3 UK shares to avoid

first_img Access this special “Green Industrial Revolution” presentation now Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address Our 5 Top Shares for the New “Green Industrial Revolution” Rupert Hargreaves | Saturday, 19th June, 2021 | More on: CCL HBR TGA I believe that over the next few decades, the UK shares with the leading Environmental, Social and Governance (ESG) credentials could be some of the best investments.Moreover, I reckon companies with low ESG ratings will suffer as investors become more informed about corporate responsibility and the costs of polluting increase. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…And with that being the case, I’d avoid UK shares with poor ESG ratings. Here are three companies I’d steer clear of for that reason. UK shares to avoid The first to avoid for ESG reasons is Thungela Resources (LSE: TGA). The firm was recently spun off from its former parent Anglo American, which was looking to tidy up its portfolio of mining assets.The group owns interests in and produces thermal coal predominantly from seven collieries located in Mpumalanga, South Africa.Not only is coal one of the dirtiest power sources around, but the mining industry in South Africa has attracted criticism in the past for poor working conditions. As such, I believe the company has terrible ESG credentials and would avoid the stock as a result. However, to its credit, the firm says it’s committed to advancing its ESG factors. To that end, it’s established an employee partnership and community partnership plan. And, of course, the demand for coal around the world is still high. This could mean the corporation’s outlook isn’t as bad as it first appears. High costsThe other company I’d avoid is North Sea oil and gas producer Harbour Energy (LSE: HBR). The North Sea is one of the most expensive places to produce oil and gas in the world. This means companies like Harbour are at a disadvantage. At the same time, the group has a large amount of debt on its balance sheet. According to the company’s own figures, free cash flow breakeven will be $30-$35 per barrel, and net debt is around $2.9bn. By comparison, some producers in the Middle East can extract oil for less than $7 a barrel. I think these figures put Harbour at a disadvantage and, as the world moves away from oil and gas, it could begin to struggle. That said, if oil prices remain elevated, the company could generate enough cash flow over the next few years to reduce its debt. This would put it in a strong financial position enabling it to invest for the future. Despite this, I’d still avoid the company considering its ESG risks. Disrupted business model Carnival (LSE: CCL) is the world’s largest cruise company. Unfortunately, the cruise industry is notorious for poor working practices and pollution. As such, I think the business has some of the worst ESG credentials of all UK shares. Further, the pandemic has decimated the group’s balance sheet, and it could take years to recover. These are the primary reasons why I’d avoid the stock today. However, there are some green shoots of recovery on the horizon. The company has resumed some sailings around the world, and consumers have been happy to book trips. Carnival is also making progress in reducing its emissions. Despite these brighter spots,  I’d avoid the enterprise as I think the risks facing the business will far outweigh the opportunities over the next five to 10 years.  It was released in November 2020, and make no mistake:It’s happening.The UK Government’s 10-point plan for a new “Green Industrial Revolution.”PriceWaterhouse Coopers believes this trend will cost £400billion……That’s just here in Britain over the next 10 years.Worldwide, the Green Industrial Revolution could be worth TRILLIONS.It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. 3 UK shares to avoid Image: Carnival Our 6 ‘Best Buys Now’ Shares See all posts by Rupert Hargreaveslast_img read more