július 21, 2022

Arabian Business

Green investments are critical for long-term economic growth

Investing in green growth can be both sustainable and profitable

Contrary to popular belief, the path towards a sustainable future can be made profitable through conscious investments. There is a growing movement towards more environmentally and socially conscious investing.

But more needs to be done to fully harness the incredible potential green investments have, to positively impact our environment as well as our economies. Part of the reason for this is that the fight against climate change is often seen as being at odds with economic growth. This couldn’t be further from the truth.

With the growing awareness of the importance of environmental protection, more and more people are looking for ways to invest in companies that are working towards sustainable practices.

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Investing in green companies and sustainable stocks is not only good for the environment but can also be a source of steady, financially lucrative passive income. A recent study by the International Renewable Energy Agency (IRENA) found that every dollar invested in renewable energy brings three dollars or more in return or in the form of savings. Furthermore, these investments facilitate in creating more jobs than traditional investments.

Green investments can have positive and profitable outcomes for individuals as well as economies across the globe. When people invest in green stocks, they are supporting companies that are working to create a cleaner, more sustainable future. This also helps in creating more jobs in the clean energy sector and support growth of the green economy, which is one of the fastest growing sectors in the world.

Green investments also lead to increased tax revenues for governments and reduced expenditure on healthcare and environmental protection. Moreover, green investments can benefit economies by stimulating innovation and creating new industries. For example, when a country invests in renewable energy, it reduces its dependence on imported fossil fuels, which can save the country a lot of money.

Spending on green energy is no longer just about do-goodism; it is now an essential part of any smart investment portfolio. Carbon-conscious investors are increasingly looking for opportunities to invest in companies that are helping to mitigate this grave issue.

These companies are developing innovative technologies to reduce carbon footprint, and they are positioned to thrive in a low-carbon economy. One of the most important aspects of green investing is its focus on environmental, social, and governance (ESG) criteria. A growing body of evidence suggests that companies with strong ESG practices outperform those without them over the long term.

Sustainable companies are also better equipped to deal with environmental regulations and other challenges that might arise in the future. Moreover, an increasing number of institutional investors, such as pension funds and insurance companies, are beginning to incorporate ESG criteria into their investment decision-making process.

This is because they recognise that sustainable investing can help them manage risk and achieve better financial returns in the long term. When we invest in these companies, we are supporting the transition to a sustainable future. Many clean energy companies are doing quite well financially and investing in them can lead to lucrative financial returns.

The power of communities plays a critical role here. Around the world, countries and companies are starting to realise the importance of community-centric approaches to tackle unsustainable industrial practices.

In fact, many experts have argued that this is a necessary requirement to address the problem effectively. SunMoney, for example, runs the world’s most extensive global Community Solar Power Program, and is backed by a bottom-up business model that is both effective and engaging. This only reinforces the fact that individuals, businesses, and governments must all play a role in making this happen.

Green investments are a crucial step that offers everyone an opportunity to take action on climate change

By supporting green initiatives through their own actions and by investing in green companies, people can help create a market for renewable energy and other sustainable solutions on their path to reducing our collective carbon footprint.

Governments worldwide also have a vital role in the community-centric approach to combat climate change. They can offer incentives for businesses to invest in renewable energy and sustainable technologies.

The growing importance of green investments is a positive sign that things are starting to change. But there’s still a long way to go before we are where we need to be.

Our planet is in peril and we must act now to save it from the destruction caused by our own actions. Green investments are a crucial step that offers everyone an opportunity to take action on climate change, do good for their economy and their investment portfolios.

Zoltan Rendes, partner and chief marketing officer of SunMoney Solar Group