Be kind to Mother Earth, and she will be kind to you.
That’s one of the key messages for Earth Day, which happens every year on April 22.
For Earth Day 2020 you might be celebrating with a solitary walk, as the event is likely to be marked by shelter-in-place orders and community closings related to the spread of Covid-19, which has forced people indoors. While the virus has led to more than 170,000 deaths worldwide, the shutdown of the global economy, and massive layoffs, the virus has also reportedly had something of a positive impact on the environment.
With manufacturing, driving, and flying down all over the world, pollution appears to have decreased, at least temporarily. However, experts warn that the eventual recovery could reverse these effects.
Climate change remains an urgent issue despite this temporary improvement, not just with consumers but with companies and industries, as global warming appears to threaten the planet, and the ability to do business.
In November 2019, the International Energy Agency (IEA), a consortium of 30 countries devoted to developing clean and sustainable energy, released its annual energy report. The agency found that demand for energy is likely to increase by 1% annually until 2040.
The report also found growing use of renewable sources of energy such as wind, solar, and hydropower, but it also found the use of nonrenewable resources that create greenhouse gas emissions are rising at a rate that may outweigh any positive impact from renewable energy.
Even the federal government has warned that with the current pace of global warming, the ability to conduct business may be jeopardized. Every four years, the National Oceanic and Atmospheric Administration, a division of the U.S. Department of Commerce, produces something called the National Climate Assessment study.
Among other things, here’s what the most recent report found in 2018:
- By 2050, the average annual temperature of the U.S. could increase by 2.3 degrees.
- The U.S. economy could shrink as much as 10% by the end of the century, losing hundreds of billions of dollars in national and overseas trade, not to mention health costs and disaster relief. Farming and other agriculture will be harmed, through the declining health of livestock, reduced crop yields, and threats to food security, among other things.
- Aging national infrastructure could be further harmed by extreme weather such as flooding, heat waves, and wildfires, leading to threats to the economy, national security, and human health.
“Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century,” the report says.
There are ways to invest in sustainable businesses hoping to have a positive impact on the planet, however.
You may not know it, but sustainability—or creating products in a way that doesn’t harm the planet or people—is even a business niche. Numerous funds rate businesses on something called ESG, or SRI.
That stands for “environmental, social, and governance” and “socially responsible investing.”
ESG and SRI essentially mean that in addition to screening for companies that treat their employees fairly, funds may also examine how ethical businesses are in their treatment of other people, as well as the impact the companies in the portfolio have on the planet.
For example, a fund might include tech companies striving to reduce their carbon footprints by using alternative energy sources. It might also include companies working to provide clean water to people who don’t have it.
In contrast, it might exclude companies that produce fossil fuels that contribute to global warming, or ones whose supply chains may include laborers who work in substandard conditions.
You can find out more about ESG investing here.
As you celebrate Earth Day, remember that all investing involves risk. The value of stocks and other securities can lose money. Stash urges investors to follow the Stash Way, which encourages diversification, regular investing, and investing for the long term.