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Video: What is climate-friendly investing?

We often talk about the climate-friendly investment options we offer at OneFamily.

Customers who open a Lifetime ISA or Stocks and Shares ISA with us have the option of investing all or up to 35% of their money in climate-friendly company shares. But as proud as we are of our climate-friendly funds, we never want to mislead our customers about the benefits of this type of investing.

So we've taken your questions to the team that decides how your money is invested: State Street Global Advisors (SSGA).

Customer Experience and Quality Assurance Manager, Helen Kimber, met with Altaf Kassam, an Investment Strategist at SSGA, to share with him some of the questions our customers tend to ask about climate-friendly investing.

Altaf explained how a SSGA algorithm selects which companies to avoid when choosing where to invest your money. He told Helen about how investment choices can contribute to tackling the climate emergency and addressed concerns that this type of investing could be less profitable.

Please note, the value of your investments can go down as well as up, so there is a chance that you could get back less than you've paid in. Neither OneFamily nor State Street Global Advisors is able to tell you what you should do with your money, if you're not sure please speak to someone who can advise you.

Let's talk about climate-friendly investing

Altaf Kassam is Head of Investment Strategy and Research for EMEA at State Street Global Advisors. He has almost 30 years' of investment experience.

Anything you weren't clear on?

Climate transition

Climate transition is the process of reducing the damage being done to the environment, generally by reducing the rate of global warming.

Many companies have “climate transition plans”, which show how they intend to reduce their carbon emissions and by when.


Altaf explains that companies produce “emissions”. In this context, he’s referring to carbon dioxide equivalent emissions, often written as CO2e. This is how much carbon a company releases into the atmosphere while going about its business.

These emissions contribute to global warming and climate change, so we want to limit them as much as possible.

Green revenue

Green revenue is money a company makes through activities that benefit the environment. For example, developing technology that reduces our need to use fossil fuels would be classed as a green activity.

Fossil fuel revenue/Fossil fuel reserves

Fossil fuel revenue, on the other hand, is money made using fossil fuels, for example burning fossil fuels in order to power production.

Fossil fuel reserves are the amount of fossil fuel that a company owns, even if these reserves are yet to be extracted.


When we talk about "risk" in investing, we mean the risk of your investment going down in value or not growing by as much as inflation.

It doesn't mean that you could end up owing money, but there is always a risk with investing that you could get back less than you've paid in.

Screening factors

These are simply reasons to not invest in a company. One of the examples Altaf gives of a screening factor is arctic drilling – SSGA doesn’t invest the money in a climate-friendly fund in companies that undertake drilling in the arctic.

Altaf mentions five screening factors, but SSGA use seven in total: controversial weapons, UN Global Compact violators, severe ESG controversies, Swedish Ethical Council, thermal coal, Arctic drilling and oil sands.

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At OneFamily, we believe everyone should have the same access to different ways to grow their money as everyone else.