So often on The Action Blog we talk about problems – Global Warming, Fair Trade Issues, Energy Consumption, my inability to find a good bagel shop in LA (okay, maybe we don’t talk about that…but we should).
It’s time we also discuss solutions – actions you and I can undertake to affect a positive environmental change. One such action is Green Investing, which is the act of investing in firms that help support the environment through their products and/or practices.
Green investing can take many forms. On a micro level, it can be as simple as buying food that’s grown locally. Think about it…there’s no need to transport your vegetables half way across the country, burning fuel the whole trip. Buy locally grown produce and you essentially put your money to work in support of stores that grow that produce – and limit greenhouse gas production.
On a macro level, you could consider buying the stock of firms working on solving renewable energy issues through the use of solar, wind or hydro technology. Or perhaps look at firms engaged in the production of biofuels, such as the use of corn in energy production.
But maybe you’re not interested in studying companies. It can be hard to determine, on your own, where to invest. In that case, you can look at “green funds”. Essentially green funds invest in green companies.
Here are three such funds I found on Wikipedia:
• PowerShares WilderHill Clean Energy Portfolio ETF (PBW) invests in approximately 50 companies that focus on green and often renewable energy sources and technologies that facilitate cleaner energy.
• Winslow Green Growth Fund (WGGFX) invests primarily in environmentally sustainable companies with clean business practices, or companies who provide solutions to environmental problems. This fund focuses on clean energy, water management, green transportation, and green building.
• Van Eck Market Vectors Global Alternative Energy EFT (GEX) invests in companies involved with solar power, bio energy, wind power, hydro power and geothermal energy.
So are green funds a good investment? Numerous studies have shown that such firms often have returns greater than that of their non-green counterparts. And, as people demand regulations that protect our environment, firms that are considered green today will be far ahead of those that attempt to go green tomorrow.
To be honest, I’m not an investment guru. I barely got through my finance class in business school (Yes…I engaged the Darks Side with an MBA, but I’m doing my penance now). So my goal with this piece is not to tell you where to invest. Just to put forth options – ways you can leverage your money to help make this world a better place.
Have ideas about green investing? Share…comment below.
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