Do you have a green thumb?

By Scott Gordon-Macey, CFP®, CHFC®, CLU®, CASL®, MBA

A question that often comes up, is what sustainable investing is and how can I start.

Sustainable investing, or Green Investing, is making the conscious decision to invest in stocks or mutual funds that support socially conscious companies. Sometimes this is referred to as ESG (Environmental, Social, and Governance) investing.  Often these limit the scope of industries and exclude certain sectors of our economy. An example would be stocks invested in alcohol, tobacco, and firearms.  In addition, these socially conscious funds, invest in new technology or industries that improve the quality of life in many ways:

  • Environmentally friendly production methods

  • Recycling of waste products to fertilizer

  • Recycling methods for clothing, cardboard, plastic, etc.

Environmentally friendly waste from consumer goods would be an example. Whether it is the manufacturing of clothing, or the dissemination of waste to enrich the earth, more people are looking for those options in their investing portfolio.  Locally one example is the Rich Earth Institute. They collect urine and recycle it to make fertilizers. This cuts down on waste, increases water supply, and recycles clothing, etc., so that less is thrown out in landfills.

In addition to the physical impact on the environment, sustainable investing also has a dramatic outside effect on those employees who work for a green company in their own life. The added benefit for the company is more brand loyalty, as well as profitability.

Some retirement programs offer some sustainable investments within their employee offerings. Outside of that, some mutual fund companies, as well as investment programs can tailor individual stocks to accomplish that same goal.

In my mind, the push for both electric vehicles as well as solar energy, are the two biggest examples of green investing. Recently we added electric heating units and solar to our home, both to reduce cost, but also to reduce dependence on propane and the power grid.

Should you want to review your options, I would suggest speaking with your financial professional.