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What Is Green Investing?

Lumara Lee
Lumara Lee

Green investing is the practice of investing in companies that are producing “green” technologies that are good for the environment or that recycle and employ other environmentally responsible activities. A person who is interested in socially responsible investing has the opportunity to support companies that practice energy efficiency, that construct green buildings, produce less waste, and use recycled materials in their manufacturing or shipping processes. Companies that employ practices such as green purchasing, which means buying products that have limited environmental impact, and green chemistry, which means it doesn't use any chemicals that have an adverse impact on the environment, make a company attractive for green investing. Some popular green technologies include solar, wind, and biodiesel.

There are various vehicles for green investing. The green investor can buy stock in an individual company, or he can buy green mutual funds, exchange-traded funds, or bonds. Each of these investment vehicles has pros and cons, and it is recommended that the prospective investor seek the counsel of a professional financial adviser to see which investment or combination of investments will create the most profitable green portfolio.

Biodiesel may present an alternative to traditional diesel fuel.
Biodiesel may present an alternative to traditional diesel fuel.

A mutual fund is a group of investments which may include stocks, bonds, and other assets overseen by a manager whose goal is to make the most money for the investors. An exchange-traded fund can be diversified like a mutual fund, but is traded like stock. The advantage of mutual funds and exchange-traded funds are the diversification they offer the investor. It is possible for an investor to buy as little as one share of exchange-traded funds, which can also be purchased on margin.

Green bonds provide capital for companies that are developing environmentally friendly technologies or employing green practices. Bonds retain their value and pay a guaranteed rate of interest. Any interest earned on government bonds is tax-free.

Wind power is a clean energy source.
Wind power is a clean energy source.

The person who is concerned about the environment and wants to invest only in companies that share the same concerns has numerous choices and isn't limited to solar and wind power. Organic foods, electric vehicles, geothermal power, clean water, and biofuels are just a few of the many green investing opportunities. Additionally, there are numerous environmental practices a company can employ to become a good choice for green investing. Recycling water, metals, paper, and glass; eliminating hazardous waste from the manufacturing process; and other eco-friendly activities are sustainable practices that can ultimately lead to a cleaner environment.

Solar panels are one popular green energy investment.
Solar panels are one popular green energy investment.

Green investing in products like the best plant-based laundry sheets, for example, goes beyond just the environmental impact – it also has the power to improve lives. By supporting sustainable and eco-friendly solutions, you contribute to a cleaner planet and healthier living conditions. Plant-based laundry sheets not only reduce harmful chemicals released into the environment but also prioritize the well-being of your family and community.

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Discussion Comments


I am curious if anyone knows of any good sources to find companies that are considered "green". I agree with the previous posts that this is something to keep an eye on, and I would like to see if there are any companies that look like they might take of in the upcoming years.

The article mentions organic foods. With the recent push to restructure food labels and dietary guidelines, it seems like this might be a growing field, as well.

Maybe it already exists and I haven't found it, but a good idea for one of the mutual fund companies like Vanguard or Fidelity or someone might be to start a mutual fund of green companies that are set up to be successful. I don't know if it would work or not, but it's something to think about.


Like the article mentions, green investing doesn't just have to be with companies that are developing energy efficient technologies. You can still invest in normal companies that are devoted to protecting the environment.

Where we are right now, I think a lot of people say they think the environment is important, but they don't show it with the say they spend and invest their money. The movement is growing, though, so I think in the upcoming years we'll start to see companies being forced to go green, because a lot of consumers will stop buying their products. I think a lot of that also has to do with the new generation of adults who have grown up hearing and reading about the importance of the environment.


@Izzy78 - I am with you. From what I have heard, I think new fuel technologies will be a big deal pretty soon. After all, we can't keep running on coal and gasoline forever. I think a lot of the companies that are developing these ideas are still private, though, so it isn't possible to invest with them quite yet. I figure a lot of that has to do with there not being a lot of demand as well as the fact that some of the production methods aren't perfect.

With all of these green companies, what I think a lot of people are forgetting is that many of them will end up failing. Just because a company is first out of the gate with certain ideas doesn't mean they will always do it best into the future. Just look at AOL as an example. Whenever people invest in these stocks once they become available, they still need to do their research and try to pick the companies with the best plans for success.


I think investing in green companies will be the next way to make a lot of money, just like investing in technology companies was in the late 90s. There are a lot of companies that are inventing a lot of things that I think will be pretty ubiquitous in our society pretty soon.

One of the things I have heard a lot about and have tried to keep up to date on is biofuels. Turning corn into ethanol is the most common biofuel, but the government has put a limit on how much can be produced, so companies are looking for different ways to turn things like grasses and trees into feasible fuel sources. Once they find a way to do it efficiently, I think a lot of the companies will take off.

I'm sure there are several other companies I am not familiar with that are doing other things related to the environment.

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    • Biodiesel may present an alternative to traditional diesel fuel.
      By: Anna Lurye
      Biodiesel may present an alternative to traditional diesel fuel.
    • Wind power is a clean energy source.
      By: sanderstock
      Wind power is a clean energy source.
    • Solar panels are one popular green energy investment.
      By: anyaivanova
      Solar panels are one popular green energy investment.