Buying and investing green

“Whatever you feed grows. What you starve dies.” This phrase is true in most contexts and sustainability is no exception.

For the past decades, consumers have become more aware of the impact of corporations on the planet and are using their purchasing power to drive sustainability. A survey by First Insight reveals that 62% of Gen Zs and millennials prefer to buy from sustainable brands; the younger generations are also willing to pay more for sustainable products. This consumption trend pressures companies to reconsider their impact on the environment. Today, several corporations across all sectors and regions have set sustainability goals, typically carbon neutrality.

This shows how powerful our collective behavior can be at influencing large companies. Aside from buying green, you can support eco-friendly companies by investing green. When investing, you should consider a company mission, sustainability, and ethical practices in addition to your fundamental analysis of its stock. Otherwise, you might be indirectly encouraging pollution or even human right violations. The Motley Fool has compiled a list of renewable energy stocks with high returns for both your portfolio and the environment. There are profitable stocks (e.g. BALL, LCID) from non-energy firms that are both environmentally and socially responsible.

If you want to diversify your portfolio, you can consider investing in socially responsible index funds. Some of the most popular are the Vanguard ESG U.S. Stock ETF (ESGV) and the Fidelity® US Sustainability Index Fund (FITLX). Over the past 5 years, FITLX (up 76.33%) has even been more profitable than the S&P 500 (up 64.59%). Given that consumers are increasingly spending on eco-friendly products and services, it is no surprise that eco-friendly index funds are thriving. By investing in such funds and stocks, and buying from eco-friendly companies, you are contributing to growing the sustainability movement!

Written by Kelly Jean ’22

Photo by Wance Paleri on Unsplash