It seems that investing in green now has a double meaning.
A couple of years ago, if you had asked someone about “green investing,” they probably would have told you that they were just trying to make some money. Today, “investing green” doesn’t just mean investing to make money, but investing your money in an environmentally friendly way.
So how can you participate in this type of investment? Aside from investing in mutual funds that specialize in these types of businesses, it seems there are actually one of two ways to invest your hard-earned money “green”:
- Invest in companies whose sole purpose is to be environmentally friendly, i.e. companies that focus on recycling, renewable/alternative fuel research and development, etc.
- Invest in companies that have invested significant resources to ensure they do business in the most environmentally friendly way possible, ie making their offices more energy efficient, encouraging their employees to telework, etc.
Now that you know where to start, how do you go about finding these types of businesses? Listed below (in no particular order) are some simple things I’ve done in the past to identify companies that are doing things a bit greener than their counterparts.
- Stay up to date with current events. Sites like Treehugger.com and Hugg.com are great places to find stories about eco-friendly companies.
- Keep an eye out for green products when you go shopping. In most cases, companies that are willing to put out green products tend to be green companies.
- Remember that industries such as oil, logging, housing construction, etc. These are probably not the best places to start your search.
Keep in mind that just because a company does things in an environmentally friendly way doesn’t necessarily mean it’s a good investment. Make sure you do a good job of researching each company (which means doing your due diligence) before you decide to invest in them.
There is no point in investing in a green company if it is not going to give you a good return on your green!