Saving the planet is pretty important for some people, and I’m guessing it’s at least a vague thought in your head. After all, you are reading a website called Sustainable Personal Finance.
But as we’ve argued in the past, there needs to be some sort of incentive for people to do the right thing. Governments have done a good job with this in the past by doing things like paying people to recycle, giving tax breaks for people who install their own solar systems or buy electric cars, or by encouraging research into promising new technologies.
It’s the same thing when it comes to investing. The object of that game is to make money; saving the world is a secondary (at best) goal. I guarantee any environmental thoughts go out the window when someone doesn’t have enough to afford to eat in retirement.
Fortunately, there are investments out there that allow environmentally-conscious folks to have their cake and eat it too. Here are three investing ideas that would look good in every tree hugger’s portfolio.
As technology has improved, Canada’s power generators have abandoned fuels like coal and even natural gas, choosing to invest in hydro, solar, and wind projects. These projects generate cash flow day one, and there will likely be plenty of demand for more of them over the long-term.
There are a few different companies in Canada that focus on renewable energy, and unfortunately for folks who don’t really like to pick stocks, no ETF exists that allows you to get broad exposure to the sector without having to buy individual stocks.
Four of the top renewable power stocks in Canada are Brookfield Renewable Partners LP, TransAlta Renewables, Northland Power, and Innergex Renewable Energy. I’m not entirely sure which one is best, so I’d just buy all of them, creating my own mini ETF.
I know, the maker of some 10 million gas-guzzling cars per year doesn’t really seem like a very green choice. But hear me out.
General Motors knows where the future is, and is taking steps to ensure it’s in the lead when that time comes. It already introduced the Chevy Volt, an electric car which was met with mixed reviews. Some people loved their Volts. Others mocked the concept throughly. The next generation of electric vehicles called the Bolt come out soon.
General Motors has something like 4,500 engineers working on building engines that don’t run on gasoline. And many of its other engineers are working on ways to make existing engines more efficient.
General Motors isn’t alone with this investment. Its competitors are pouring many billions more into new technology, much of it going towards electric motors and other green-friendly initiatives. By investing in the sector, regular people are encouraging this research to continue.
CO2 Solutions is definitely not for the faint of heart. You’re nuts for making a company like it a major holding in your investment portfolio. But it could also be a game changer.
The company sets up carbon capturing technology on things like power plants, oil and gas production, and cement and metal industries, which helps these polluters cut their carbon footprint. It then sells this carbon back to industries that need it, like greenhouses, fizzy drink producers, water treatment plants, and pulp and paper mills.
The company claims costs for their technology are 35-60% less than their competitors, with the added benefit of generating no toxic waste. Both private enterprise and governments seem pretty interested in the technology.
There’s only one problem. The company hasn’t really built any yet. It not only doesn’t make money, it doesn’t even have revenue.
That’s a huge problem.
It does have enough in the bank to last it a while longer, and both the Alberta and Quebec governments have given it grants towards building pilot projects in both provinces. So it is making progress, but still remains an incredibly risky investment, albeit one with huge upside.
You don’t have to sacrifice investment returns by going green. Each of these ideas has considerable upside potential, although with varying degrees of risk. As always, do your own research before investing.