New Climate Initiatives Have Investors Seeing Green
News Investors no longer need to choose between improving the environment and a strong return on investment. Today, with renewable energy, you can do both.
From professionals on Wall Street, to working parents saving for retirement in the Midwest, investing has always been about one goal: return on investment. By making smart decisions with your savings, you could secure a future for yourself, your families and your business. In the past, clean energy has never fit into this conversation; it was too expensive or offered an unpredictable outlook. But that’s all changed.
Who’s it for?
Over the past several years, many investors have begun to shift the mix of their energy portfolios to be less carbon intensive and are capitalizing on opportunities to invest in the Clean Energy sector. This set of investors continues to grow rapidly and today includes sovereign wealth funds, public and private pension funds, insurance companies, city governments, foundations, endowments, family offices and high net worth individuals.
"The cost of putting carbon into the environment is real, and is causing many of these investors to reconsider their investments in certain fossil fuels..."
Even individuals—the parents saving for retirement or a college fund for the kids—can now invest in renewable energy stocks, corporate bonds, mutual funds and more. In fact, since 2012, clean energy indices have performed very favorably relative to S&P 500, NASDAQ, and fossil fuel indices.
All of this poses the question: Since when did going green start making green? The answer lies within the past 5–10 years of technological advancements in the renewable energy industry. Right as some fossil fuels started to become less attractive, technologies like wind and solar power began to drop rapidly in cost. Today, wind power is the lowest-cost energy option in many parts of the country, even lower than natural gas. You can add a solar system to your rooftop at no money down, often cutting electricity bills by 50 percent or more.
Additionally, professional investors and Fortune 100 companies are increasingly considering “carbon risk.” The cost of putting carbon into the environment is real, and is causing many of these investors to reconsider their investments in certain fossil fuels, and many of these companies to develop internal prices for carbon emissions.
Keeping the pedal down
We still need government action to keep up momentum, and policy remains as important as ever. Washington has always supported fossil fuels and should continue to give equal support to renewables. But we are truly entering a new era of low carbon energy. From wind to solar to biofuels and electric vehicles, the opportunity to see a positive return on investment while also cutting carbon is better than ever.