Green investments – financial support for eco-businesses

Green investments – financial support for eco-businesses

Caring for the environment is not limited to sorting garbage and switching to durable, reusable items. In the modern world, a trend is developing towards green investments, investments exclusively in projects or companies whose activities are aimed at preserving nature in its original form.

These can be directions related to air purification, the use of alternative energy sources, in other words, everything that solves man-made environmental problems.

Forward, in search of eco-companies

Green investment was first discussed in the 1980s in Europe. In those days, banks began to financially stimulate projects related to the protection of nature and its restoration. Now everyone can help the environment – you just need to buy the securities of the selected green company. However, before buying, you should study the selected project or business in detail.

Today, even oil and gas companies are striving to join the trend of sustainable development. For example, in 2020, Rosneft transferred ₽300 billion to offset the damage from greenhouse gases that are formed as a result of production operations. And this despite the fact that the company itself cannot be classified as green, like many others. However, such actions significantly increase the rating in foreign markets, attract green investors and reduce the cost of environmentally related government fines.

Given this information, each investor independently determines how green a particular company (or project) is. Some support exclusively environmentally friendly areas: the development and production of renewable fuels or the creation of energy-saving technologies. Others are interested in companies that properly dispose of waste from their activities and use natural resources wisely.

green backgrounds

In order not to make a mistake with the choice of green investments, you need to contact a special investment company. Such organizations are called green funds. They began to be created around the 90s. the last century. At that time, savers took as seriously as possible the damage that companies or even entire industries could do to the environment.

Such funds cooperate only with companies that operate solely for the benefit of the environment. The Fund thoroughly reviews each organization before beginning to invest in it.

Usually such structures work in the following areas:

  • renewable energy sources. This category includes companies that use the sun, wind and water in the generation process.
  • construction industry. Companies that create materials for the construction of renewable energy generating facilities are taken into account. As well as construction companies that use materials with a minimum carbon footprint (energy efficient).

Green funds are quite effective, because many of their clients tend to be more conscientious and deliberately do not invest in companies with questionable reputations (related to gambling, pornography, weapons, alcohol, animal testing). Experts believe that this is the first step towards a new environmental awareness that can change the future.

green bonds

One way to become part of the environmental movement is to buy green bonds. They are no different from ordinary fixed income debt securities, but are intended exclusively for environmental projects. Investor funds help develop renewable energy sources, build waste processing complexes, improve treatment facilities, etc.

Bonds can only be considered green if they comply with the Green Bond Principles (GBP) set by the International Capital Markets Association (ICMA). It is desirable that the selected asset meets the requirements of the Climate Bonds Initiative. Even after a company is recognized as green, it must confirm the status with its expenses and the work carried out.

bet on fame

There are many technologies that can be considered green. Companies operating in such areas are, in fact, advocates of nature conservation and, as a rule, create various environmental projects. The addresses can be different:

  • Recycling waste. This includes waste recycling, garbage incineration.
  • creating clean water. The technologies help purify drinking water from impurities, ensuring its availability to everyone.
  • air cleaning. The technologies are designed to filter harmful impurities emitted into the atmosphere by industries.
  • Energy. A list of solutions that allow you to create energy efficient devices, alternative sources of fuel that do not generate waste by-products.

Companies engaged in the conservation of natural resources are listed on the stock exchange of the Russian Federation. If you need to buy green investments in Russia, it is quite possible to choose the appropriate domestic or foreign option.

solar energy

  • first solar. An American company is the creator of the largest solar parks in different countries. At the same time, it has its own production and, upon request, maintains and recycles the panels.
  • Sunrun. Create solar panel systems designed for residential service. It operates in the US and offers equipment to buyers on a sale or lease basis.
  • phase energy. It produces all the necessary components for the generation of solar energy at home, as well as control equipment. The products are represented in Europe, North America and Australia.

Wind power

  • NextEra Energy. It owns solar and wind power plants, ranks first in the supply of energy through alternative sources.
  • TPI compounds. The company produces blades for wind turbines and supplies products to all corners of the world. Considered a leader in this field.
  • Enel Russia. It has been building wind farms since 2019. Full power generation is planned for 2024.

Creation of ecological fuel

  • power plug. The company specializes in hydrogen fuel systems. They are needed to replace conventional batteries in electric vehicles. Such solutions have a significant advantage – the absence of harmful emissions into the atmosphere and high-speed charging.
  • Renewable Energy Group. Serious producer of biofuels in the US market. The product is made from biomass, which consists of animal fats and vegetable oils.

electric transport

  • Tesla. Leading company in electric cars. In addition to TS, it produces roof tiles and solar panels, batteries for energy storage. He is the initiator of the construction of a network of “supercharging” stations, some of which will be powered by solar energy.
  • Wabtech. Produces electric motors for railway locomotives. It produces a range of products for the digital economy.

risk accounting

Green investments are certain investment risks. The fact is that many companies in the sphere are often unable to pass the stage of development with low profitability and move on to high profitability. In addition, the demand for traditional sources continues to be higher than that for alternative sources. If the investor does not want to lose money, then the idea of ​​investing in such companies should be abandoned.

There is also the problem of capital expenditures in some areas. For example, to create a solar farm, it is necessary to build hundreds of hectares of land with panels. When the panels reach the end of their useful life, they must be disposed of properly. In the case of electric cars, a sufficient number of charging points is lacking.

At the same time, it should be noted that some companies only position themselves as green, but do not adhere to the declared principles at all. Therefore, before buying shares, you should carefully study all available information about the project or company in order not to violate its principles, since green investment in the modern world has many pitfalls.