Do your financial investments align with your values? Are your investments or other financial actions supporting activities that contribute to the climate emergency (such as extractive activity of fossil fuel companies), or are your investments supporting the clean energy transition?

First, some relatively new terms:

• ESG = a system to measure the sustainability of a company or investment in three categories: Environmental, Social, and Governance. ESG is also referred to as socially responsible (SR) investing, sustainable investing, or impact investing. 

• ETF = an exchange-traded fund; “ETFs are similar to mutual funds, except that ETFs tend to have lower expenses, have no minimum holding period, and are bought and sold at any point during a trading session — not just at the end of the day.” (Investopedia).

• Green Bond = a type of sustainable fixed income investment that provides funds for climate and environmental projects undertaken by governments, utilities, or others (i.e., not for company equity purposes). Green bonds can have similar credit ratings to other bond issues (Investopedia). Green bonds, and funds that specialize in them, are a relatively new development.

A large and growing number of mutual funds and ETFs with environmentally and/or socially responsible investing mandates are now available, in addition to individual stocks that may qualify as ESG investing vehicles.

Like all financial investments, sustainable investments come with risks and are not guaranteed as bank accounts are (to the limits of FDIC provisions). It is important to research climate-friendly investing options (read each prospectus, weigh the risks, evaluate fees) before investing.

Disclaimer: Energize Acton and MassEnergize are not investment advisers, nor do we provide financial planning, legal, or tax advice. Nothing in our communications or materials shall constitute or be construed as investment advice or investment recommendations.