Why I Care About Sustainable Investing

If I had to pinpoint the exact moment that I started caring about the earth we live on and had a language to discuss it with, it would be when I enrolled in Dickinson College. Known for its sustainability, Dickinson College became a carbon neutral institution in 2020 and is highly rated by the Princeton Review Green Honor Roll. While I was there from 2012 to 2016, I appreciated the water bottle refilling stations, the college farm that contributed to campus dining services and local restaurants and the Center for Sustainability Education that instilled in students the importance of taking conscious action to sustain the earth.

That’s how the fuse was lit.

Within the last year there were two pieces of work that solidified and further propelled my sustainability mindset: “No Planet B: A Teen Vogue Guide to the Climate Crisis” edited by Lucy Diavolo and Lorde’s album “Solar Power.” The Teen Vogue collection “No Planet B” includes articles from 2016 to 2020, many written by teen activists for climate change. It covers the basics of climate change, the fossil fuel industry, how recycling plastic won’t stop plastic from ruining the earth, intersectionality—that is, the acknowledgement that everyone has their own unique experiences of discrimination and oppression, considering gender, race, class, sexual orientation, physical ability, etc.—with climate activism and the global impact climate change is having on indigenous people. In one article from 2019, we hear from Amanda Cabrera, an eight-year-old at a climate change strike in New York City who says, “We need the planet but the planet doesn’t need us.” All of these young voices are the ones who will be most affected by climate change, and they understand just how dire it will get if nothing is done to slow it down.

Another young voice affected by climate change is Lorde. Ella Marija Lani Yelich-O’Connor, known professionally as Lorde, is 25 years old and released her latest album “Solar Power” in August 2021. It’s an album inspired by her time spent in nature when she cut out social media and most of the internet in 2018. On the album, Lorde balances the knowns with the unknowns. The song “Fallen Fruit” is her most explicit on climate change with lyrics like “It’s time for us to leave,” the fallen fruit of the title signifying what little is left after prior generations’ development and damage of the earth. On the final song of the album, “Oceanic Feeling,” she sings about lineage of place and connection with the earth and its elements. She starts off by thinking about her ancestors, her past; and then to her brother, her present; and finally, she thinks about a daughter in her future. But will there be a world for that daughter in the future?

I remember reading “No Planet B” at the lake while listening to Lorde’s album “Solar Power” over the summer, feeling all of my big feelings about the earth and all the harm we have done to it that cannot be undone. Layers and layers of things humans have built on this earth, roads that connect us but also cause pollution, buildings that the majority of people can’t afford to live in, factories that only care about efficiency and profit and are pumping toxic waste into our air, into our water, into our lives. It doesn’t just disappear, it piles up—everything we have done to the earth will overtake humanity in the end. Corporations are the biggest producers of waste and yet most of the climate anxiety and call for sustainability is placed on the individual.

What can an individual really do to improve the world? I can start with putting my money where my mouth is. That means I’m not investing in Tesla or Amazon, to start. Other big corporations—including asset managers BlackRock and Vanguard that have had a huge hand in environmental destruction—are also off the table. And I’m not interested in investing much in cryptocurrency either—according to Digiconomist on Twitter: “During 2021 Bitcoin consumed 134 TWh [terawatt-hours] in total, which is comparable to the electrical energy consumed by a country like Argentina. Related CO2 emissions were ~64 Mt [metric tons]; enough to negate the entire global net savings from deploying EVs [electric vehicles].”

What I can do is research my investments before I put my money into them. That socially responsible exchange-traded fund (ETF) I think I found? It’s an iShares ETF, and iShares is owned by BlackRock. And its top 10 holdings are full of big corporations. Oh, and it’s mostly invested in military-grade weapons and fossil fuels! Many investments are masquerading as sustainable for me to feel better about investing in them, and I’m not going to fall for that.

There are many layers of sustainability to look for in an investment, including whether the company itself is investing sustainably, can sustain its business, is using and creating sustainable products and, at the end of the day, can also offer sustainable investment returns.

