2023-06-26 02:00:00
Renewable energies occupy an important place in the energy transition and the global economy. Investing in this promising sector can be an opportunity to diversify your portfolio, participate in the fight against climate change and support companies committed to this path. But how to do it concretely? Here are some tips to guide you.
Eco-responsible or sustainable investment funds
Investing in eco-responsible or sustainable investment funds is an interesting option for those who wish to support renewable energies without embarking on direct investments. These funds take into account environmental, social and good governance (ESG) criteria, in addition to financial performance.
Socially Responsible Investment (SRI) : This is an investment approach that incorporates extra-financial considerations, in particular ESG criteria, to guide its choices.
Green funds : These funds favor investments in projects related to the environment and renewable energies.
Solidarity funds : They support social and environmental initiatives, in particular by financing clean energy projects.
Exclusive interview with Julien Hostache, president and co-founder of Enerfip, who explains how it is possible to invest in renewable energies to reduce your carbon footprint, do good for the planet and your wallet
????https://t.co/zdCakc7tHQ@EnerFip pic.twitter.com/wOvlrai6k5— Stef Compare (@stef_Compare) June 21, 2023
Invest in shares of companies in the sector
Buying shares of companies working in the field of renewable energies is a way of directly supporting these companies while seeking to make a financial profit. Among them are, for example, Engie, a French group specializing in the production, distribution and supply of energy. However, it is important to carefully analyze the growth prospects.
Favorable market conditions for some companies
Some renewable energy companies are performing well thanks to favorable market conditions. This is particularly the case for Engie, whose share price has gained more than 28% over the past year.
The Role of Clean Energy ETFs (Exchange Traded Funds)
Clean energy ETFs are investment funds that track the performance of a stock market index related to renewable energy. They thus make it possible to invest easily and quickly in a diversified basket of companies in the sector. However, the performance of some clean energy ETFs can be disappointing. Indeed, of the six ETFs listed in Canada, five have posted negative returns since their inception in 2021, mainly due to high interest rates penalizing growth companies.
Choosing the Right ETFs: Prudence and Diversification
It is therefore advisable to be careful in choosing the clean energy ETFs in which to invest, by learning about their composition, their past performance and the associated risks.
Direct investments in renewable energy projects
Another possibility to support the development of renewable energies is to invest directly in specific projects such as wind, solar, hydroelectric or biomass parks. This option may prove interesting for investors wishing to have a concrete and local impact on the energy transition.
On the other hand, this type of investment generally involves a larger stake and a long-term commitment. In conclusion, several options are available to investors wishing to support the renewable energy sector.
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