Sustainable investing: how to profit while healing the planet

The planet is dying. We're doing an utterly shitty job taking care of the so-far only planet we have. It's no-one's fault, and everyone's. If we are not blowing Earth up with fission bombs, we're slowly scorching it to ashes. But we don't have to.

We're suffering from worst droughts in generations. For example in Somalia, where I own a camel through Agrikaab, the average temperatures are already close to 33°C. Being so close to the equator, it is one of the warmest countries in the world and because of it, growing food is becoming increasingly difficult.

Last year, South Africa was this close👌from running out of water. They avoided the catastrophe, but it's going to get tougher. South Africa's temperatures average around 18°C - much lower to Somalia and both get an equal amount of rainfall over the year. If South Africa is having trouble with water imagine how hard it is in a place twice as warm.

How quickly we act matters

At current rate, we are projected to exceed the desired limit of 1.5°C temperature increase by 2050 the latest. At this point, the melting of polar glaciers will have accelerated rapidly, causing sea levels to rise. Maldives will be no more, so better go see it now. Also the Siberian permafrost will thaw, releasing unimaginable amounts of methane into the atmosphere - a greenhouse gas 30 times worse than CO2.

What will happen to places like Somalia? If you can't grow food, famine follows. According to some expect, there will be 200 million climate refugees by 2050. People who have no "legal" grounds (=that there would be international laws for yet) for migrating to other countries, yet they will suffer greatly if they stay. What will happen to places like Somalia? By 2100 the average temperatures in Somalia will reach over 36°C, enough to make most attempts at agriculture fruitless. Where do we accommodate everyone?

So we're fucked.

But let's not jump off any roofs just yet.

Ethical investing

I personally feel pretty horrible about the state of the planet and my own contribution to it. Though, I can easily justify why I, personally, am not accountable for the dreadful condition of Earth. I can also explain how living in a sparsely populated forest called Finland that adds more trees every year than it cuts down, I'm somehow already doing my part. But it's not really about that. I can do wayyyyys more.

There's a foundation in Finland called Compensate, which allows you to pay a monthly fee to offset your carbon emissions. With the price of two Netflixes you can free yourself from the moral suffering your lifestyle weighs on you. And they're spending the money wisely, too: on gold standard certified projects.

But is that really the way? Why wouldn't there be a market for a better planet? Sure is!

The way capitalism works is everyone tries to maximise profits, even if it meant causing harm, pain or destruction. There isn't really a moral code to companies, although they say they work ethically. Companies cave in to the pressure of the public since they calculate it's the best move financially. When their competition doesn't obey the same rules, they will figure out ways to circumvent the moral code and do whatever to stay competitive, not give up facing a dirty opponent.

Capitalism is efficient in producing profits, in fueling financial growth; it's not efficient in preserving the planet. But we do not have to follow the rules. You do not have to maximise your profits. What if you would settle for less and help the world at the same time?

What if that "less" was 7% and by investing 1,000 € you could offset 38 tons of CO2, the equivalent of four years' personal emissions? Have a look at the projects on Trine for example.

In remote, off-grid places of countries like Tanzania and Uganda, kerosene lamps are used for lighting. Not only are they dangerous in such dry places, but they also produce significant amounts of CO2. Replacing kerosene lamps with solar powered LEDs is not just financially sound, it's great for the planet. The systems can also be used to charge mobile phones, which is tricky when you don't have wall sockets.

I'm going to do my part

The first thing I've done is I've lent 1,000 € to this project. 1,000 € was the minimum to get the 7%; lower investments would have yielded 5%. Trine claims the company has an A rating, which I hope means there's little risk of a default. There was another project providing solar power to commercial and industrial customers in Nigeria. This project yielded 7.5% for the same investment, but offsets less CO2 and has a B rating.

I've also recently invested in solar cells in South Africa. I've bought 25 solar cells in a project by The Sun Exchange. The estimated internal return rate is 12% with that. The solar cells will obviously provide electricity, and as I own some of them, I will be compensated for the electricity they produce.

I've decided that from this year forward, I will be CO2 negative. I'm too well off not to. Think about it this way: 1,000 € is about 0.2% of my net wealth. I believe the investment carries significantly less risk than most of my P2P portfolio. Risk-adjusted return is probably not bad at all.

I imagine also that these sustainable investments have very little correlation with the stock market, bringing my overall portfolio volatility lower.
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