In the 21st century, a profit-oriented organization should focus on the triple bottom line; planet, people, and profits. Sustainability is not just an industry buzzword and has now been integrated by organizations into their business practices.
How can you multiply your company’s profitability with sustainability? The answer involves sustainable investments, colloquially known as green investments.
In 2021, a Reuters report stated that one-third of all the assets of five major markets worldwide account for sustainable investments. It’s because now more companies realize sustainability is more than just a marketing scheme; it’s an evidence-based method to increase profitability and protect the environment.
But what are some green investment options organizations should consider for improving sustainability? Read about sustainable investment opportunities in this article to grow your business.
What are green investments?
Green investments are – as the term indicates – any investment activities aligned with the objective of sustainable development, e.g., conserving natural resources. In other words, when investing in an environment-friendly fund, practice, or business, you have invested in “green.”
A good way to begin investing in green options is after learning enough about them. As a business owner or manager, you register for an sustainable finance and investment course online to know how to merge your company’s ESG (environmental, social, governmental) principles with your investment or financial decisions. Gain relevant insights into ESG data to shape your investment decisions correctly.
Investing in renewable energy
Companies can invest their profits in renewable alternatives to non-renewable energy sources. That’s an effective way to achieve sustainable development, as these renewable investments can greatly decrease your utility expenses. Here are some incredible investment opportunities for improved sustainability:
- Solar:- Installing solar panels for electricity generation has become a popular option in the commercial and domestic sectors. While photovoltaic mirrors and panels won’t eliminate your company’s electricity bill, it reduces it significantly. This tech doesn’t need a lot of maintenance and serves as a safer and cleaner option than other forms of power generation.
- Wind:- There have been arguments against the efficacy of windmills, e.g., how they only operate when it’s windy outside. Also, it’s claimed that windmills harm birds’ flight patterns. For this reason, this option only works in breezy places with enough air and space for birds to fly safely. But it’s a popular renewable option in the USA with 135 gigawatts of installed capacity. You can also invest in wind stocks or wind farms and turbine-manufacturing companies.
- Hydro:- As per the IRENA, hydroelectricity – water-generated power – is the cheapest source of electricity today. Some examples of hydropower are Hoover Dam and Three Gorges Dam in the USA and China, respectively. While this option is location-specific, your company can invest in it by purchasing power from hydroelectric companies if it can access the grid. Also, you may invest in companies with several hydro projects and power plants in different countries to expand your portfolio.
- Electric cars:- Business owners can invest in electric cars to reduce carbon emissions and improve neighborhood sustainability. Make your supply chain greener by using electric delivery vehicles, encouraging bulk deliveries, and choosing local vendors to reduce your overall carbon footprint. Use electric vehicles to commute as well and invest in relevant companies. Electric cars are expected to become the norm in the future.
- Waste reduction:- Another amazing green investment opportunity is to recycle and compost. It has become mainstream to recycle waste to reduce litter and make the world cleaner. But can a company make a profit by recycling? Yes, many things you throw out as garbage can still be used and have a second life, e.g., used car parts and batteries. You can also invest in different waste management companies. Investing in them will help you grow your profitability with improved sustainability.
- Switch to organic:- Companies can also invest in organic options by switching to natural cleaners and ditching toxic chemicals, for instance. Organic cleaners are cheaper, so purchasing them reduces huge costs in the long run. Also, you can replace traditional edibles, e.g., junk food, in the workplace with organic options. Partner with the UNFI to purchase healthy foods for on-site employees. A healthier workforce is less likely to fall sick, take days off work, and be more productive.
- Employee well-being:- A practical way to invest in the well-being of your employees is to focus on making a diverse and inclusive environment. Invest in hiring the right people for the right job. Educate and train your people after hiring to maximize recruitment expenses and overcome employee turnover costs. Surveys indicate 30% of new hires quit within six months because of poor training options. Green investment isn’t just about investing in profitable renewable options; it also involves providing employees with the ideal workplace culture and experience to thrive and strive toward achieving shared organizational goals. Invest your profits in your employees and their well-being.
Investing in mutual funds and ETFs
Sustainable investments also extend to individual stocks, mutual funds, and ETFs through which you can claim a share and watch your corporate profitability grow steadily. Even traditional big oil companies rely on alternative green investment options. Hence, here are some options you can consider investing profits in:
- Solar:- From Sunrun (RUN) and Sunpower (SPWR) to First Solar (FSLR) and NextEra Energy (NEE) – you have several green investing options in the solar energy sector. While many companies in solar are failing, Clearway Energy’s (CWEN) stocks have risen in the past year.
- Wind:- Siemens Gamesa Renewable Energy (GCTAY) emerged after a merger between its parent companies in 2017. You can also invest in the First Trust Global Wind Energy ETF (FAN) for better profitability.
- Hydro:- Invest in IDACORP (IDA), an Idaho-based electric holding company with over one dozen hydro projects. Other options include iShares Global Clean Energy ETF (ICLN) as a rising ETF.
- Electric cars:- One of the top choices for business owners would be Tesla (TSLA). But there are other companies for modest investors, e.g., FuelCell Energy (FCEL).
- Waste reduction:- Invest in Republic Services (RSG) and Waste Management (WM) to multiply your profitability.
Business owners can invest their profits smartly in sustainable opportunities for saving the environment. These investment options include different mutual funds, EFTs, and green startups. Such options include wind energy, solar power, electric vehicles, and hydroelectricity. Reduce office waste and focus on employee well-being. Learn about some popular investment opportunities in the market so you may multiply your profits the “green way.”
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