I recently read the book How To Avoid A Climate Disaster. No matter what you think about Bill Gates, the book gives a good overview of what it will take to get (close) to zero CO2e emissions by 2050. In order to limit global warming, we have to reduce the amount of greenhouse gases we emit. If there are too many greenhouse gases in the atmosphere, they trap heat radiation from Earth towards space and it will simply get too warm with extreme effects on our planet, and subsequently, all of us. Knowing about it is one thing, but what really matters is to get going and implement as many of the ideas as possible. Of course no single person can solve this issue alone, but we can all do our parts on a personal level as well as leverage our ambitions with our investments. For me personally, it means investing directly in hydro, wind and solar companies as well as investing passively in a basket of renewable energy companies through a low cost index fund.
The easiest way to invest is through a low cost index fund covering clean energy companies. My ETF of choice is the Global Clean Energy ETF by iShares. There are other interesting options around, but to me this selection of roughly 100 clean energy companies reflects a nice range of renewables around the world. On a global scale, I have a hard time deciding whether to invest in India (Adani), Brazil (Eletrobras), Europe (Iberdrola, Orsted, Vestas, …) or the US (Enphase, First Solar, …). With this global clean energy fund I can easily invest in all of them. So if you want to direct some of your regular investments to this field, it might make sense for you to check out this particular ETF. I read through the annual reports of many of the companies in the index and it is enjoyable to see how many resources are already put to work for a more sustainable energy future.
There are also ways to invest in a more sustainable energy future on a local level outside big public companies. In Austria I follow three of them: I’ve already featured our investment in oekostrom AG since 2014 and we also invested in WEB Windenergie AG which became a worldwide operation in the last years with wind farms and solar projects in North America and Europe. It all started in a small town in Austria’s Waldviertel more than 20 years ago! And there is Windkraft Simonsfeld AG which is another great private company with many individual shareholders.
1. March 2023