Addressing Climate Change with Investment Choices
Climate change is everyone’s business, including world leaders who met late in 2015 at a conference in Paris to discuss both problems and solutions related to climate change. Impact is being felt globally from the severity of weather-related events to droughts that are impacting farm productivity in multiple regions. Political leaders are turning to scientists and legislators to address potential manufacturing regulations that would reduce carbon emissions and also for technological solutions for alternative power sources.
Corporate executives are also feeling the pressure to create processes and implement strategies that create a more stable environment through becoming more environmentally friendly. Incentives are being proposed to encourage companies to reduce carbon footprints, and penalties for not adhering to tighter emission standards are being considered as well. The intent is to establish commitment from global leaders so that every developed or developing nation shares in the effort to level the playing field financially.
Such commitments and incentives bring with them the opportunity for investors and day traders to realize gains through leveraging their portfolios toward those businesses participating in the solutions and focusing on climate change concerns including:
- Alternative energy businesses that stand to benefit from the movement toward a cleaner environment.
- Remaining vigilant to changes in emission requirements and regulations that signal corporate investment in new technologies.
- Note news of companies being pressured to reduce their impact on climate change, such as those heavily reliant on fossil fuels.
Those organizations will be among the first to migrate toward new methodologies to avoid negative press and significant financial penalties. Evaluate their strategy for reductions and let that provide guidance for your investment opportunities. Where corporate money is being spent is where traders should make their investments.
Another opportunity will be to gauge what incentives are being provided to alternative energy sources in the way of government loans and/or grants. This is another chance to follow the money to the companies likely to benefit from such government participation. With many countries becoming involved with climate change issues this will have global impact resulting in corresponding global opportunities.
Making Your Investment Strategy Address Climate Change
Traders and investors focused on combating climate change will increase their financial position at the same time. Sending a message to global markets by investing in such companies as those that work in renewable energy sources and sustainable environmental products will not go unnoticed. Investors own a considerable share in public companies such that a shift away from those businesses will generate a wakeup call to management.
Additional statements can be made by investors that sell off shares in companies heavily vested in producing high-emission products such as coal or other fossil fuels. Longer-term shareholders can make their interests known by voting proxies toward board members who express a commitment to reduction of carbon footprints or potential pollution by their facilities.
Keeping abreast of news and global developments that address climate change is important when considering investments that will combat business impact on the environment while aligning with your investment strategy.
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