How to Green Your Investment Portfolio

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The mere thought of starting an investment portfolio can be daunting, so greening your financial efforts might seem too overwhelming to even consider. But, don’t let that stop you – life’s biggest challenges often produce the greatest rewards! Plus, there are lots of online resources available to help you make informed choices and bring in the big bucks (hopefully). If making money while also making the world a better place is your goal, there are two types of investing one should consider: socially responsible investing and green investing. Read on to learn about the differences between the two and pick up some tips to get you started.

Socially Responsible Investing

Before you’re ready to start purchasing anything, you first need to determine where your investment interests lie. When it comes to socially responsible investing, there are two approaches one can take – exclusionary or inclusionary.  Exclusionary investing is when one decides NOT to invest in a company based on moral factors like alcohol, pornography or tobacco. Inclusionary is the opposite approach – instead of withholding funds, one chooses to invest money in a company that either supports a specific social goal. When you invest in companies that share and support social goals that you care about, you are supporting their efforts and increasing their stock value. 

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For both methods, it’s key to look into a company’s practices to ensure that their goals are aligned (or not aligned) with yours. These days we’ve seen more businesses directly addressing issues of sustainability beyond their monetary profit margins. This is most commonly known as corporate social responsibility. There is currently no standard to measure the value of these practices, so many companies are taking it upon themselves to make their efforts known to the public. Along with their annual reports on cash flow, income statements, balance sheets, and changes in equity, many companies and are also including sustainability reports. If the company you’re researching is public, you can access these reports by checking out Sustainability-reports.com or visiting the company’s website. 
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Green Investing

You can also choose to invest your money in green industries like renewable energy, energy storage, or biofuels.  With this approach there are three main options one should consider: buying stock in green companies, investing in green mutual funds, and green exchange-traded funds (ETFs).

 

Buying Green Stocks Options

When looking into buying green stock options, it’s extremely important to do your homework prior to making any big decisions – some consider this industry to be dynamic and unpredictable. We suggest that you take some time to read this extensive getting started guide that explains all of the industry’s nuances in a way that is easy for everyone to understand.

Rebecca Paul / Inhabitat
Rebecca Paul
Rebecca is the Manager of Business Operations and a NY Editor for Inhabitat.com. She is a writer, designer and graduate student currently pursuing her masters degree in strategic design innovation and business management at the Pratt Institute in New York City.
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  • http://profile.typepad.com/inhabitat1 Inhabitat

    Green companies tend to usually have great ethics too which makes them more attractive as long term investments. Thanks for elucidating this point.

  • http://profile.typepad.com/steffenmeinhold Bridgette Steffen Meinhold

    I’ve been meaning to look into this sort of stuff. It make my brain hurt, but needs to be done. Thanks for the great info.