How to Invest in Green Technology
As the world continues to deal with climate change, green and sustainable technology is becoming more important than ever before.
Electric cars, wind and solar power are now mainstream. In fact, the PwC Climate Tech report shows that investments in decarbonization reached $87.5 billion in July 2021. As Earth Day is April 22, 2023, this month’s WIL blog post discusses how you can participate in sustainable investing.
What is Social Responsible Investing (SRI)?
SRI is an investment approach that considers environmental, social, and governance (ESG) factors in addition to financial factors when selecting investments. This approach seeks to generate long-term financial returns while making a positive impact on society and the environment.
Investing in sustainable companies can take many forms including investing in companies with high ESG ratings, divesting from companies that have negative environment impacts, investing in funds that focus on sustainable investments, and engaging with companies to encourage them to improve their ESG performance.
Overall, sustainable investing has gained popularity in recent years as more investors have become concerned about the impact of their investments on the world and seek to align their values with their investment choices.
How Companies are Becoming More Green
Many companies around the world see that they have a part to play in sustainability. Here are a few examples pf how some companies are changing how they do business:
1- Google introduced the eco-routing feature for Google Maps and claims that including this navigation mode which indicates the most fuel efficient route to a destination has reduced greenhouse gas emissions by more than 500k metric tons. Google is also leveraging its technology to help businesses and cities to determine their carbon impact.
2- Apple is working towards a 2030 carbon neutral goal – via its “Power for Impact” initiative which encourages its suppliers to use clean energy and looks to bring clean energy solutions to communities around the world.
3- Intel has committed to have net-zero greenhouse gas emissions in its operations by 2040. The company is also working towards zero waste to landfills and 100% renewable electricity.
4 Ways You Can Invest In Green Technology
1- Directly invest in green tech companies: One way to invest in green technology is to invest directly in companies that develop and produce sustainable technologies, such as solar, wind, and hydropower. You can research companies that are focused on green technology and invest in them through a brokerage account or an investment platform.
2- Invest in green tech funds: Another option is to invest in funds that focus specifically on green technology. These funds invest in a portfolio of companies that are involved in developing and producing green technologies. Examples of green tech funds include the iShares Global Clean Energy ETF and the First Trust NASDAQ Clean Edge Green Energy Index fund.
3- Use robo-advisors: Robo-advisors are online investment platforms (usually found at your bank) that use algorithms to build and manage a diversified investment portfolio. Many robo-advisors offer sustainable and socially responsible investment options, including green technology.
4- Participate in crowdfunding: Crowdfunding platforms like Kickstarter often offer opportunities to invest in green technology startups. These platforms allow investors to contribute to the development of innovative green technologies, often in exchange for equity in the company.
The Bottom Line
Sustainable investing means different things to different people – so there’s no one-size fits all approach. Some people will avoid investing in certain industries, while other may take a more proactive approach and invest in companies that are working to make a positive change. If you choose to embark on investing in sustainable/green tech be sure to consider your investment goals and risk tolerance before investing. Additionally, reach out to your financial planner and ask questions so that you can make an informed decision.
The information provided in this month’s post is NOT investment, tax or financial advice. It's important to do your thorough research and consult with a licensed financial advisor before making any investment decisions.