When most investors think of “green”, they are thinking of the good ol’ greenback, not carbon reduction and alternative fuels. But more and more people are beginning to look into the ecological friendliness of the companies in which they invest. For some, this is motivated by ideology and can been seen as an extension of “ethical investing”, while others simply seek to capitalize on a growing trend.
Whether your interest is for philosophical or for purely pragmatic reasons, there are a number of promising options available. Here are MoneyGrubbingLawyer’s favourite green investments:
- Zenn Motor Company - Zenn (ZNN-X) is Canada’s leading electric vehicle manufacturer. It currently produces a two-seat electric car that tops out at 40 km/h and has a range of about 50 kilometers. The Zenn is permitted as a low speed vehicle in 45 US states, but only in BC, Ontario and Quebec in Canada, although there is hope that additional approvals will be in the future. The company also has the CityZenn in the works, a fully electric vehicle with a top speed of about 125 km/h and a range of up to 400 kilometers. While Zenn has yet to turn a profit, it is on the cutting edge of a rapidly growing market.
- Suntech Power Holdings Co. Ltd. - China-based Suntech (STP-N) is one of the world’s leading manufacturers of solar cells. Suntech has had some ups and downs in the past year, but it is showing strong growth and some analysts predict big things.
- Cleantech Index - Don’t want to try to cherry pick green companies? Just pick up the Cleantech Index ETF (PZD-A), comprised of 76 green tech companies from around the world (although it is weighted towards US operations). PZD has performed well and has reasonable management fees (0.60%), although it is somewhat volatile.
Do you make a point of investing in green companies, or are you driven solely by returns?
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{ 4 comments… read them below or add one }
I’m all for environmentally sound technology, but I see more and more companies proclaiming their greenness as a means of marketing and little more.
http://simpledebtfreefinance.com/my-credit-card-company-is-going-green/
As for green/alternative/renewable energy and investing, I prefer the wait and see approach. Many of these companies are not profitable, and very speculative.
Thanks for the recommendations. I like to invest in green companies for the same reasons I won’t invest in tobacco companies. Some things are worth encouraging, others are worth discouraging.
Joe, I tend to agree with you that “going green” is as much of a marketing ploy as a true shift in behaviour. It’s good PR, and companies know that. But from an investment point of view, good PR is good business :).
You’re also quite right to point out that green tech is speculative, but I always like to have a small portion of my portfolio in speculative investments (it’s probably the gambler in me). With Zenn in particular, I’ve had the chance to see and drive their car, and I think it’s very, very promising- but I still wouldn’t risk my entire savings on it.
MGL,
I actually think a little speculation is a good thing. As you say, it keeps the gambler in us happy. It also provides capital to the underlying business, as well as exposing the speculator to the opportunity to make a huge profit.
I just think too many people confuse it with investing