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Climate Change

Which Do You Think Will Make You More Money: Fossil Fuels or Clean Energy?

by Jim Armstrong

Finance houses should be working to put more green in your pocket and in the environment. So, what are the steps to making the shift to higher-performing and job-creating renewable energy investments?

‘Doing well by doing good’ isn’t a recent buzzworthy phrase. The idea of socially responsible investing emerged over three millennia ago as a means of avoiding ‘sinvestments’. In Biblical times, Jewish law mandated ethical investing as ‘Tzedek’, the word for justice and equality, contained a set of guidelines for correcting imbalances in the environment caused by human activity. 

Moreover, The Quran, written between 609 and 632 CE, included an overarching goal to prevent exploitation. The relationship between risk and profit was discussed in these standards which aimed to rule out investments in gambling and armaments.

In the 18th century the United States, Methodists leader John Wesley’s sermon ‘The Use of Money’ called for doing no harm to others through your business practices and rejecting industries that can harm the health of others. It resisted investments in the slave trade, smuggling, conspicuous consumption and companies that manufactured tobacco or promoted gambling.

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Surprisingly, the first public offering of a socially-screened investment fund at the New York Stock Exchange, The Pioneer Fund, was established 1928 by an ecclesiastical group in Boston. In 1971, a Methodist group organized the PAX World Fund, which appealed to investors who wanted to be sure their profits were not from weapons production. In 1973, Dreyfus, a major mutual fund marketer, launched the Third Century Fund, a collection of companies sensitive to the environment and local communities. Clearly, stock traders have already contemplated the end investments in fossil fuels as well as the support for these deadly energy sources. 

Today, the move from investing in fossil fuels to investing in clean energy is not simply prompted by religious values or a moral compass. Our history and future is rich with the idea that investments can be good for your own economics as renewable energies are proving to be far superior investment than pouring money into oil and natural gas.

Energy exchange-traded funds (ETFs) invest in stocks of companies involved in the energy industry. Over the last four years, the largest clean energy exchanged traded fund in the U.S. increased 152% in value.  The equivalent fund for oil and gas lost 20% of its value so even 'reliable’ and ‘safe’ companies like ExxonMobile and Peabody Energy are losing money. It’s time to redefine ‘reliable and safe’ and shift from ‘blue chip’ to ‘green chip’ as returns on investing in solar, wind and other renewable energy sources will continue to outperform their outdate energy competitors.

Solar power and wind energy are creating jobs 12 times faster than the rest of the economy.

Another reason why it’s clear clean energy is the profitable route to go is job creation. Solar power and wind energy are creating jobs 12 times faster than the rest of the economy. Today there are more Americans earning their livelihood in solar than in oil and natural gas. It’s an ever-expanding market that also includes, geothermal energy, biofuels, hydropower and other alternatives forging high demand, fast-growing careers for engineers, farmers, solar fabricators/installers, wind turbine developers and wind turbine fabricators, installers and developers. 

Offshore Wind Turbines

Wind farms are popping up everywhere making them more attractive investments; 

Wikimedia

So, what are the steps to take to shift to higher-performing, job-creating green energy investments?

First, an inventory of where money is invested and what it supports needs to be taken. With this ‘follow the money’ insight in hand, divesting from fossil fuels can commence as the shift to renewable power positively empowers investors.

This empowerment leads to not just the encouraging, but the insisting financial managers not just consider but champion clean energy funds.  There is a growing source of socially-responsible investment specialists available to help pinpoint green investments in an ever-expanding universe of green funds.

Need more convincing beyond higher-performance and job-creation?

The biggest of financial players are seeing the light of green energy investing. A century ago, John D. Rockefeller became the richest man in the world from his investments in oil. The foundation founded upon his wealth has been 100% focused on clean energy since 2014.  Along with Rockefeller, Bill Gates, Elon Musk and Warren Buffet are not looking back to fossil fuels, but investing forward and putting their money where clean energy is currently and headed.

What if 3,500 years ago the seeds of green investing really took root and became the norm? Today, there wouldn’t be investing to offset the challenges and crisis of climate change, instead, investments would be made in the health of humans and the planet 3,500 years from now. 

It still can happen.  It will happen.  

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