Home research company How to invest in companies and funds that protect the environment

How to invest in companies and funds that protect the environment


A member of a rescue team walks down a flooded street in Laplace, Louisiana, after Hurricane Ida made landfall on August 30, 2021.

Marco Bello | Reuters

From Hurricane Ida to wildfires in California, experts are reporting signs of climate change.

Research shows that individual investors are taking note.

A recent survey by professional services firm Accenture found that 59% of investors who work with financial advisors asked them about ESG (environmental, social and corporate governance) or socially responsible investments.

In addition, 84% of investors who made these requests planned to invest their money in these types of investments in the following year.

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Most US investments that take ESG into account are made by institutional investors, such as pensions, insurance funds, and educational institutions. But individual investment in ESG-type investments is growing, according to the Forum for Sustainable and Responsible Investment, or US SIF, a nonprofit that tracks the sustainable and impact sector.

ESG assets held by individual investors grew by 50% from 2018 to 2020, from $ 3 trillion to $ 4.6 trillion.

“Climate, for most people, is something they most easily see a connection to in the investment process,” said Lisa Woll, CEO of US SIF.

Other issues – in particular the increased interest in racial justice – are also attracting more interest from investors, she said.

As with any other type of investment, it’s important to research these holdings to make sure they match your values ​​and goals.

These resources can help you get started, whether you are interested in equity or cash investment products, according to a recent report of the US SIF.

Mutual funds and ETFs

A fund’s prospectus will indicate whether its investment strategy takes ESG into account.

They also typically file N-PX reports with the Securities and Exchange Commission that show how it voted on resolutions made by shareholders or company management.

There are other resources that can help you as well.

The US SIF provides a line chart sustainable mutual funds and exchange-traded funds offered by its member companies. This allows investors to compare the costs, performance, screens and voting records of funds.

In addition, As You Sow, a non-profit organization focused on corporate social responsibility, offers a online tool which compares the ranking of funds based on criteria such as deforestation, fossil fuels, gender, guns, weapons, tobacco and prisons.

Morningstar investment research firm also provides fund rating depending on their sustainability, impact or ESG factors.

Direct shareholding of the company

Listed companies often include information such as corporate responsibility and sustainability reports, as well as ESG policies and performance, on their websites.

Other resources that can help investors include Just Capital ranking of companies depending on factors such as how it treats workers and its environmental impact. The Corporate human rights benchmark and the Business and Human Rights Resource Center also monitor the performance of companies in the area of ​​human rights.

Cash investments