Earth Day comes around once a year, but investors can put their money to work to combat climate change year-round.
As more individuals come to terms with the existential threat of climate change, sustainable investing is no longer niche. It's gone mainstream, and it's a growing force in the capital markets.
An often cited 2019 survey from Morgan Stanley found that 85 percent of investors with at least $100,000 in investable assets were interested in sustainable investing.
Some 48 percent of investors with $10,000 or more invested said they were "very or somewhat" interested in sustainable investment funds, according to a 2022 Gallup poll. But only 25 percent said they'd heard "a lot or fair amount" about it, and only 10 percent said they were currently invested in sustainable funds.
Not only is familiarity with sustainable investing low, concepts like ESG can be confusing. ESG refers to "environmental, social, and governance." It's a set of standards used to evaluate companies through a social lens, but a study from Stanford University found ESG ratings can be unreliable because there isn't a standardized criteria for evaluation, information gathering is expensive, and data can be incomplete or unreliable.
Peter Krull, a partner and director of sustainable investing at Prime Capital Investment Advisors company Earth Equity Advisors, echoed those concerns.
"An ESG portfolio that reduces its exposure to ExxonMobil is less bad. One that eliminates it entirely is better. But one that replaces it with First Solar is actually sustainable," Krull told Cheddar News.
Krull recommended sustainable investors eliminate fossil fuel companies or funds that contain them from their portfolios altogether, but other sectors aren't so cut and dried. Mining operations, for example, can mine fossil fuels, but they can also mine minerals for electric vehicle batteries. As for what goes into a green portfolio, Krull recommended alternative energy companies that focus on solar, wind, and geothermal power, as well as less obvious choices like insurance companies that consider climate risk and biotech that improves health outcomes.
"I like to call traditional index investing rearview mirror investing because it's really about investing in where we've been or where the economy has been. Whereas sustainable investing is where the economy is going," Krull said.
Being a smart and sustainable investor can require a great deal of critical thinking and research, and Krull recommended tools like Fossil Free Funds and Invest Your Values to help sort through the noise.
Ultimately, investing is about generating a return. When it comes to sustainable investing, Krull also suggested that investors think long term.
"Because sustainable investing is about investing for the future, [investments are] not always going to be up, especially when value investing is in style," he said. "Over the long term, it should play out. But in short terms, just like we're dealing with right now over the last 12 to 18 months, that value has been in style, you probably will underperform a little bit."
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Stocks closed lower Thursday, with the Nasdaq falling close to 2.5% for its worst day since September. Tech stocks dragged on the index, which is down nearly 3% for the week. Investors are continuing to respond to the Federal Reserve's taper timeline and interest rate announcement, as well as keeping an eye on the COVID-19 omicron variant as cases spike in major metropolitan areas like New York. David Sadkin, president and partner at Bel Air Investment Advisors, joins Cheddar News' Closing Bell to discuss.
There's a new ETF designed to offer investors exposure to 'meme stocks.' Roundhill Investments launched it earlier this month and says the ETF is the first that is explicitly designed to track the performance of meme stocks. Roundhill Investments Vice President of Research Mario Stefanidis joins Cheddar News' Closing Bell to discuss.
Jared Madfes, Partner at Tribe Capital, joins Cheddar's Closing Bell, where he says crypto investors should continue to focus on the long-term despite the recent price boost in the hours following Wednesday's Fed decision.
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Markets jumped on the Federal Reserve's announcement it would speed up its tapering timeline and institute three rate hikes in 2022 — but that was before the COVID-19 omicron variant seemed to be a threat. This announcement also comes as it took the central bank a number of weeks to recognize that inflation does not seem to be transitory as consumers feel price pressure across the board. Bill Adams, senior economist at PNC, joins Cheddar News' Closing Bell to discuss the Fed's moves, how the ongoing pandemic could continue to impact the economy, the Fed's dual mandate, and more.
Delta Air Lines CFO Dan Janki joined Cheddar's Kristen Scholer to talk about the airline's 2022 outlook on its Capital Markets Day as the travel industry recovers from pandemic disruptions. The airline projects a return to profitability next year despite the emergence of the omicron variant during the peak holiday season. Janki said that there had been no impact on domestic travel as of yet, but the company is remaining vigilant for any change. He did note that there had been some international fallout as countries implemented travel restrictions.
Tom Shannon, Bowlero CEO, joined Cheddar to discuss the decision to bring the company to the New York Stock Exchange via a SPAC merger with Isos Acquisition Corporation. Shannon said one of the goals of the public offering is to expand operations internationally, noting that Bowlero has the potential to reach worldwide markets due to the sport's popularity. "Bowling is a global market, and I'll give you an example. In South Korea, there are three million league bowlers and 1,200 bowling centers in South Korea alone," he said.
If you're looking for a date, 2022 might be your year. Online dating platform Bumble is buzzing with dating predictions from its latest survey. Shan Boodram, sex and relationships expert at Bumble, joined Cheddar to discuss some of the findings and what people can expect from the future dating landscape. Some of the results showed that public displays of affection are back on the rise as more people get vaccinated and that more users are opting for alcohol-free first dates. She also explained the trend of "explori-dating," a way that users are attempting to get out of their comfort zone. "People are willing to date outside of their city to get to that," she said.
