Investing in oil and gas industries is becoming more risky due to volatile commodity prices are volatile and there are serious environmental concerns such as oil spills and carbon dioxide emissions. In just 8 months (July 2014 to March 2015) the price for one barrel of crude oil plummeted from 107 USD to 42 USD. One of the worst environmental disasters was the Deepwater Horizon oil spill, which occurred in 2010 in the Gulf of Mexico. An estimated 210 million US gallons of oil were accidentally released into the ocean, wreaking havoc on beaches, wetlands, and estuaries, and killing many marine species. This oil spill caused the BP stocks to drop by 55%.
Many companies are turning to more socially responsible, green investing. The top green investments include:
- Nature-based solutions (NBS) in green power: water, wind, solar, geothermal, and power generation methods that do not produce greenhouse gas (GHG) emissions
- Water stocks: collection, treatment, and distribution of our most valuable resource
- Pollution controls: industries that specialize in GHG emission reductions
- Green transportation: including electric car companies and fuel-cell technologies
- Waste reduction: recycling companies and power generation through waste incineration
- Organic products: sustainable agriculture and healthy animal husbandry practices, focussed on keeping harmful chemicals out of food and the water supply
BlackRock, the largest asset manager in the world, valued at over 10 trillion USD, understands the dangers of climate change and the need to transition to greener investing. To support the Paris Agreement, BlackRock has dropped companies that make more than 25% of their profits from coal-related activities. Other investors are following suit; the Climate Action 100+ group was formed in 2017 to encourage companies to disclose the climate-related risks and to optimize the green benefits of their business. The success of the Climate Action 100+ has been remarkable, with over 350 investors, valued at 35 trillion USD.
The Green Climate Fund (GCF) supports the reduction of GHG emissions and the adoption of NBS in resiliency and land development. Several developing countries are part of this initiative to help communities adapt and prepare for climate change. As a result of the GCF, more than 6 billion USD have gone into over 140 projects, reducing millions of tonnes of CO2 emissions, and helping almost 400 million people become more prepared for climate change.