One of the approaches that you can take to impact investing, especially if the environment is something you’re passionate about, is green stocks. Green stocks aren’t much different from other kinds of stocks: when you buy a share of a stock, you gain ownership in the company you’re investing in and can sell the stock based on market values. The difference comes in the form of what kinds of companies you invest in and what they do.
The Meaning of Green
So, what does “green” mean when it comes to stocks? While there’s no consistent definition of the word, it’s generally agreed that green stocks are stocks from companies that are involved in improving the environment in some way. These improvements can be direct or indirect, involve research into or development of new technologies, or just be business conscious about their practices. If you haven’t started thinking about it yet, we have a list of possible green criteria to keep in mind:
- Sustainable practices
- Energy efficiency and energy-saving technology
- Research into alternate energy sources: biofuels, wind power, solar power, etc.
- Good environmental practices and policies
- Natural resource management
- Pollution control
- Public, green, or alternative transportation
While the definition of green can vary depending on who you ask, this gives open-minded investors concerned about the environment a measure of diversity. The increasing number of organizations that you can put your money behind and what they all consider green is worth doing your homework on: think about how important it is that the company actively works toward new developments versus just avoiding harm.
What Matters to You?
Maybe sustainability is important to you, so you want to make sure that your money goes toward companies that work to manage the resources of today so that tomorrow won’t be a struggle. Perhaps you want to reward new technologies and innovative startups trying something new in the environmentally-friendly world. If you feel cautious about investing in a young organization, that’s fine, too: consider looking into established businesses that take green concerns into account in their practices, even if it’s not in an industry known for it. While some green investors might balk at the idea of investing in oil or logging companies, if they’re taking environmentally-friendly precautions or steps toward improving their practices, it could be worth rewarding them for that effort. What matters is that you stick to your principles and do so in the way that best rewards you, your wallet, and the world.
Diving into green investing can seem overwhelming, and you probably have a lot of questions. How do I know what’s out there? Who can I talk to? What can I gain? Where do I start? Try starting your journey at Falcons Rock Impact Investments. We’ve done a lot of searching and screening ourselves so that we can make the way clearer for you. Discover the process of getting started with your green investment portfolio.