New app simplifies green investing by skipping ESG rating

A new free app launched on Tuesday is setting out to help retail investors quantify the carbon impact of their stocks without having to figure out ESG rating.

Sugi also compares the investments with industry benchmarks to help users build a greener portfolio in line with their values.

The app shows users the annual carbon impact of each investment in absolute numbers, alongside an industry average and carbon data for similar investments in the market.

The company said it distances from ESG ratings, which are typically complex and targeted at institutional investors and asset managers.

In fact, it offers impact data for 15,000 equities or 95% of the listed equities market, over 3,500 exchange traded funds (ETFs) and some actively managed funds.

The plan is to introduce a wider range of funds and more environmental data in the coming months.

Users can link their investment portfolios, which can include ISAs and SIPPs, to Sugi via Moneyhub’s Open Finance API.

Moneyhub is an Open Finance data, intelligence and payments platform that connects to more than 80 online investment platforms, covering most of the UK market. 

“While COVID has accelerated awareness and demand of green investing, it’s hard for retail investors to take action. Research shows that over 75% of UK investors want their investments to have a positive impact; however, only a small proportion of people actually follow through with it,” said founder and chief executive Josh Gregory.

“The reasons for this vary. Sustainable investing is full of jargon and investors are rightly concerned about greenwashing.”

“Another problem is ESG ratings: they’re meant to simplify complex issues but are themselves very confusing – even for experienced retail investors. All of this ultimately stops more people getting involved.”

“By providing users with simple, objective data, Sugi aims to make green investing easier, understandable and more accessible for everyone.”