Climate Change and Investing: A Critical Topic

With the climate crisis at the forefront of our conversations, we need to address how this affects you as an investor. 

How does climate change affect you as an investor?

Undoubtedly, the climate crisis is demanding the attention of everyone worldwide. Climate change has impacted our food and water sources, the quality of living conditions for many, and transportation hazards, among others. But what if I told you that climate change also affects your investments? Massive industries like fishing and agriculture are (and will continue to) take the largest hit. These industries largely rely on natural resources that are continually being depleted due to climate change. Other industries such as coal are taking incredible losses as well, with the projected loss on returns to be 26% to 138% over the next ten years. This increases the emphasis on investing in renewable energy such as solar and wind, as the average annual return is projected to increase around 4% to 97% over the next decade.  For you as an investor, this means you are likely to lose a great deal of money if you are investing in these industries. As they continue to plummet, there is no saying if or how they will survive. Now more than ever is the time to start investing in industries that are likely to be around for a long time, with the added bonus of helping out the planet. 

What can you do as an investor?

At times it is easy to feel lost or helpless because there is so much uncertainty in the future of our world. As previously mentioned, to combat climate change and strengthen your financial return, it is wise to start investing in renewable energy sources and other sustainable solutions. For example, the solar and wind renewable energy industries are top choices. On the other hand, companies today have made incredible advancements in green technology. These include sustainable materials, electric vehicles, and meat substitutes, among many others. Products such as these are the future. Now more than ever it is important to be smart about where you are putting your money. By choosing to invest in “green” technologies and companies, you are making a difference in the future of our planet as well as your wallet. As an investor, you can make a change.   If you would like to learn more about climate change and investing, we encourage you to reach out to our team or check out our incredible Environment Portfolio. You can connect with us here and view the Environment Portfolio here. If you would like to learn more about climate change and investment tips, we have some incredible blog posts you can check out. You can read them here and here.

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