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."
Dimitri Dadiomov, CEO and Co-Founder of Modern Treasury, joins Cheddar News' Closing Bell, where he elaborates on how his firm plans to deploy its latest dose of funding and how Modern Treasury is working with banking giants like JPMorgan and Citi to help businesses move money more confidently.
Just a week after talks of him starting his own social media platform, Tesla CEO Elon Musk purchased a 9.2 percent stake in Twitter. The stock by resulted in a price surge for both Twitter and Tesla stocks, but questions are swirling about how much of an active stake this will be for the controversial figure who's had a fraught relationship with the platform over the years. Dan Ives, the managing director of equity research at Wedbush, joined Cheddar News to discuss. "I think this is a start of what's gonna really be a soap opera with Musk, either getting on the board or forcing significant strategic changes at Twitter," he noted.
Bees are responsible for the bulk of fruit and vegetable pollination — and they're negatively being affected by climate change. Tech startup Beewise is offering a solution with artificial intelligence to create robotic, autonomous hives to help the vulnerable bee populations. Saar Safra, co-founder & CEO, joined Cheddar News to talk about the company's recent $80 million to help make this project possible. "Our solution is not only hardware," he said. "Its software and biology all in one device. That's the challenge, and that's what sets us apart."
Space tourism continues to be generating buzz after the most recent Blue Origin launch. Two of its passengers made history as the first married couple to travel to space. The couple, Marc Hagle, CEO at Tricor, and Sharon Hagle, CEO at Spacekids Global, joined Cheddar News fresh off of their trip to talk about their experience and future space travel plans. "If there is a Santa Claus, we’ll have the opportunity to fly with Virgin Galactic, and maybe we'll have the opportunity to fly with SpaceX," said Marc Hagle, followed by Sharon explaining they had already signed up with Virgin Galactic about 15 years ago.
Mark Steber, chief tax information officer at Jackson Hewitt, joins Cheddar News to talk about what you need to know before filing your taxes this year.
Caleb Silver, Editor in Chief at Investopedia, breaks down which industries have the most pricing power and how rising inflation may impact margins in this upcoming corporate earnings release. "They have pricing power, no doubt about it, and consumers were feeling pretty flush last year, by and large, the personal savings rate in 2021 hit an all-time high, the personal income levels hit an all time high," he said. "Why? We had a lot of government money coming to consumers via those checks. So there was part of that, and we weren't spending in the first half of the year like we wanted to."
Joan Sutton, CEO & founding partner of CBD skincare company 707 Flora, joins Cheddar News to discuss her clean beauty brand powered by full-spectrum hemp.
