When people hear the term “green investing”, they often dismiss everything that follows as “tree hugger stuff”. After all, investing is about making money and not being too concerned about the environmental impact companies have in making it. However, there has been a shift in both the board rooms of major corporations and the portfolios of investors, toward getting “greener”, only now they’re not talking about money.
Green investing is an investment strategy that focuses on companies and financial instruments, such as Equities, ETFs, and bond funds that have as the companies or projects of their underlying assets committed to conserving natural resources, producing and discovering alternative energy sources, implementing clean air and water projects. Many of these companies also engage in environmentally conscious business practices.
What makes an investment a “green investment” can vary among investors. Many investors strictly interpret green investing to mean companies that are pure-play options. These are companies that generate most if not all of their revenue and profit from green activities. This includes companies that perform research for or manufacture products such as renewable fuels and energy-saving technology.
Other companies that are considered “green investments” may have other lines of business, but make green-based initiatives or product lines a focus of their business. This is reflected in business practices that demonstrate a commitment to the environmentally responsible use of natural resources and managing waste to reduce their carbon footprint.
Still, other green investors may be comfortable investing in companies in a “Unigreen” industry that are recognized for their leadership in using environmentally conscious business practices. An example would be an oil company which, while burning fossil fuels, can also be using the environmentally sound practice to limit the direct damage their operations cause to the environment.
The issue of “going green” goes beyond global warming and climate change. Being a responsible steward of the environment is something that companies are realizing has economic advantages. Here are some of the top areas that are considered green investing opportunities.
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We have one of the best tools and experts for aggregating the ESG data. We evaluate the data from different sources such as company website, ESG, annual, proxy report, NGO/government website, and reports, news, social media, and company review. Data from these sources will go through a three-layered quality check which includes an analyst review followed by a supervisor review and a final approval by the sector expertise.
There are several different advantages of the green investments, providing the opportunity for the investors as well as for the company raising funds through these investments.
