With environmental issues such as global warming and the pernicious effects of green house gas emission hogging the limelight, there has been a consensus among the leaders across the globe to save our earth. So as to help this cause, you as an investor can do your part by investing in a socially responsible way. If you have the required money, you can join this noble endeavor by directly investing in your favorite environmentally-minded companies and in turn you will bolster both existing and the emerging sustainable industries. However, challenges are also abound, because as an investor your aim would be to raise your personal wealth as well as to take efforts so as not to damage the people and the environment. So carefully select your investment strategies which best meet your financial goals and which also support the environment. Here are some tips on green investing which as a socially responsible investor you should follow.
Select the green investing sector
At the outset, you need to select the green investing sectors where you want to invest in. Common green investing sectors would be renewable energy, organic and natural food, pollution controls and environmental clean ups. Again, each of these sectors can be categorized into several sub-sectors. The next step is to choose the stocks which you think are more rewarding. Again, remember that you should not invest all your money in the stocks of a particular company which is environmentally-minded. Here also you need to follow the strategy of diversifying your investments. So need to find a variety of green stocks hailing from different environmentally conscious sectors to as to reduce the risks of investing.
Beware of greenwashing
There are some companies which misleadingly preach for their green endeavors so as to attract the socially responsible investors. These companies claim that they practice green, but in actuality, this is not true. As a responsible investor, you need to be very much careful about such companies which engage in greenwashing. So it is advised that you should not believe in the words. Rather you should do your own research. Remember that if a company's claim about its green product turns out to be false, you will be in the losing side. So, before investing in the stock of a company, make sure that the company's claim about its green product is unblemishedly genuine.
Invest in mutual funds
In mutual fund investing, you are not required to directly invest in the equities. Rather, the professionally qualified fund managers are responsible for managing your money so as to earn the maximum return for you. Some thematic mutual funds are also there in the market place which target a specific sector. For example, a fund may be like that which invest in the shares of the companies which are engaged in the reduction of green house gas emissions. You can pick such a mutual fund and participate in green investing.
It is indeed a noble idea to invest directly or indirectly in the stocks of the companies are environmentally-minded. This saves our earth as well as helps you raise your wealth.
So as to help this cause, you as an investor can do your part by investing in a socially responsible way.