Eco Investments: What’s the Best Investment?
Also known as ‘green investing’, eco investing is basically the policy of investing in companies that support or provide environmentally products and practices. The answer to the question ‘what’s the best investment?’ could contain one or two surprises.
Choosing stock may require research into the ‘eco credentials’ of certain companies and seeking the help of trading experts such as IG when looking to invest.
Eco investing and socially responsible investing
The two terms aren’t quite the same; socially responsible investing really concerns the policy of investing in companies meeting certain ethical or moral considerations rather than purely eco considerations. These may include environmental issues but could also relate to the company’s stance on a range of religious or social aspects.
With its association with the fossil fuel industry – namely oil – there’s an assumption the UAE isn’t particularly geared towards environmental concerns, but this would be misleading. With initiatives in place such as building environmentally-friendly buildings, investing in solar power, using ‘green’ concrete in construction, and the Etihad Esco project to retrofit 30,000 buildings with more environmentally friendly features, the UAE is certainly doing its bit for the environment.
Maybe it’s having to; an energy-hungry population combined with unstable oil prices means the region is looking at alternatives to keep all of its proverbial eggs out of the oil basket.
The world of motoring might seem a surprise ‘eco choice’ when the UAE driver is firmly attached to their large 4×4, but there’s a significant commitment to battery powered cars. Lexus has been selling hybrid electric cars in the UAE for some five years, and organisations such as the Dubai police are using electric motorbikes and small one-seater electric-only cars to patrol more built up areas.
There’s a degree of inertia currently in hybrid or electric vehicle take up by customers – largely due to cheaper fuel – but this is predicted to change in the fullness of time as possible fuel subsidies to the motorist reduce and a more ‘environmentally aware’ mentality takes hold.
This could make for a growth area as ‘eco motoring’ gains more traction. The main consideration for investors will be to judge when any significant growth occurs and get involved with investing at the right time.
With so many sunshine hours, solar power would appear to be an ideal source of renewable energy for the region. The Middle East could see in excess of $50 billion being invested in the solar power sector by 2020 according to the Middle East Solar Industry Association (MESIA).
Solar power is becoming increasingly viable as prices have reduced by 50% in the past two years; with more production accelerated by countries such as China getting involved, production costs are reducing.
This growth sector features many start up companies – some may turn into the major regional and maybe even global energy providers of the future.
Play Safe with Managed Investments?
While solar energy might appear to be the pick of the investment options, committing entirely to one sector might not be the safest way to manage your money.