ESG robo platform Clim8 closes - what to do with your money if you invest with it

Sustainability-centric investment app Clim8 has closed down, leaving investors with less than two months to pull portfolios from the shuttered service.

CEO and founder Duncan Grierson, the company said “dramatic changes in the economic environment and inflation” alongside shifts in venture capital appetites had led to the closure.

The platform launched in 2019 with the ambition of making ESG (environmental, social, governance) investing more accessible to everyday investors.

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Its key focus was to provide a pick of ready made ‘green’ portfolios managed by experienced fund managers. Similar to other robo advisers, users could choose ethical funds based on their risk appetite and attitude towards ethical investing.

Many green-minded investors had turned to the specialist platform after Clim8 promised products that genuinely targeted ESG ambitions. It claimed it did not greenwash, meaning users could trust that their investments were doing good for the environment and society. Clim8’s key focus areas included green energy, clean mobility, climate technology, clean water systems, and sustainable food.

“We have seen a large amount of greenwashing in financial services around so-called ‘ESG’ investing and we wanted to offer a better product,” Grierson said.

But trying to disrupt the existing retail investment industry was a ‘big mountain to climb’, he said.

Subsequently, the platform failed to secure further funding to grow the business. It had already acquired £12m, which included backing from Channel 4, but was unable to secure more.

Unless the company finds a buyer it is also likely that shareholders, some of which will have come through crowdfunding platform Crowdcube, will lose their money.

What should you do if you invest with Clim8?

The platform shut on 28 March to new customers. It will remain open to existing customers until 30 May to allow them to transfer to another provider or cash in their investments. You will have to contact Clim8 to arrange for the transfer.

Transfers may take up to 45 days for a regular ISA transfer or 12 weeks for a transfer without converting to cash.

The transfer process will be free.

Other robo-advisers such as Plum and Circa5000 have already started scouting for Clim8’s customers - though you can opt to transfer to any provider you like - take a look at our article on how to pick an investment platform.

Depending on where you are moving to, your new provider will try to match the funds you’re already invested in where possible.

Clim8 has partnered with Wealthify to offer customers a welcome bonus when moving their Clim8 portfolios to Wealthify’s ethical plan.

If you take your money out, beware that if your investments have dropped in value then you may be cashing in at a loss.

Clim8 has appointed WealthKernel to protect customers’ funds throughout the closure process.

WealthKernel is authorised and regulated by the FCA and is also a member of the Financial Services Compensation Scheme (FSCS) meaning customers’ money, up to the sum of £85,000, will be protected.

Kalpana Fitzpatrick, digital editor of MoneyWeek and author of Invest Now, said:

‘Robo-advisers do a great job in helping newbie investors get started with their easy to use approach. But, there are a number of new players coming to the market all the time and not all of them will survive, especially as their is a clear funding drought. Over the years, we’ve seen a number of these robo-platforms closing - for example, Exo Investing, Scalable and Moola.

“Others have successfully been acquired and continue to grow and lead the market. For example, Nutmeg was acquired by JP Morgan and the likes of Wealthify was snapped up by Aviva.

“So, will all robo-advisers survive this growing, yet crowded, market - i’d say not. The key thing is to make sure you only ever invest with a platform that is regulated and comes with FSCS protection and that way your cash is protected should your provider close.”