Here's Everything You Need to Know About Sustainable Investing
Updated Dec. 30 2020, 2:09 p.m. ET
The drive to become more eco-friendly, in response to the ongoing climate crisis, comes with an increased desire to invest sustainably. Those who can afford to do so are more interested in investing their money in eco-conscious companies that commit to making a positive environmental impact — for example, Meghan Markle recently invested in a vegan coffee company because of its female ownership, as well as its commitment to combatting food insecurity and global warming.
Keep reading for more on sustainable investing, how to get started, and more. With seemingly no visible end to the ongoing climate crisis, it's absolutely vital for individuals to ensure their funds are being invested in a socially responsible and eco-conscious manner.
What is sustainable investing?
"Sustainable investing," "green investing," or "ethical investing" is officially defined as using money to generate long-term income, while simultaneously taking social and environmental practices into account, as per US SIF. Sometimes sustainable investors discover potential investments by researching local issues in surrounding communities, or by scoping out clean technology startups that are expected to have a positive environmental impact in the long run.
As previously mentioned, there is a growing market for sustainable investing with an increased desire to help the planet. At the end of 2019, the US SIF Foundation found that $17.1 trillion was invested sustainably, which was 42 percent more than the $12 trillion invested two years prior. These days, investors can work toward a certification for sustainable investing, or you can use various apps that focus on helping people invest their money, while making a positive environmental impact.
How can I ensure my money is being invested sustainably?
Although investing in general can be relatively daunting, there are a few easy ways to ensure you're doing so in an eco-conscious and socially-conscious manner. Investment company Betterment hooks interested investors up with companies and investment opportunities that aim to provide positive impact, while Fossil Free Funds helps those who have already made investments determine if their funds are being used toward fossil fuel extraction or consumption.
If you need a little help delving into the green investment game, there are a few ways to find specialized financial advisors. Green America and Investopedia both have running lists of consultants and firms that specialize in eco-friendly investing, so you can meet with someone in-person or over the phone to discuss your sustainable investment options with someone knowledgeable on the subject.
Leonardo DiCaprio is considered to be a "green business angel."
The notoriously green Leonardo DiCaprio is considered to be an incredibly vital member of Hollywood's "green finance community." According to Novethic, DiCaprio has invested in multiple startups that aim to provide positive social and environmental impacts. For example, in spring 2019, he invested in an online investment banking hub called Aspiration, which ensures client's investments don't go towards fossil fuels.
DiCaprio has also invested in Allbirds, a (somewhat contested) natural shoe company, as well as the energy-efficient company, Bluon Energy. He also holds a seat on Princeville Climate's advisory board of venture capital, which invests in cleantech, and is the creator of a wildlife protection foundation. Needless to say, the Titanic actor has certainly put his money where his mouth is.
There are many ways to invest sustainably, so if you're looking to make longterm income, now is a better time than ever to ensure you're doing so responsibly.
