By Thomas Kostigen
Unless you block the news, social media, blog posts, and contact with the outside world this week, you’ll know it’s Earth Day on April 22d. Fanfare includes a climate summit hosted by the White House, network television specials, virtual events, and numerous other activities meant to incite action and advocacy.
You’ll likely be told to use less fossil fuel energy, recycle more, compost, and to buy an electric vehicle, among other sustainable practices. Investors should pay close attention. Within the haystack of these environmental recommendations and prognostications may very well be the next great investment idea.
To be sure, green infrastructure will be a key component of a sustainable future, as will alternative energy. Note the type of infrastructure that is being discussed. Building and transportation may receive their fair share of green budgets, but water infrastructure should be looked at for investments opportunities, as well. The West is facing another mega drought this summer and wildfire season is expected to be particularly damaging. Companies are amping up their resilience programs to proactively combat water shortages and to guard against fires.
Water funds could receive additional capital as these investment vehicles trade on the supply and demand for that resource. Backup office data storage and the like play a big role when it comes to resiliency, too. There is a multi billion-dollar business built around office relocation services that is often overlooked.
New energy storage, of course, is getting a great deal of attention because solar, wind, and hydropower run on real time power production. Storage via lithium and other capabilities is a game changer and this will likely drive the EV future. You may also hear a lot about hydrogen as an energy source. Green hydrogen is being eyed as a fossil fuel replacement by large utilities in Europe. And the trend is sure to hit US shores.
Still, as fossil fuel use and plastic consumption will lap up most of the Earth Day coverage, there are two other sectors that shouldn’t be ignored: agriculture and oceans. Oracle and IBM are betting big on weather data that feeds into what is being called “ag tech.” Artificial intelligence and robotics have invaded the farming industry with aims of efficiency. More data allows farms to be managed better and for yields to increase. That can put more food on our tables. And seafood is also reaping the benefits of technology. Efficiencies in shipping and fishing can help put the world on a more sustainable path.
Earth Day has been around for more than 50 years now and the attention inevitably turns toward the problems the world is experiencing, whether via fossil fuel use and climate change, or environmental degradation by deforestation, etc. It’s time to look at Earth Day from another perspective: opportunity. What are the solutions that are going to drive the big shift toward sustainability?
A good financial advisor can certainly steer you toward the best-in-class sustainable funds and companies. Such professional advice is well worth getting. A recent global survey published in the Financial Times found the majority of people are unable to identify which lifestyle decisions are the most effective at limiting their carbon footprint. “The average person who took part in the survey almost consistently ranked an avoidance of tumble dryers and a switch to low-energy lightbulbs as more effective ways to reduce individual emissions — rather than not owning a car or choosing a plant-based diet,” the survey showed. In reality, transportation and foods are the bigger savers.
Earth Day is an opportunity to educate people about climate change and the environment. But it’s also an opportunity to learn which solutions are likely to drive the sustainable future. Invest in them.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.