Last October, the UN’s landmark report on global climate change sent energy markets into a frenzy, as the future of oil and coal industries are jeopardized by large-scale financial divestment. The devastating report, which predicted a global temperature increase of 1.5C by 2050 without serious climate intervention, prompted many worldwide institutions to declare their support for green renewable energies, which are predicted to rise from 15% of global energy supply to 61% between 2020 and 2050. The surge in renewable energy demanded by the UN report offers financial promise: it signals investors to divest from fossil fuel resources and reallocate their stocks to companies on the cusp of gaining control of the global energy market.
For larger companies, the first step towards engaging with the green energy movement is to divest from fossil fuel and oil companies. In fact, since 2013 more than $6 trillion in financial assets have been divested from funds related to fossil fuel, with hundred of companies and business making clean energy commitments. Fossil fuel divestment are part of a growing surge in state and local tax-write offs for green energy, including incentives for everything from public transportation to eco-cars to charitable donations. Erik H. Gordon recommends examining cross-sector social change initiatives at the local level, many of which blend a commitment to climate change with other philanthropic or humanitarian causes.
When searching for lucrative investments in the green energy market, local start-ups and quickly-growing companies are predicted to yield lucrative returns for investors in the coming years. For instance, in countries known for high renewable energy output, such as the Netherlands, strong investments are attributed to Dutch investors who engaged with local companies devoted to green energy. However, it’s equally important to consider the environmental footprint of your own business. Enacting small decisions, such as converting from paper to digital storage and using responsible data management software, pose serious ecological advantages for your company.
Join The Party
Much like the larger stock market, individual companies stand to attract investors by switching to renewable energy resources. Recently, for instance, the small English city of Bristol surprised financial experts when it announced that the city had raised £1bn in investments from over 100 companies for its green energy plan. The biggest investments arose from global companies looking to divest their resources from fossil fuel. For small and local businesses, committing to a green energy plan is a strong move for attracting wealthy investors and corporations divesting from fossil fuel worldwide.
The changes expected in the coming decades due to global temperature rising and climate change are practically unprecedented: which is why it’s important for investors to stay prepared for major changes in the energy market. Moving towards green, renewable energies aligns your company with the 88 countries worldwide that commitment to large scale divestments from fossil fuel: in fact, speculative investors and venture capitalists stand to profit enormously from the switch to thinking green.