A Beginner’s Guide to Green Energy Investing

Green Energy Investing

Global warming, extreme weather, heatwaves, wildfires, droughts, melting polar ice, and rising sea levels are the direct consequences of overloading our atmosphere with carbon. 

The prime reason for our increasing carbon footprint is burning fossil fuels to drive cars and generate electricity to run machinery, household gadgets, and industrial infrastructure. It is time we transitioned from conventional energy sources to renewable sources.

Here we share why and how you should invest in green energy.    

What is green energy investing?

As defined by the EPA (Environmental Protection Agency), green energy stands for all energy resources that provide the highest environmental gains. It includes solar, wind, geothermal, and biogas energy and the electricity generated through low-impact hydroelectric projects such as run-of-the-river hydroelectricity. 

Green energy is vital for reducing CO2 emissions and tackling climate change. Investing in projects that support the generation and supply of green energy is known as green energy investing.

Why should you invest in green energy?

  1. Rising market share: Green energy is making waves in capital markets across the globe. According to a Bloomberg New Energy Finance report, renewable energy will account for up to 60% of power generation by 2030, and the investment in fossil fuels will fall to 46% from 64% in 2013. Wind and solar energy generation will go up from 3% to 16% by 2030. So, there is a lot of scope for investing in green energy stocks. 
  1. Yields more returns: According to the International Renewable Energy Agency (IRENA), investing in green energy will generate 3 to 8 times higher returns than usual investments. Studies conducted by WRI’s Aqueduct platform show that by 2030, 2.5 million people and $42 billion in the urban property will be affected by coastal flooding caused due to climate change. Investing in green energy can help mitigate climate change.
  1. Generates new jobs: As per IRENA’s Transforming Energy Scenario, the number of jobs in the renewable energy sector will triple by 2050, which means this industry will generate more than 42 million jobs in 2030. Simultaneously, the fossil fuel industry is predicted to lose about 6 million jobs.

How to invest in green energy?

  1. Hydropower: Hydropower generates 7% of the total 17% green energy in the United States. One of the best ways to invest in green energy and reap its rewards in the future is to invest in hydropower. Some major companies in the hydropower sector that you can invest in are Brookfield Renewable Partners (BEP), Innergex Renewable Energy (INGXF), and Hydro One Limited (HRNNF).
  1. Wind power: It is also a good option. You can look for companies that run wind farms or manufacture wind turbines. Some companies that you can invest in are NextEra Energy Partners LP (NEP), Siemens Gamesa (GCTAY), and Vestas Wind Systems (VWDRY).
  1. Solar power: It is another primary source of green energy in the United States. You can promote solar energy generation by investing in companies that install, manufacture, or research the technology and products related to solar energy. Some companies that you can invest in are First Solar (FSLR), JinkoSolar Holding Co. Ltd. (JKS), and Sunpower Corp. (SPWR).
  1. Other methods: If you don’t want to invest in companies directly, you can always consider investing in green energy funds and ETFs. Please make use of our opportunities page to stay current on the latest green energy investment opportunities.

About Impact Capital Partners

If you are looking to earn green returns, Impact Capital Partners should be your one-stop destination. We will help you find impact investments that generate returns and promote the causes you believe in. If you have any queries, fill out our online contact form, and we will get in touch.

5 Benefits of Impact Investing

Impact Investing

Impact investing means providing capital to organizations to create a measurable positive impact while generating financial returns. 

Impact investing is getting increasingly popular; a 2018 study from The Forum of Sustainable and Responsible Investment (“USSIF”) reported that sustainable investment assets reached $12 trillion in the United States and $30 trillion globally. However, Impact Investing is a relatively new concept, and because of a lack of awareness, there are still many questions about its benefits. 

In this article, one of the top impact investing firms provides five significant benefits of impact investing to help you make a better, more conscious decision.

Solving World Problems

In today’s world, we are faced with significant issues such as ending poverty, protecting the planet, and ensuring prosperity for all. The United Nations recently adopted the Sustainable Development Goals (SDGs) to take action on these issues. When looking at the 17 SDGs, every goal has targets that require some sort of financial investment, however, governments and public sources of capital have failed to provide enough investment. According to the UN, developing countries alone face a $2.5 trillion gap in financing. Impact investments are being used by private capital sources to help fill this financing gap and achieve the United Nations’ Sustainable Development Goals (SDGs).

Competitive Financial Returns

It is now widely accepted that you do not need to sacrifice returns to achieve measurable impact with your investments. While it is true some intentionally invest for below-market-rate returns, impact investing allows you to invest in profitable, socially responsible projects with competitive returns. In fact, a majority of impact investors (nearly 67%) pursue market-competitive and market-beating returns. According to the Global Impact Investing Network (GIIN) report, about $15 billion of impact investments produced market return rates equal to other companies. 

