Investments are often thought about simply in terms of their potential return. Investments are primarily about making money, but increasingly, investors are making investment decisions based on ethical factors such as environmental concerns and sustainability.
Making an investment decision driven by ethics rather than potential returns may not seem to make much sense. However, increasing awareness of the damage being caused to the planet by climate change, and the rise in natural disasters such as bush fires, is enough for many people to re-think their investment strategy and opt for a greener approach.
Ultimately, socially-responsible investments make sense in terms of good business as well as ethics. In a global marketplace that is making a significant shift towards sustainability, it seems logical to be a part of this and to invest in this fast-growing area.
Research shows there is a strong correlation between businesses that operate with a sustainable approach and increased economic success, which could be great news for responsible investors.
Before you leap into an investment opportunity based on its eco-friendly premise it is vital to dig a little deeper and to do some research. Responsible investors need to be sure that the investments they choose have not been ‘green-washed’ and are genuinely ethical.
Unfortunately, businesses labelled as eco-friendly may not be all that they seem when you scratch beneath the surface. Carrying out thorough research should help you to avoid this pitfall and ensure that you make a genuine green investment.
If you want to maximize your investments to ensure that they deliver on both profit and ethics; then green investments are definitely the way to go. Here are some ideas to consider when planning to make a sustainable investment:
Land
Many investors buy up large areas of land for use as building plots, with the intention of clearing the land and selling it onto a developer, or to instruct a builder to construct an apartment block or similar on the site to be rented out for profit. Instead of buying land, stripping it and then building on it, why not consider buying land and keeping it as a natural space?
If you worry about the environment and issues such as deforestation are a concern, then why not play a part in preserving the land for wildlife and future generations to enjoy? You can do this via forestry investment which involves purchasing an area of forest. There are many forests available to buy across the country, so there are many opportunities available for you to own and manage a forest.
Investing in a forest and preserving it is a unique opportunity that enables you to spend time surrounded by nature. There are many environmental benefits to owning a forest. Forests are essential for air quality, and also play a vital role in flood prevention. You may also gain some tax benefits from buying a forest.
Renewable Energy
Concern that fossil fuels will run out and worries about the damage they cause to the environment have made renewable energy a significant area of interest for eco-conscious investors. There is no doubt that renewable energy will become increasingly common over the coming years, so making an investment now could pay off in the future.
Solar panels are becoming an increasingly common sight on the rooftops of homes, thanks to governments incentivizing the public to switch to renewable energy sources through the use of grants.
The more pressure that governments put on companies to reduce their environmental impact, the higher the adoption rate for renewable energy products will become. This presents a significant opportunity for green investments beyond renewable energy companies themselves.
Higher demand for renewable energy will also provide potentially lucrative opportunities to invest in the businesses that manufacture the component parts for renewable energy equipment; the companies that assemble and distribute renewable energy equipment, along with the companies that install and maintain the finished product.
Recycling
Collecting used items and disposing of them may not sound like an exciting investment opportunity, but it is definitely an option to consider. Recycling items and reducing the amount of rubbish that goes into landfill is vital, especially when the rubbish could cause environmental damage.
Preventing items such as batteries, cooking oil, and light bulbs from entering the landfill, and ensuring that they are recycled after use and disposed of responsibly is essential to protect the environment. The recycling of these items, and the recycling industry as a whole, could be an excellent eco-conscious investment opportunity for you to investigate further.
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