In the last few years businesses, individuals and governments are becoming increasingly aware of the environmental issues that affect our planet. This has led to a laser focus on changing how they operate to ensure they become more sustainable, through means such as reducing carbon emissions, protecting vulnerable ecosystems and more.
This awareness is also becoming important at an investor level too, so investors can understand the impacts of their investments on the environment. The easiest way to do this is through ESG-focused portfolios. ESG (Environmental, Social and (Corporate) Governance) is a score that helps investors understand the impact of their investments on the environment and whether they fall in-line with their ethos. You can read more about it here.
With that in mind, this article delves into five main green or eco-friendly strategies that companies can do to help the environment, giving you some more awareness for what to look out for when determining whether to add an investment asset class or company to your portfolio.
1) Moving to eco-agriculture
A key to having a sustainable agricultural institution is prioritising the environment, which includes:
- Looking after animals the right way.
- Checking to make sure the soil is healthy.
- Ensuring you are not negatively impacting local communities.
- Using tactics to safeguard the land whilst meeting the needs of those populations dependent on the food being produced.
To meet these objectives, a sustainable agricultural institution will often recycle animal/crop waste, use little to no pesticides, rotate crops to help diversify the various nutrients in the soil, and rewild to enhance biodiversity and help neighbouring ecosystems. Farms across the globe are currently using these methods to help their environments.
In addition, institutions such as mycoprotein production sites and hydroponic gardens are aiding in limiting the amount of land required to produce the needed food, hopefully ensuring that populations have access to the same amount of food whilst protecting natural ecosystems.
2) Electric vehicles
In the last few years, car companies such as Tesla have brought increased attention to electric vehicles, which has motivated more and more people to choose electric cars instead of cars powered by harmful fossil fuels like petrol and diesel. Countries such as China, Canada, Germany, the US and UK, among others, have also tried to encourage their populations to use electric cars. They have done this by creating policies which focus on making electric vehicle ownership cheaper by offering subsidies to buyers of these cars.
Other nations such as Italy, Germany, Netherlands, Sweden and France have national targets and policies to encourage the installation of private and public chargers in urban areas.
3) The prevailing use of renewable energies
Nations across Earth have implemented plans to limit their reliance on fossil fuels and instead turned their attention to getting their energy from renewable sources, like wind power, solar power and hydropower, if feasible.
Looking at the UK, for instance, it has promised to end the practice of generating unabated electricity from fossil fuels by the year 2035. The UK is just one such example of the general use of renewable energies.
Governments have also promised to go further across our planet, stating that they aim to become carbon neutral by the time 2050 rolls around. A great example of a nation moving on from fossil fuels is Costa Rica, which has produced 98% of its electricity, for seven years in a row, from renewable energy sources.
Some other businesses and organisations have switched to renewable energy, ditching fossil fuels. Brands have become conscious of the need to make this change so much that big brands such as Waitrose now use biofuels to power their delivery trucks. Intel has shown their commitment and support for going green by installing nearly 3 million square feet of solar panels across nine countries to help power its business.
4) Green buildings and architecture
Homeowners across the globe have been encouraged by their governments to make alterations to their houses to conserve energy.
Such measures may include:
- Increasing their insulation.
- Inserting double-glazing windows.
- Installing solar panels and heat pumps makes their homes as energy efficient as possible.
Also, over the last few years, what is known as the ‘urban greening’ effect has become popular. Various governments also give local authorities monetary incentives to include plants and foliage in their architectural plans. Vertical forest structures and green facades have become more common in different architectural projects as firms strive to prioritise the environment in their designs.
5) Plastic recycling & alternatives
Single-use plastics are a big environmental issue because they overload landfills and are responsible for our oceans’ contamination. Therefore, making sure plastics are re-used as much as possible is a vital step in limiting the plastic waste that humanity generates.
Scientific institutions, such as Berkley Lab, have attempted to tackle this problem, and research there has led to the development of polydiketoenamine, a multi-purpose plastic polymer. This plastic is different to others as there is no limit on how much of it can be recycled. Polydiketoenamine, or PDK, doesn’t lose its strength or quality, meaning it can keep upcycled and reduce overall plastic production.
Moving on from plastic recycling tactics, another vital way to limit the world’s use of single-use plastics is by focusing on alternatives. For example: developing different substitutes for plastic that offer similar functions, such as being suitable for packaging, which is also recyclable.
A great example of this is VeganBottle, a water bottle created from materials that have comparable structural characteristics to plastics but are entirely biodegradable, like sugar cane. Hopefully, this, combined with recycling plastic, could curtail the number of plastic products that are necessary in the world today.
How can you get started with ESG investing?
Unfortunately, there is no silver bullet in solutions that can help our environment. Companies and people must implement many initiatives to slow and reverse the decline.