Aligned with Your Values

Investing doesn’t have to be all about profits. Conscientious investors are looking for avenues to invest in projects that don’t just harm the planet but do good. They want to promote developmental projects that are aligned to solve issues they genuinely care about. Impact investing is the best way to align your values with your investments. They can provide you competitive returns while contributing to global causes you passionately care about.

Measurable Impact

Unlike other noble causes, impact investing uses measurable key performance indicators (KPIs) based on SDGs and Environmental, Social, and Governance (ESG) goals. You can measure the impact of your investments with clearly reported data. With impact investing, there is no question about how your investment is being used to help solve global problems. 

Industry Agnostic

Impact investing isn’t only about climate change or sustainable development. It covers a broad spectrum of sectors and industries, including healthcare, education, aquaculture, packaging manufacturing, and agriculture. Moreover, impact investments aren’t limited to asset classes either. Private markets play a critical role in supporting the impactful business through private debt, private equity, and venture capital. In the future, public equity markets may also play a role in the growing impact ecosystem.

About Impact Capital Partners

If you’re thinking about earning returns through impact investments, Impact Capital Partners should be your one-stop destination. We will help you find top impact investments that generate returns and promote the causes you believe in. If you have any queries about impact investing in the USA, you can fill our online contact form, and we will get in touch.

5 Myths About Impact Investing

impact investing SDG's

Impact investing means providing capital to companies that generate measurable social or environmental impact while providing financial returns. Through impact investing, investors can generate market-rate returns while backing several sustainable development goals such as poverty, hunger, equality, climate change and others. Impact investments are agnostic to markets, geographies and industries. This gives investors the flexibility to choose social or environmental causes they feel strongly about.

While impact investing has grown steadily in the past few years, lack of knowledge and abundance of misconceptions may discourage investors from making such investments. Here, we debunk five popular misunderstandings about impact investing.

Impact investing is ESG investing

A common misconception is that impact investing is the same thing as Environmental, Social, and Governance (ESG) investing. ESG refers to the environmental, social and governance practices of a company that may have a material impact on the performance of an investment. Today, public market strategies commonly use ESG to screen out investments that do not meet certain criteria. A growing pool of investors looking to feel better about their investments are forcing more public companies to track and report how they are doing with regards to these ESG topics. This is allowing more investors to consider ESG factors that are material to performance, alongside more traditional financial measures.

On the other hand, impact investing is more focused on the positive outcome of an investment. The goal of impact investing is to help companies realize specific objectives that are beneficial to society and the environment. Impact investing is all about the active and intentional deployment of capital to generate positive outcomes. It does not just avoid harmful activities but focuses on proactively supporting positive activities. Investors use impact investments in private markets to overcome global challenges such as those found in the United Nations Sustainable Development Goals (SDGs).

Impact investing is limited to combating climate change

Combating climate change is one of the 17 goals mapped out in the United Nations Sustainability Development Goals (SDG’s). Many impact investments help support projects that reduce global warming, but it is not limited to them. Impact investments provide capital to various projects that promote a variety of the UN’s sustainable development goals. While protecting the environment remains a key goal, the idea is to encourage society’s overall development and not stay limited to climate change.

Impact investing is only in private markets

Today, private markets play a critical role in supporting impactful businesses across many geographies and industries. It is a widespread belief that impact investments will stay in private markets, but we see public equity markets playing an important role in the growing impact ecosystem. Public markets can offer solutions that private markets cannot by allowing more market participants in a space long available only to high-net-worth and institutional investors. This transition will be critical to meeting the global need for impact capital.

Impact investing provides fewer returns

A survey by GIIN and JP Morgan claims that 55% of impact investment opportunities deliver competitive market-rate returns. Another study has found that 90% of impact investments show a positive or neutral impact on financial returns. Therefore, the belief that impact investments provide fewer returns than standard investments is unsubstantiated.

Impact investing is just a fad

Another popular opinion about impact investments is that it’s just a fad that will soon die out. Interestingly, financial institutions have claimed that the impact investment market will grow by $1 trillion in the next three years. Impact investments are here to stay, and there is a growing need for capital in the space. There is an estimated annual shortfall of approximately US$2.5 trillion in developing markets. More capital is needed to meet the sustainability development goals by 2030.

About Impact Capital Partners

Are you an institutional investor looking for impact investments? If yes, then Impact Capital Partners can help you connect with impact investments. We will help you find top impact investments that generate returns while promoting the causes you believe in. If you have any queries about impact investing in the USA, you can fill our online contact form, and we will get in touch.

SELECT YOUR NEWSLETTER

Institutional

I am an institutional professional interested in reviewing investment opportunities.

Retail

I am a retail individual interested in staying current on impact-related news and insights.

CONTACT US

Have any questions? Fill out the form below and we will be in touch.

INSTITUTIONAL

Institutional investors can subscribe to view investment strategies and opportunities.

INDIVIDUAL

Individuals can subscribe to stay current on impact-related news and insights.