In an era of increasing environmental and social awareness, sustainable investing has emerged as a powerful strategy for aligning financial goals with positive impact. By directing investments towards companies that prioritize environmental, social, and governance (ESG) factors, individuals can support businesses that are actively working towards a more sustainable future. In this blog post, we will explore the concepts of sustainable investments and present the top 5 sustainable financial investments that people can consider today.
Renewable Energy
Renewable energy is energy that comes from sources that are naturally replenished, such as sunlight, wind, rain, tides, and geothermal heat. Renewable energy is a sustainable source of energy, meaning that it will not run out and will not produce greenhouse gases, which contribute to climate change. Investing in renewable energy companies is an effective way to support the transition to clean and sustainable energy sources. These companies focus on generating energy from renewable sources like solar, wind, geothermal, or hydro power, reducing reliance on fossil fuels. By investing in renewable energy, individuals can contribute to mitigating climate change while potentially earning returns from a growing industry.
According to Nerdwallet.com, the best energy stocks are the ones that work best for your individual portfolio, but here are a few to keep an eye on:
- Brookfield Renewable Partners L.P. (BEP)
- Algonquin Power & Utilities Corp. (AQN)
- NextEra Energy Partners, LP (NEP)
- Clearway Energy Inc. (CWEN)
- Atlantica Sustainable Infrastructure PLC (AY)
- Ormat Technologies, Inc. (ORA)
Sustainable Agriculture
Sustainable agriculture is the practice of farming that sustains the resources used, such as soil, water, and air, and that helps to protect the environment. It is a way of farming that can be continued indefinitely without harming the environment or the people who depend on it. Investing in sustainable agriculture involves supporting companies that prioritize organic farming practices, reduce chemical inputs, and promote biodiversity. These companies strive to minimize the environmental impact of agriculture while ensuring the production of nutritious and safe food. Sustainable agriculture investments can include buying from organic food producers, implementing regenerative farming practices, and investing in companies focused on reducing food waste.
While there are many organic food producers in the world, here are a few of the largest and most well-known:
- Whole Foods Market: Whole Foods Market is a major retailer of organic and natural foods. The company has over 500 stores in the United States, Canada, and the United Kingdom. Whole Foods Market sells a wide variety of organic food products, including produce, meat, dairy, and packaged foods.
- Earthbound Farm: Earthbound Farm is a leading producer of organic produce. The company was founded in 1984 and has over 1,000 employees. Earthbound Farm products are sold in grocery stores across the United States.
- Organic Valley: Organic Valley is a farmer-owned cooperative that produces organic dairy products, meat, produce, and other foods. The company has over 1,800 member farms in the United States and Canada.
Clean Technology
Clean technology is any process, product, or service that reduces or eliminates pollution and/or environmental impacts. Clean technology investments target companies that develop innovative solutions to environmental challenges. These companies work towards creating cleaner and more efficient technologies in areas such as energy storage, waste management, water conservation, and transportation. Investing in clean technology can not only drive positive environmental change but also provide opportunities for growth and financial returns.
Some ideas that come to mind are:
- Renting hybrid/electric vehicles to others on apps like turo.
- Partake in water conserving habits at home which can include, taking shorter showers, installing low-flow appliances, and using a rain barrel for outdoor usage.
- Using energy efficient smart-appliances.
- Installing solar panels.
Socially Responsible Investing (SRI) Funds
SRI funds are investment vehicles that integrate ESG criteria into their investment decisions. ESG funds are investments that are graded using ESG (environmental, social and governance) principles. ESG funds invest in companies that aim to have a sustainable and societal impact in the world, such as those with a small carbon footprint or diverse leadership boards. By investing in SRI funds, individuals can diversify their portfolios while supporting businesses that prioritize sustainability and responsible business practices. Recently, Forbes released an article listing the Best ESG Funds Of 2023 for anyone looking to add more sustainability to their portfolios.
Impact Investing
Impact investing focuses on generating positive social and environmental impacts alongside financial returns. It involves investing in companies, organizations, or funds with the explicit goal of creating measurable positive change in areas such as poverty alleviation, healthcare, education, and sustainable development. Impact investments provide individuals with the opportunity to make a difference while potentially earning competitive returns. The number one option that comes to mind is to essentially align yourself with grassroots efforts and organizations that are operating to build, grow, or maintain sustainable goals. Propublica offers a decent non-profit explorer if you want to research the credibility of a non-profit/grassroots organization.
Sustainable investing offers individuals the chance to align their financial goals with their values, making a positive impact on the planet and society. The top 5 sustainable investments mentioned in this blog post—renewable energy, sustainable agriculture, clean technology, SRI funds, and impact investing—provide opportunities for both financial growth and contributing to a more sustainable future.
By engaging in sustainable investing, individuals can support companies that prioritize ESG factors and work towards addressing pressing global challenges. It is important to conduct thorough research, consult with financial professionals, and consider your own investment objectives and risk tolerance when making investment decisions.
Remember, sustainable investing is not only about generating financial returns but also about promoting positive change and creating a more sustainable world for future generations. Start exploring sustainable investment opportunities today and become a part of the global movement towards a more equitable and environmentally friendly economy.