainable credentials. I’ll explain why the company gets my money and what they’ll do with it. The aim is for long term growth, income to pay my energy bills and putting my money to good use.
One of the great things about the democratisation of finance is that the barriers to buying shares is no longer £10+ as it was in the past. I use Trading212 for my individual trades and it’s so cheap to the point of being free. There’s no commission and trading is instant. You don’t need much to make a difference.
If investing in individual shares isn’t your thing, ETFs are a great alternative. I’ve recently started investing through Invest Engine in low cost ETF trackers. If you sign-up with this link we’ll both get £25 as a bonus if you invest £100. You can invest in an ISA or just a general investment account and there’s an option to go DIY or have a portfolio created for you. Costs are low and it works on mobile, app and desktop (for old foggies like me).
Jolly Green Portfolio Week 1: SSE
My first investment is in SSE – a multinational integrated energy company located in Perth, UK. I’ve had my eye on them for a while because they’ve been making a big shift away from coal and gas towards renewables with billion pound investments in offshore wind being announced recently.
Unlike companies like BP & Shell who are jumping on the wind bandwagon, SSE has a track record on developing windfarms both onshore and offshore.
They are also moving ahead with a massive 30GWh pumped storage hydro project (Coire Glas).
30GW about the UK’s average electricity consumption – so this supplies 1 hour of UK demand – impressive. Energy storage options like this is needed to move the grid to net zero – surplus wind energy can be used to pump water up and when required it is fed back through generators producing electricity when needed.
The shares trade around 1558p (12m range 1285p-1690p) with a dividend of 81p (5.2%). The share price has lower volatility and it’s a buy and hold type of share – with a decent dividend to pay the bills. The dividend was recently reduced to help pay for green investments – which is what I want my money to do anyway, so fine by me.
With the higher energy costs we are experiencing, investing in a producer is a good hedge. Importantly they sold off their retail arm to OVO Energy (smart move).
With Trading212 I bought 6 shares in my Invest account citing me just less than £100. Those 6 shares will pay £4.86 in dividends annually – not much but it all adds up. You can also hold an ISA if you like with them – the fees are very reasonable.
Active vs. Passive
To spice things up a bit, I’ve also put £100 into my Invest Engine account and invested in their lowest cost ESG tracker – Investco USA ESG Universal screened. Shares were £49.13 each and I bought 2 with some change left over. This ETF screens out non-ESG companies from American markets leaving behind greener companies. The TER is only 0.09% and I’ll use this as a benchmark for performance vs. my own selected shares.
It’s not exactly a like for like comparison, it’s only US focused and has a broader net than I’ll use with the likes of Microsoft, Apple, Amazon, Nvidia & Google making up their 5 largest holdings but it is a very low cost ETF and I can buy it easily. It’s also dipped a bit recently so I decided to buy in – because who doesn’t love buying the dips?
Jolly Green Portfolio Summary
So that’s share number 1. I’ll keep you posted on how it performs and what’s in the basket next week. Feel free to comment below – is there a better way to go about investing for net zero, I’d like to hear your opinions.
Next week I’ll invest another £100 in a different company – suggestions welcome!
This post contains referral links. With Trading212 we’ll both receive a share if you sign up with the link up to a value of £100. Invest Engine will give us both £25 if you invest at least £100. This is not investment advice, capital is at risk and DYOR.