Impact investing: doing well by doing good

Sustainability will become the watchword for businesses. Professional investors Rupert Welchman and Victoria Leggett reveal where investors should put their money.

Two professional investors tell us where they'd put their money. Rupert Welchman and Victoria Leggett of Union Bancaire Prive choose three beneficiaries of the trend towards sustainable growth.

Victoria-Leggett-80x110

Impact investing is now gaining real traction among listed firms. There are many exciting stocks providing exposure to different themes within the positive impact space. We shall focus on the areas of supply chains, consumer choice and fast fashion.

Keeping consumers safe

Intertek (LSE: ITRK) is one of the world's leading testing and certification companies. This sector is responsible for approving the safety of everything we, as consumers, come into contact with during our daily lives.

Intertek offers a service called Total Quality Assurance, which allows a firm to identify and monitor all the elements within its value chain, from early-stage product design through to the final sale. Consumers are ditching brands that get shamed for falling short of acceptable standards, so companies are becoming more conscious of the importance of the kind of positive impact made by Intertek.

Fast fashion

The fashion industry has often been characterised by its short attention span, constantly reinterpreting what is hot and what is not. The rise of social media, where trends come and go very quickly, has cemented this characteristic. Consumers have come to expect faster and faster fashion, and nimble retailers have taken advantage, shortening their time to market and changing their clothing ranges more rapidly.

Making clothes last longer and cutting down on the destruction of unsold goods are two of the most obvious ways that sustainability could be improved in this context. Aquafil (Milan: ECNL) has been highly vocal in the promotion of its infinitely renewable Econyl solution a nylon thread made from recycled carpets and the ghost fishing nets that plague our oceans. With the likes of Stella McCartney and Adidas backing Aquafil, the outlook for growth is auspicious.

World's top cork producer

Consumer choice will be increasingly influenced by the theme of sustainable living. One area where consumers can make a difference is by choosing sustainable materials over synthetic ones. Often the choice will be simple buying wood-based products from well-managed sources, for instance. Corticeira Amorim (Lisbon: COR) is the world's leading producer of cork products.

Cork is usually associated with bottle stoppers but it can also be used as an alternative material for products ranging from insulation blocks to surfboards. Cork has a negative carbon footprint thanks to the many harvests a single tree can produce in its 200-year life. Negative carbon-emitting products will become increasingly high profile in the fight to limit global temperature rises. Corticeira Amorim is well positioned to invest in this challenge.

Recommended

Eternal growth: how to invest in the future of the drinks industry
Share tips

Eternal growth: how to invest in the future of the drinks industry

Humans have been dabbling in tasty beverages for millennia. Jonathan Compton assesses the key trends in the sector and recommends seven hard- and soft…
22 Jan 2021
Share tips of the week
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Jan 2021
DoorDash won't deliver for investors. Here's how to short it
Trading

DoorDash won't deliver for investors. Here's how to short it

American food-delivery app DoorDash can’t even make money in a pandemic. Matthew Partridge explains the best way to short it.
20 Jan 2021
The best investment trusts to buy for 2021
Investment trusts

The best investment trusts to buy for 2021

Sectors ranging from emerging markets to student accommodation look poised to do well this year, says David Stevenson, as he picks the best investment…
19 Jan 2021

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
The world’s fund managers are getting very bullish – be careful out there
Stockmarkets

The world’s fund managers are getting very bullish – be careful out there

The latest survey of fund managers shows them to be extremely bullish on all the same things. And that, says John Stepek, means the market is in dange…
21 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021