Though it will be a more difficult route, I’m going to find stocks and funds that create better ways of living for our future like efficient solar energy, wind power, waste reduction, pollution control and green transportation. Even though I’ll be investing for the long term, I want to take action now so I can make a larger impact in the future. There’s only so much an individual can do in the fight for climate change, but if we all care just a little bit it will make a world of difference.

If you’ve been inspired to look for sustainable investments, let me know what led you to this point—be it a book, an article, a discussion with family/friends or a personal experience in nature.

Read these next!
The Great Index Fund Diversion
Finding Index ETFs That Aren’t (Entirely) Killing the Earth

The Great Index Fund Diversion

Index funds have been on my mind for a while. A few years ago, I was talking to my family about investing and index funds came up as an easy way to start.

Index funds are groups of securities like stocks or bonds that you can invest in to get a bigger chunk of the market in your portfolio.

I had index funds in mind when I opened my brokerage account; I made sure that my broker had a good amount of no-transaction-fee mutual funds available. Index funds seemed like a great place for me to start investing, since I’m not yet comfortable investing at the individual stock level. I could get what I needed to diversify a portfolio with just a few funds, instead of trying to identify 20 stocks that would serve a similar purpose.

However, once I actually started to look at index mutual funds, I quickly descended into panic when there were so many barriers to entry: Minimum purchase amounts, especially for the socially responsible funds I was interested in, were sky high; there were institutional funds that I wasn’t sure I could even invest in as an individual (I found out that it depends on the fund); and there were funds that weren’t even open to new investors.

I used AAII’s Fund Screener to try and find something that would work for me but soon I was overwhelmed by all of the metrics I needed to apply to find what I was looking for. Which index should the fund be following? How can I find a fund that is actively socially responsible and not just investing in big corporations that happen to not, at this point in time, be treating the earth like a hotel? And how do I sift through the mammoth amount of 24,000+ mutual funds available to begin with?!

After about a week of screening and researching, I decided to take a step back.

This is essentially online clothes shopping but for index funds, so I tried to narrow my search to find the ones I like in my size. But I don’t want to force myself to fit into anything, and I definitely don’t want to invest in something that I don’t understand. I want to follow a strategy that doesn’t require any emotional breakdowns in the process!

One day when I’m more entrenched in investing, I’ll revisit index mutual funds. But for now, I’m going to focus my attention on index exchange-traded funds (ETFs). There are no minimum purchase amounts attached to these, and there are only about 2,700 ETFs to choose from, which should help narrow my search immensely. I’ll report back on how it goes!

My Investing Discoveries: Introduction

Hi everyone! My name is Anine Sus, and I am the assistant editor at the American Association of Individual Investors (AAII). Like you, I haven’t started investing yet. Even after over four years of working at AAII, I am still intimidated by investing and the stock market. All I have is my checking and savings accounts, and my 403(b) account, which is the equivalent of a 401(k). More to come on what those numbers and letters mean because I have no idea. All I know is that to survive in this world, money is the means to just about any end.

What I’ve gleaned through my years at AAII is that long-term investing could be a good choice for a lot of people. Your way of investing must be as inimitable as you are. It has to fit your lifestyle, your needs, what you want for your future and how you want the world to be in that future. It’s a tall order, but I’d like to figure out how to invest in better natural energy sources and learn how to invest for an early retirement so that I can follow my parents’ example and pursue other passions. (My dad sees a goat cheese farm in my future, but I think he just wants free cheese!)

Maybe you’ve been putting off investing because you don’t think you have any money to spare? Being alive is expensive as hell. Let’s figure out how you can start investing with $5. Are you in debt from pursuing an education that is essentially required for you to be employable? You can still invest while you pay the government back for the next 20 years. Do you want to own property even though having that amount of wealth seems impossible? Let’s work through that one together.

If you’ve struggled to figure out where to start with your finances, come along with me as I teach myself using AAII’s tools and its 40+ years of investing education as a guide. There’s way too much financial advice out there, really too much to bear at this point. It’s also hard to know what and who you can trust. But AAII provides what you need to be an investor in your own right, and that could include hiring a financial adviser if that’s what fits your needs. We’re going to start off much smaller than that, because honestly between working and being an adult, I don’t have time for much else!

Comment down below what questions you have about investing!