Summer Statement: Sunak’s green investment package

Here's how the green investment package will play out as part of the green investing theme.

Whether Sunak’s green investment package is bold enough may well be a moot point. But interactive investor today focusses on how this will play out as part of the green investing theme.

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “The £3billion ‘green package’ aims to cater to growing calls for economic recovery plans from the Covid-19 pandemic that are not at the expense of the planet, but whether the measures announced are an adequate first step to ‘build back greener’ and help achieve the Government’s broader target to cut greenhouse gas emissions to net zero by 2050 is open for debate. 

“From an investment standpoint, the creation of thousands of green jobs, along with the wider £5 billion of infrastructure spending package, will strengthen the foundations of the construction stocks - many of which saw work grind to a halt because of lockdown guidance as well as disruptions in supply chains resulting in problems sourcing the required materials.

“But these stocks aren’t out of the woods yet. Depressed office and retail occupancy rates could be an anchor to growth prospects despite the recent uptick in UK construction activity in June, and it is arguably property developers that are likely to be the net beneficiaries. 

“Aside from property, it is funds and trusts with exposure to the low carbon economy that are likely to benefit.

“We like the Royal London Sustainable Leaders Fund which is on our ACE 30 rated list of ethical funds and investment trusts. The high conviction UK focussed fund invests in stocks deemed to deliver a net benefit to society, in terms of the products and services they provide or that show leadership in environmental, social, and governance management. The low carbon economy is one of its themes.

“We also like VT Gravis Clean Energy Income (also on the ACE 30 rated list) which is a diversified portfolio of global listed securities of companies involved in the operation, funding, construction, generation and supply of clean energy, but has a big chunk of its assets in the UK.”