Strategies Impact investing Sustainability themed investments (public)

Sustainability themed investments offer investors the opportunity to invest in themed businesses, such as renewable energy, water and waste management solutions, and clean technology. Individuals invest in these companies by: (1) conducting research on their own and then investing through an online broker; (2) working with a knowledgeable investment broker; or, (3) investing in a fund which conducts research and diversifies portfolio holdings for them (likely through an adviser).

Example

AGF Clean Environment Fund

An example of a fund which invests in sustainability themed companies is the AGF Clean Environment Fund.

For the fund’s top ten holdings, see ‘Portfolio Details’.

Strengths and weaknesses

Strengths

  • Inspires investors to support innovation in sustainability.
  • Markets tend to be immature, offering tremendous opportunity for growth as conventional resources become more scarce, more costly and more risk-laden.

Weaknesses

  • Renewable energy and green technology/innovation products tend to attract venture capital which comes replete with a lofty minimum investment and elevated levels of risk.
  • Products available to individual investors are few and far between owing to a variety of factors, including incomplete information in matters of consumer demand and preferences, fragmented product pipelines, regulatory restrictions on retail products, limited distribution platforms, and lacking knowledge on behalf of financial advisers.