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Investing in Eco-Friendly Companies

Webull 04/21/2022

When investing, it's important to choose stocks that you believe in. This can mean, of course, that you think you'll make a profit, but also, that you support the company's mission. If your interest lies in environmental consciousness and sustainability, there's plenty of publicly traded companies that emphasize green practices or offer eco-friendly services and products. With more and more businesses leaning toward sustainable business models and aiming to be carbon neutral, it's likely that the future of investing will continue to see household names form more energy-efficient practices. As climate concerns are a current hot topic, sustainable options for investment have grown in popularity. This is great news for those considering the addition of an eco-focused stock to their portfolio. Here's some information on green industries that might be helpful:

Renewable Energy

Here's a brief overview of different forms of renewable energy and how they work.

- Solar: Sunlight is converted into electrical energy via PV panels or mirrors to create solar energy. Using solar power can help reduce electricity costs, strengthen the electrical grid, and limit greenhouse emissions. Solar panels can be installed for residential and commercial use.

- Hydro: Hydroelectricity uses the power of water in motion to generate energy. This type of electricity is generated at power plants near large water sources for use in everyday communities. Over two-thirds of renewable energy is hydro-powered.

- Wind: Wind turbines create electricity by adapting the kinetic energy made with the movement of air. The turbine translates this into rotational energy, fueling the generator connected to the turbine.

- Geothermal: Water and steam carry up heat from the earth's sub-surface, creating geothermal energy. This can be used to generate electricity and heat, though is less prominent in use than the other forms of renewable energy mentioned above.

Many companies that operate with the purpose of creating renewable energy are publicly traded and even pay regular dividends to shareholders. If the conservation of fossil fuels is something you feel strongly about, consider looking to invest in companies that create or utilize renewable energy.

Electric Vehicles

The development and popularity of EV has grown over the past several years and is projected to continue in growth for years to come. You may have started to see car charging stations in your city, or e-bikes in densely populated areas. Check out the benefits of a few electric transportation options.

- Cars: Driving electric instead of gas-powered allows drivers to mitigate the consequences of petroleum consumption. These vehicles have lower fuel costs, as they tend to last much longer on a full charge than a conventional vehicle on a full tank of gas.

- Two-wheeled vehicles: This includes bikes, scooters, and mopeds. Several companies offer such units to rent and return as a low cost, especially in high-density areas, as a way to travel quickly and efficiently around a city.

There are several popular brands that you can buy stock in if you're interested in supporting fuel-efficient transportation. As electric vehicles become more popular and grow in development, more choices for EV investment will begin to pop up.

Sustainable Food

Being environmentally friendly isn't all about energy, though. It can impact many parts of life, including how the food we eat ends up on our plates. Supporting sustainable farming, from seafood to produce, is another way to exercise your green thumb in the stock market. It's likely that some of the grocery shopping methods you already use promote eco-friendly practices without even thinking about it, whether your local grocer is supplied by sustainably caught seafood companies, or you get your fruits and veggies from a produce stand. If you think about how your food gets to you when you shop, investing in companies that specialize in sustainable food sources might be a great fit for your portfolio.

Waste Management

Another thing you may not consider when it comes to green industries is waste management. While this includes your typical trash collection, it's also things like recycling and emergency spill response. Addressing the waste made on a daily basis is a huge part of keeping our earth clean. Whether it's an oil spill or damage caused by natural disasters, clean up is required to protect the environment from lasting damage. There are many publicly traded companies that deal with various aspects of waste management; consider looking into this industry when searching for your next investment opportunity.

Earth Day is April 22nd. While you're celebrating the Earth this month, take the time to think about the values of the companies in which you hold stocks. If you're looking to diversify your portfolio and find eco-friendly companies to invest in, check out some of the above industries before diving into your next investment.


Sources:

https://www.energy.gov/eere/solar/how-does-solar-work

https://www.nationalgeographic.org/encyclopedia/hydroelectric-energy/

https://www.irena.org/wind

https://www.irena.org/geothermal

https://afdc.energy.gov/fuels/electricity_benefits.html

https://www.gobankingrates.com/investing/stocks/top-environmentally-friendly-companies-invest/