The Everyday Climate Warrior Guide 3: Care as an Investor
Investors have enormous power to change our economy and make it more sustainable. In fact, they seem to be the one stakeholder group that companies, who control most of the emissions value chain, really listen to. And the investment landscape is changing for the better.
Some very large investors, such as Norway’s $900bn sovereign wealth fund, have already decided to shift their capital from companies that are part of the climate problem to those that are part of the climate solution (refer). The reasons for doing that are partially political. But they are also linked to a higher return and lower risk expectation from sustainable investments. For more, see the discussion on the “carbon bubble” as an example (refer).
There is also a large divestment movement which is particularly active in US universities, where more and more students are demanding that multi-billion endowment funds stop investing into carbon related companies (refer).
As the heavy hitters are making their investment choices, you, as a private investor, can also push the climate agenda: you can invest into stocks of sustainable companies and divest from fossil fuel companies (following in the footsteps of many leading investment experts). And there are ways as a shareholder activist: make sure the tough questions get asked.
You can also invest into green funds or buy green bonds. Or you can invest into green startups. Make your money work for the right cause! In some cases (for example in funds or stocks), going green might be the most profitable investment choice, in other cases (for example in green bonds), you can give sustainable companies a push by accepting a lower return. Here are some more ideas.
Investment choices are pivotal: a transition to a low carbon economy will require a shift in the way we build and use our infrastructure and this is driven by investment.