Socially Responsible Investing (SRI)
Investors around the globe are inclined to make investment decisions that generate both positive financial returns and social impact. Socially Responsible Investing (SRI) also known as social investment, green investing or ethical investing has become the new norm in the investing world.
With the rapid climate change and environment-related impacts, investors have started applying ethical and environmental screens to their investments. One of the more popular investment options within the purview of SRI is investing in renewable energy companies and avoiding avenues that generate negative impact to the environment i.e. fossil-fuel based industries.
What can we expect from renewable energy investments?
● The first and foremost benefit is the avoidance of health hazards with clean air through the adoption of renewable sources. Air pollution has become a critical issue in many developed and developing nations with the spread of power-reliant lifestyle. Reports suggest, in the developing world, up to 2.9 billion people rely on energy generated through non-renewable energy sources of wood, coal, and charcoal for cooking and heating homes. Investing in technologies and stocks of solar and other renewable sources can greatly improve the quality of our environment.
● In the long run, with renewable sources we can reduce the impacts associated with greenhouse gas emissions i.e. environmental pollution and climate change. Conventional power sources generate around 2.2 pounds of CO2 for every kilowatt-hour of electricity and solar panels and wind turbines operate at net zero CO2 emissions.
● Renewables are slowly but surely becoming accessible to communities even in remote locations and are now locally available energy sources. Stand-alone and mini-grid renewable energy solutions provide more energy security by providing a more resilient power supply option in remote parcels of the world.
● Over the last decade, the renewable energy sector has been growing exponentially, providing growth and job opportunities in manufacturing, installation and other areas of operation. According to the Environmental and Energy Study Institute (EESI) estimates, the renewables sector employed 11 million people worldwide in 2018 (700,000 more than 2017). Across the globe, solar PV continues to provide the highest level employment opportunities in the renewable energy sector, with around 3,650,000 jobs.
The rapid growth we are seeing in the renewable energy sector and the interest we are seeing among investors in a SRI investment approach are largely a result of the increased capabilities of companies to raise investments and provide market competitive returns.
