3 Common-Sense Investing Principles to Live By
Congress is finally passing a climate bill… but it has been scaled back.
Electric vehicles are close to a tipping point where they become widely adopted… but we still don’t have enough charging stations.
We’re on board with conserving energy… but we still have always-on computers, cranked air conditioners, and long showers.
I could go on and on.
It’s easy to get pessimistic about our future when you look at… well, everything.
Unfortunately, the situation is the same in investing.
Wall Street says it creates funds that focus on progressive environmental, social, and governance (ESG) policies.
But many of those ESG funds rank low when you look at their actual activities.
So what’s an individual investor to do?
If you can’t invest with your values by trusting companies to do the right thing, what can you do?
There’s no one solution to this problem. Just like there’s no one solution to the problems listed earlier in this article.
But for those of you who have been looking for common-sense tips for investing with your values, I’m going to give you a list of investing principles we at Mangrove live by…
1: Clarify your priorities: What’s the most important thing to you in your “doing good while doing well” strategy?
For example, is it diverse management, carbon capture, or low-emissions transportation?
If you can find a company with all three, that’s awesome!
If not, be aware of which things are higher up in your list of priorities.
For example, investing in a company that promotes the circular economy – like eBay – would be higher up on my list of priorities than investing in a company that produces new gadgets – even if it works to offset its emissions.
(Disclaimer: To avoid conflicts of interest, we don’t take financial stakes in companies that we talk about here at Mangrove. So I’m not invested in eBay. But it’s an example of a good company supporting the circular economy.)
2: Use the tools that are out there: I know it can be overwhelming to try to parse out what companies are really doing what.
Not all of us have time to read a million financial filings.
So cut out the boring bits. Use tools that filter stocks on values-based criteria like As You Sow or Sustainalytics.
We can only endorse our own criteria and research. But these two are the most well-reviewed tools we’ve found.
3: Don’t abandon your style: If you’ve been investing for any length of time, you probably have a method of picking stocks that works for you.
And before you ask: Yes, any method that keeps you from losing money is awesome.
You have The Grove stamp of approval. Shine on, you crazy diamond.
So don’t overcomplicate things. Just add your priorities to your own paradigm.
After you’ve applied the filters, screens, parameters, etc., that you normally do, add another: Does this fit with my values?
If yes, go for it!
You’ll have a portfolio full of the best “for the good” stocks in no time.
And while individual investors can’t necessarily change things on their own, all of them working together certainly can.
With our investment dollars, we’re pushing companies toward doing good while doing well.
The but here is that strategies like this take time.
However, by investing now, we’re making our future priorities that much easier to achieve.
In the meantime, on to the news…
Numbers to Know
The reduction in carbon emissions by 2030 thanks to Congress’ climate legislation. The $369 billion clean energy package is the largest climate investment in U.S. history. However, additional measures are needed to achieve President Joe Biden’s goal of cutting emissions 50% by 2030. (CNN)
Number of miles the Tesla Semi’s long-range version can drive on a single charge. CEO Elon Musk tweeted that the electric truck will start shipping by the end of the year. This high-tech vehicle won’t come cheap, though: Its expected base price is $180,000. (InsideEVs)
Number of jobs created in July – more than double the Dow Jones estimate of 258,000. The strong job growth lowers the unemployment rate to 3.5%. It’s now back to its pre-pandemic level and tied for the lowest rate since 1969. (CNBC)
What’s New in Sustainable Investing
Study finds world can switch to 100% renewable energy and earn back its investment in just six years
A new study by Stanford University shows that switching to renewable energy might not be as difficult or costly as you think. According to the study, a clean energy system would reduce our annual energy costs by 63% – resulting in global savings of $11 trillion per year. The study recommends that the world switches to 100% renewable energy by 2035. (My Modern Met)
Canada to tax private jets, cars, yachts as celebrities catch flak for emissions
The Select Luxury Items Tax Act will add a 10% tax on purchases of aircraft or cars that exceed C$100,000. It also taxes boat sales that exceed C$250,000. The new tax comes after a recent report exposed the carbon emissions of celebrities’ private jets. The Canadian government has argued that the tax will discourage the wealthy from buying high-emission vehicles. (Business Insider)
Links We Like
“Across retail categories, many of the most nutritious food categories are also among the most environmentally sustainable.” (PNAS)
“Which are the most sustainable destinations in the U.S.? To find out, we’ve analyzed some of the country’s most visited cities on a range of sustainable factors.” (ParkSleepFly)
“Our future depends on how we choose to live, work, and play as global consumers. How we run our homes, what food we eat, how we get around, how we relax, what we buy, and how we care for our planet.” (The New York Post)