How to Invest in Sustainable Assets

Photo by Serge Le Strat on Unsplash

In 1972, the United Nations organized the first environmental conference in Stockholm, Sweden.

Since then, many NGOs and scientific organizations have highlighted the need to establish greener industrial and lifestyle practices to mitigate climate change and pollution.

The most urgent problems to solve are energy production, transportation, and waste management.

Investors that want to participate in solving these problems can invest in sustainable — or green — assets.

Let’s have a look at what these assets are.

Stocks

One of the most straightforward ways to invest in sustainable assets is to invest in companies dealing with ecological issues.

Energy

The planet currently gets most of its energy by burning oil, coal, or gas. This explains why energy production currently emits three-quarters of all greenhouse gas emissions.

Source: Our World in Data

Many companies seek to solve these problems by developing sustainable energy production capacities.

These are:

  • Wind power: the wind activates the blades of the windmill which generates electricity.
  • Solar: cells in the panel transform sunlight into electricity.
  • Bioenergy: while bioenergy is not neutral in CO2, it is considered a sustainable way of producing energy because it emits less CO2 than oil or gas. Bioenergy generates heat when biomass (plants or wood) is burned.
  • Geothermal energy: geothermal energy is created in regions located in between tectonic plates. The steam and hot water are collected underground and generate electricity.
  • Hydropower: hydropower is generated in dams. The release of water from the damn activates a turbine which creates energy.
  • Marine energy: marine energy seeks to transform the energy from waves and tides into electricity. It’s the most recent way of creating energy.

Transportation

The challenges of sustainable transportation are mainly tied to the problem of energy.

Electric vehicles pollute, so many car companies are currently shifting from combustion engine cars production to electric engine cars production.

There are still many problems to solve for electric cars: battery life (how long can you drive before you need to recharge), battery capacity retention (how long can you use the battery before it needs to be changed), recycling, speed of charge, etc.

These problems are often tackled by startups.

Startups

Startups are particularly suitable for green investments since a startup’s mission is to solve a problem that has never been solved before.

In some recent industries such as marine energy, there are more startups working at solving problems than there are established companies.

Energy

One of the main problems in sustainable energy production is the efficiency of solar cells. The current efficiency of residential solar panel cells does not go over 20%.

Photo by Jeremy Bezanger on Unsplash

It means that when the sun shines on the panel, only 20% of its energy is converted into electricity.

Startups work on increasing the efficiency of solar cells so that they can be 100% efficient.

Another problem that startups try to solve is the harnessing of marine energy.

Marine energy is recent science. The first research facility was established in the UK in 2003.

We estimate that marine energy could generate 20,000 to 80,000 terawatt-hours per year, which makes it a worthwhile research project.

Transport

Startups in the transport sector mainly work at electrifying bikes, cars, and planes.

They also do research on better batteries and better battery cells that can save more electricity and have a longer lifespan.

Waste Management

Other startups work on filtering the CO2 off the air to slow down and reverse the effects of climate change.

This is an interesting mid-term solution that will give the world more time to move from fossil fuel to sustainable energy.

Another big problem related to waste management is the lack of recycling, particularly for plastic.

Out of the 300 million tons of plastic produced each year, at least 14 million tons end up in the oceans.

These are only a few ideas of investments that will help make the world a better place.

Green Bonds

Green bonds are bonds issued to finance climate or sustainability-related projects.

They work like corporate or government bonds, except that the bondholder receives the guarantee that his or her money will be used to help the planet.

More than $260 billion of green bonds were issued in the world in 2020, and this number keeps on increasing every year.

Green bonds finance windmill farms, recycling plants, electric buses for public transportation, and similar projects.

Farmland

While farmland has the reputation to be an important pollution emitter, it all comes down to how the land is farmed.

Organic farming designates sustainable farming practices employing natural fertilizers and crop rotations among others. It safeguards the quality of the land and pollutes much less than traditional farming.

This is why the EU Commission has launched several initiatives to support organic farming in the EU. Over time, the European environment agency has measured a sharp decrease in GHG emissions and in pesticide use.

Today, organic farming makes up 9.1% of all farming in the EU. Estonia is the second country that practices organic farming the most where more than 20% of the farmland is farmed organically.

Today, eight European countries make up the top 10 most sustainable countries for farming (along with Canada and Japan).

Source: EU Commission

Conclusion

As the world is shifting from carbon-based energy to sustainable energy, the number of green investment options is growing.

LandEx enables you to get started with your land investment by giving you the opportunity to invest in land, from €10 onward.

Visit landex.ai today, and become a land investor.

The content of LandEx’s blog is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice. Nothing contained on the LandEx Medium blog constitutes a solicitation, recommendation, endorsement, or offer by LandEx or any third party service provider to buy or sell any financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

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LandEx is the first European investment platform enabling any EU retail investors to invest in farmland. Find out more at https://landex.ai