New Investment Methodologies: the Green Economy
After several years of protests and strikes by movements for environmental justice against climate change and global warming, governments have finally accepted to consider these issues as crucial and a high priority for their political Agenda.
The increasingly massive use of renewable energies, sustainable development for progressively scarce resources and the reduction of polluting emissions embody the central focus and objective for both human health and the Earth’s future.
The world’s investments represent one of the sectors most exposed to the volatility of the times and, consequently, it should not be surprising in this historical period that the so-called Green Economy is strongly affirming itself, which allows the investor to reconcile both the purely personal economic aspect and the sustainability of the surrounding environment.
What is Green Economy?
This term indicates a specific economic choice that adopts sustainable development and avoids damaging the environment. It reduces environmental risks by limiting air pollution, increasing renewable energy sources, enhancing recycling to minimize waste, and protecting the terrestrial biosystem.
How can you invest in the Green Economy?
There are two large areas where it is possible to invest: direct, in which all revenues are directly linked to green activities, or indirect, in which one invests in activities that do not have their basic focus on ecology but they share the modus operandi.
The main investment methods are as follows:
– Securities that are listed on the stock exchange.
– Funds: these are diversified investment funds in which the investor can freely choose the market that best suits his needs.
– Pension plans: they represent a novelty on the market and allow you to obtain advantages on savings given retirement acting in tandem with environmental conservation.
– Green bonds: Issued for the first time in 2007 by the World Bank, they currently have a portfolio of approximately $ 750 billion, demonstrating how broad the interest in certain topics is.
What are the risks?
In the field of investments, there is no precise law for which there are no risks: they can be external, such as a sudden economic recession or even a decrease in interest in environmental issues, or of an internal nature, such as it can be a marked decrease in investor earnings.
Even the insurance world certainly did not stay aside, and Generali has created five investment portfolios entirely dedicated to the climate emergency and corporate sustainability:
– Generali Responsible Consumption
– Generali Sustainable Growth
– Generali Equal Opportunities
– Generali Health and Wellness
– Generali Climate Protection.
As is well-known, environmental alteration affects the Gross Domestic Product of a nation- as the same GDP decreases due to environmental effects- and has already caused direct impacts on various sectors such as agriculture, fishing, tourism, and public health. Therefore, Green Economy is crucial not improve human well-being but it also benefits the economy of a country.
For more information, do not hesitate to contact us!