Climate change has been an issue at the forefront of Americans’ minds for decades. However, it’s only been recently that individual Americans are taking steps to combat it by using the power of their wallet. Just 100 companies are responsible for 71% of global greenhouse gas emissions. As such, the companies we invest in could have a huge impact on the future of our planet. This is why many Americans are turning to eco-investing.
Eco-investing, explained
Eco-investing, also called green investing, is a way for you to invest in companies that are environmentally friendly and sustainable. However, the exact definition can vary depending on who you talk to. Some say you can invest in any company that as eco-friendly policies and practices. Others argue that you should only invest in companies that provide eco-friendly products or services, such as solar panels.
Eco-investing vs. SRI vs. ESG
Eco-investing is often lumped together with socially responsible investing (SRI) or environmental, social, and governance (ESG) investing. While these types of investments are similar and can have similar motives, they are not the same thing. Let us explain:
Eco-Investing: Investing in companies that are eco-friendly and environmentally sustainable.
Socially Responsible Investing (SRI): Investing in companies that make a positive, sustainable social impact, such as those engaged in social justice, environmental sustainability, and more.
Environmental, Social, and Governance Investing (ESG): Investors consider how environmental, social, and governmental decisions and risks can impact the companies they invest in.
As you can see, there is some overlap, especially with eco-investing and SRI. Nevertheless, SRI investments contain a wider range of potential companies as it doesn’t just restrict to those focused on environmental sustainability. ESG, meanwhile, is more about making your own portfolio sustainable by looking at how governments, environments, and social issues can impact certain companies.
No matter how you wish you to invest, First State Investment Advisors is here to help. Contact us today at 918-492-1361 to have a qualified financial advisor help you build your investment portfolio.
This overview is for informational purposes only and is not a recommendation. It should not be the sole deciding factor in making an investment. Investing is a risk and, as with all risks, a positive return is not guaranteed. Past performance does not indicate future results.