How financial products are chosen to be included on GreenPortfolio.
What kind of financial products are included on GreenPortfolio?
The aim of GreenPortfolio is to be a resource for anyone looking for investment products that directly support the installation of renewable energy.
Included products are available to anyone in the United States, though occasionally, products may require a low minimum investment (less than $1000). Products that are only available to Accredited Investors are not included. Investment products that also include fossil fuel investment are also excluded.
Here are some further criteria for specific types of financial products:
Bond Funds: Bonds in a fund are used to finance or refinance green or renewable energy projects.
Whenever possible, all bonds included in a fund are rated as green by the Climate Bonds Initiative. Whether the featured bond funds participate in the voluntary Green Bond Principles process is also taken into consideration.
ETFs, Index Funds, and Mutual Funds: The main metric used to include a fund on GreenPortfolio is the extent to which it invests in companies or projects which primarily engage in renewable energy development. Funds are compared against other funds based on Environmental, Social and Governance criteria (ESG) ratings from several providers, specifically their environmental ratings. Funds are also examined based on the inclusion of fossil fuels within their holdings - the goal is to only include funds that do not have fossil fuel exposure.
Banking: When you put your money in a checking or savings account, the bank can use your deposits for a variety of investments from small business loans to mortgages to financing a brand new coal plant. Few banks commit to using the money you lend them in a socially responsible or environmentally sustainable way. Whenever possible, GreenPortfolio recommends accounts where all investments made with your money go towards renewable energy project financing. When this is not possible, we may recommend accounts where a portion of your deposits funds renewable energy projects and the remaining funds projects that are socially responsible (i.e. no fossil fuels, weapons, private prisons, or predatory lending).
Loans: All loans featured must be used to finance renewable energy projects, either for one project directly or for a portfolio of projects. Whenever possible, links to direct loans are provided.
Credit Cards: The banks issuing the credit cards offer a variety of benefits to cardholders. Whenever possible, we will highlight cards that provide funding for renewable energy projects. We also include cards that help keep track of your carbon footprint and/or allow you to purchase offsets – often through green investments.
Companies: The primary business focus of any recommended stocks must be to develop or finance renewable energy projects. Companies cannot also invest in fossil fuel development. Their activities can take place anywhere in the world as long as stocks are reasonably easy to purchase within the US. Companies’ ESG ratings are also reviewed, but they are not a determining factor for inclusion on the site.
Nonprofits: While not expressly an investment for which one receives a financial return, nonprofits offer important financial products to individuals who wish to support a social or environmental good through a financial contribution. Nonprofits are included based on their ability to directly fund renewable energy projects throughout the world. When possible, ratings for nonprofit and charitable organizations, such as from Charity Navigator, are reviewed to determine the organization’s efficacy and legitimacy.
If an investment or financial product does not 100% support renewable energy, is it still included?
There are no investments or financial products which invest all their time and money into green projects.
Even companies that put climate change and environmental sustainability at the forefront of their business may take part in other socially responsible investments, such as energy efficiency or retrofitting projects. Other truly green investments also hold certain portions of their portfolios in cash. Thus, some investments or financial products which are included may have interests in other socially responsible investments (SRI).
How important are ESG ratings in GreenPortfolio’s analysis?
ESG ratings are an important tool when evaluating companies to determine how sustainable their overall business methods are. However, they are not a sufficient tool for determining how directly a financial product invests in green energy. Many companies that have high ESG ratings are also considered to be highly sustainable but don’t actually participate in any sort of green investing.
How often are new investments put up on GreenPortfolio?
We try to update the site on a continual basis whenever we find out about a new green product that we think our users might want to include in their portfolio.
Do you know of a product that should be included on GreenPortfolio? Contact us and we'll see how well it grows clean returns.
Is GreenPortfolio considering new green financial products?
GreenPortfolio is always considering new products that allow investments in renewable energy. There are often new green, environmentally friendly products coming on the market. Federal and state policies are often changing and provide new opportunities for investing in renewable energy. Additionally, as new climate friendly investment products develop in other parts of the world, these products will eventually become available in the United States and will be reviewed.
Disclaimer: GreenPortfolio aims to keep all information on the site current and accurate. However, when you may find differences between information listed here and information listed on a financial product provider’s website. Opinions expressed here are not those of any bank, credit card issuer or financial institution, and have not been reviewed, approved, or otherwise endorsed by any of these entities. Please complete your own due diligence before making any financial decisions.