Climate Investing: 3 Paths for a Greener Future
Climate change is happening.
And carbon dioxide produced by human activities is the largest contributor*
That’s why many investors are looking for ways to invest in companies working towards a more sustainable future.
In this post we will go into 3 ways that you can invest for a greener future.
Quick Summary
- Investing in climate solutions typically aims to reduce carbon emissions, promote clean energy, and implement sustainable practices.
- Environmental ETFs are like a basket of stocks, providing investors exposure to a diversified portfolio of companies working towards a sustainable future.
- Green Bonds are debt instruments issued to finance environmentally beneficial projects
What is Climate investing?
Climate investing refers to the practice of investing in companies, funds, or assets that are focused on mitigating or adapting to climate change.
The goal of climate investing is to support businesses and projects that are working towards reducing carbon emissions, promoting clean energy, and implementing sustainable practices.
Climate investing can take various forms, including investing in renewable climate-friendly stocks, environmental ETFs, green bonds and more.
It’s an area that has become more popular as investors recognize the impact of supporting sustainable companies and initiatives. By investing in climate solutions, investors can potentially generate returns while also contributing to a healthier planet for future generations.
Climate-friendly stocks
Climate-friendly stocks are shares of companies that are promoting environmental and social characteristics. Many of them are directly involved in businesses that aim to combat climate change or reduce carbon emissions.
These companies may be involved in developing clean energy technologies, providing energy efficiency solutions, or implementing sustainable practices.
This provides investors with an opportunity to invest in companies that are working towards a more sustainable future, while potentially generating returns for their portfolios.
Environmental ETFs
Investing in environment ETFs is like investing in a basket of climate-related stocks.
They are designed to provide investors with exposure to a diversified portfolio of companies that are working towards reducing carbon emissions and transitioning towards a more sustainable energy future.
Environment ETFs typically provide exposure to companies offering products and services that:
✔️Enable Greenhouse Gas Reduction
✔️Improves energy efficiency
✔️Develop innovative solutions to environmental challenges
✔️Pursue opportunities arising from the transition to lower carbon economy
✔️Involved in clean energy including renewable sources such as solar, wind and geothermal power
It should be noted however that not all environmental ETFs are going to directly be involved in climate solutions.
They will be promoting environmental characteristics to qualify as such, but if you want to invest specifically in those that have sustainable investment as an objective then you should look for ETFs that are categorised as SFDR article 9 funds.
Green Bonds
Green Bonds are debt instruments that are issued to finance environmentally beneficial projects such as renewable energy, energy efficiency, and sustainable waste management.
Examples of projects financed by green bond issuance include: renewable energy, clean transportation and climate change adoption.
They are just one type of fixed income ETF, which provides a regular, fixed payment to the investor in exchange for the use of their money over a set period of time.
Environmental ETFs with GOODFOLIO
Investing in environment ETFs can be an effective way to support a positive environmental impact while potentially generating returns for investors.
GOODFOLIO is a sustainable investing platform that enables you to invest in environmental ETFs, whilst keeping track of your financial returns as well as your impact on the world.
We also offer funds in a range of themes; environmental, water, healthcare, smart cities and many more.
Here’s what you can expect:
1. Fast sign up - typically onboard in less than 10 minutes
2. Themes - funds are categorised by sustainability themes
3. Screened ETFs - funds are screened to meet our transparency and sustainability information standards
4. Impact reporting - up to date reports including UN SDG revenue alignment
5. Cutting edge tools - ETF comparison tools based on impact, risk and returns
6. Sustainable ISA - create a new ISA or transfer your existing one with our help
7. Great customer support - we are always here to help!
Join the future of investing and start your free GOODFOLIO account today!
As with all investing, your capital is at risk.
Source: European Commission
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As with all investing, your capital is at risk.
GOODFOLIO Ltd is an appointed representative of RiskSave Technologies Ltd which is authorised and regulated by the Financial Conduct Authority (FRN: 775330).
GOODFOLIO Ltd is an appointed representative of RiskSave Technologies Ltd which is authorised and regulated by the Financial Conduct Authority (FRN: 775330).
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The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by us or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity.
There are risks associated with investing in securities. Investing in exchange traded funds, involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.
There are risks associated with investing in securities. Investing in exchange traded funds, involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.
