Most large brokerage firms are offering a mutual fund limited to investment in ecologically responsible companies. Yet, Wall Street’s idea of “ecological responsibility” often takes the form of a misguided perception of what constitutes a “green” investment.
A green fund prospectus is usually quite straightforward in spelling out investment goals. The problem arises in transferring noble ambitions into actual green investment. Even inclusion of natural gas, which is touted as a bridge to renewables, possesses a major drawback. It releases heavy polluting methane into the atmosphere, thereby exacerbating global warming.
Oil and gas stocks appear on some of these green funds’ ledgers as the securities are being divested in many quarters throughout the world for being incompatible with a gradual phase-out of fossil fuels. These fossil fuel stocks are lacking in systemic sustainability, a prerequisite of pure green investment, which includes renewable energy, that is a projected societal bulwark of a carbon-free future.
Some of the green funds rule out genetic engineering, nuclear energy, and highly toxic pesticides in their portfolios. All well and good, but if you have the money and time, the best way to build a pure environmental set of holdings is to do it yourself.
Furthermore, investment in solar and wind generates better long-term returns than the purchase of fossil fuel securities. So does investing in recycling, in industries specializing in retrofitting the nation’s large supply of housing, and in companies which have abandoned planned obsolescence in their product lines. Investment in companies engaged in regulatory protection and financing the expansion of organic farming duly qualify for inclusion in an aggressive green fund long-term investment strategy as well.
Something else for investors to consider: What good is amassing a fortune of Wall Street assets if the world ends up too uninhabitable to enjoy great wealth?