When it comes to investing in environmentally sustainable initiatives, we have an abundance of choices. For many, there is too much choice which makes investing in ESG - Environmental, Social & Governance (or even just the "E", the "S" or the "G" alone) a daunting task. And there are many ways to slice and dice the market into sustainability categories.
Here's a way to simplify your decision. Starting with the "E" (environmental category), you can pick between companies or funds of companies that are classified as either innovators, mitigators or good actors.
An example of an innovator is a provider of technologies, products, or processes that help corporations, individuals, or governments to reduce their carbon footprint. Such examples include solar, wind, hydrogen or wave-sourced energy providers. Innovators are inventing the business models and industries of the future.
Mitigators are technology, products, or processes that help to mitigate/offset the impact of climate change, and include methane reduction, water resource management and recycling. Others provide technology, services, or tools to help companies adapt to the impacts of global warming.
Source: Dominion Energy (ZEVAC captures, recycles and re-uses methane)
Finally, good actors are companies in higher-emitting industries with strong commitments to carbon neutrality incorporated into their corporate strategy or mission statements. Such names include specific oil and gas drillers, metals and mining and airlines.
How do you find these companies and funds? Its probably time consuming to pick and chose the best investment for your portfolio. Ask your financial advisor or consultant for assistance and let him or her do the work for you.
After all, we're all in this together.