What Is Sustainable Investing? How You Can Make Money and Tackle Climate Change

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Green investment funds promise to help tackle issues like climate change—and earn a nice profit for shareholders. But they don't all live up to the hype.

This year's record-breaking heat waves, massive storms and damaging wildfires have made the dangers of climate change clearer, in a more personal way, than ever before. Roughly three-quarters of Americans now say they've been affected by extreme weather in the past five years, a near 20-point jump in five months, and the majority believe climate change is at least partly to blame, according to a poll last month from The Associated Press-NORC Center for Public Affairs Research.

Most ESG funds, in fact, made less money than their traditional counterparts last year, in part because they held fewer shares of the market's big winners, such as energy companies Occidental Petroleum and Exxon, which produce fossil fuels. But looking back at the past three-and five-year periods, sustainable funds generally did better than conventional funds, Morningstar data shows. And the funds are looking good again lately too: The S&P 500 ESG Index has posted a total return of 13.

Source: News Formal (newsformal.com)

 

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