7 Tips for Sustainable Investing

Tips for Sustainable Investing - EarthShare National - Environmental non-profit charity organization and environment volunteering

You volunteer, make responsible purchasing decisions, and give to environmental nonprofits through the EarthShare at Work program, but is it possible your retirement fund and other investments are undermining those efforts? How can you ensure that your financial investments aren’t hurting the planet? Socially Responsible Investing (SRI) and Impact Investing offer ways to finance businesses that are doing good while securing your financial future.

If you decide to use your investments for a better world, you’ll be in good company: $12 trillion worth of assets were screened for environmental, social and governance criteria in 2018. And contrary to popular belief, many investors are learning that doing so can actually benefit financial returns. Read on for tips on how to start making sustainable changes to your portfolio.

  • Review your holdings. Have you ever taken a careful look through the holdings in your mutual funds or ETFs? Surprised to find some companies in there you find problematic? The first step in green investing is understanding how your money is being used and coming up with a plan to make it work for your goals.
  • Pick greener mutual funds and ETFs. There are now so many SRI funds out there that there’s sure to be one that meets your investing style. Check out EarthShare members As You Sow and Green America to see their top picks, or visit Morningstar or Charles Schwab for their own environmentally-friendly fund ideas. If your employer-sponsored retirement broker doesn’t offer the fund you’re looking for, ask them to carry it!
  • Encourage your organization to divest. The global fossil fuel divestment movement now encompasses $8 trillion worth of investments. If your university, church, or favorite charity hasn’t divested their endowments of climate-harming fossil fuels, use this guide from 350.org to push for change.
  • Bank for the community. Moving your money to a local bank ensures that your dollars work for the community. Read Green America’s guide on making the switch.
  • Crowdfund for a better world. Sites like Indiegogo, Kiva and SunFunder allow you to interact with the people and projects benefited by your investment. Whether you want to help someone set up an urban farm in North Carolina or run a small textile business in India, small-scale investing is rewarding beyond a financial statement.
  • Pick a greener CD. Want to keep your money in a safe place while still making more interest than a traditional savings account? Consider an online certificate of deposit with a bank like LimeLight which funds solar projects in the US.
  • Get active with your stocks. If you own a significant amount of stocks in a particular company, you have more influence than the average consumer, so use your position to advocate for sustainable change. Known as “shareholder activism” stockholders can attend annual meetings, vote on changes to company policy, and communicate with management. Visit As You Sow to learn how to get started.

*The content here is provided for your personal information only, is not intended for trading purposes, and cannot substitute for professional financial advice. Always seek advice of a competent financial advisor with any questions you may have regarding a financial matter.

*Photo: Rawpixel/Unsplash