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."
The La Niña effect in the Pacific Ocean is leading to rough forecasts this winter in the Northern Hemisphere. Suketu Gandhi, supply chain partner at Kearney, joined Cheddar to discuss the likelihood food prices and shipping get disrupted amid the meteorological event especially considering existing supply chain problems. "The global supply chains are going to be truly disrupted with La Niña," he said, pointing to COVID-19 and political changes as factors. "So, the Jenga called 'supply chain' is just one brick away from falling down completely." In 2011, the last significant La Niña year, food prices reached record highs.
Emily Tisch Sussman, senior advisor at Paid Leave US, joined Cheddar's "Between Bells" to discuss paid leave being stripped from the latest budget bill and why it is crucial for parents to have paid time off. Sussman said the pandemic, in particular, highlighted the disparity between women, who left the work force in droves to care for family, and men who continue to work and be rehired as impacted sectors of the economy return.
Amid weeks of recent controversy, Facebook this week announced it would be changing its corporate name to Meta as it pivots to the metaverse and virtual reality products. Dan Ives, Managing Director of Equity Research at Wedbush Securities, joins Cheddar News' Closing Bell to discuss the rebrand, whether chief Mark Zuckerberg can separate his identity from the company, and what the rebrand means for shareholders.
The Dow, S&P, and Nasdaq each ended Friday's session at a record high as stocks rallied into the green. Chris Vecchio, Senior Analyst at DailyFX, joins Cheddar News' Closing Bell, where he says this was an 'October to remember' for Wall Street.
Cryptocurrency platform Blockchain.com launched margin trading on its exchange earlier this month. The company's Chief Business Officer, Lane Kasselman, joins Cheddar News' Closing Bell, where he discusses how margin trading works in the crypto space and what users will be able to do on the platform.
Apple reported strong fourth quarter earnings, but sales fell below expectations. CEO Tim Cook said chip shortages and manufacturing delays cost the company $6 billion. The issues have led to the newly-launched iPhone 13 Pro being in short supply around the world, as well as to back orders for Apple's new Macbook Pro. Exponential Investment Partners Managing Partner Kevin Riley joined Cheddar News' Closing Bell to discuss.
Electric bike company Dance recently raised $19.4 million, just weeks after rolling out its e-bike subscription service in Berlin. Dance allows users to subscribe to use an e-bike for around €79, or about $91, a month. Dance says its subscription model allows the company to reuse and refurbish its products, and further its mission to build more sustainable and livable cities. Dance founder and CEO Eric Quidenus-Wahlforss joined Cheddar News' Closing Bell to discuss.
Project management platform ClickUp raised $400 million in Series C funding this week, and founder and CEO Zeb Evans joined Cheddar's "Closing Bell" to talk about taking the added funds to help make the workplace more efficient by being a one-stop-shop for office needs. He also discussed a growing demand for his company's services during the pandemic as companies seek solutions to keep their employees on the same page.
How much real money would you pay for a virtual plot of land? Developing technology is introducing everyone in the real world to new, virtual worlds, like Decentraland. In this metaverse economy, users are buying virtual real estate at high value – and it’s not just the average Joe that’s looking to invest. Company's like Facebook are betting big.
The dating app Hinge says it's taking online dating to the next level by introducing a voice prompt feature for profiles. Michelle Parsons, chief product officer, joined Cheddar to talk about providing the question prompts for users to make accounts more personable in their own voice. She also went into how much the pandemic has had an impact on engagement.
