Hello everyone, today HNFC will discuss the "Green Technology" sector. We hope our ethical and regular investors will enjoy reading this article and get many valuable ideas from it. Greentech sector has many promising companies which are worthy of your time and money. Sounds interesting?
Than see you on the inside.
We are living in era full of challenges and revolutions. At the same time the 2000s represent the start of the technological revolution and the awareness of the climate changes.
Those two previous events gave birth to a lot of business sectors (Big data, Hybrid cars, solar panels...) and have revolutionised the financial sector (start-up, Venture capital, green bonds…). Today, we are about to see the recent sector which comes from the combination of Technologies and Green companies: the GreenTech industry and the financial environment around the industry.
What Green Technology companies are all about?
It is quite difficult to summarize the GreenTech industry by one definition however we’ll give it a try:
GreenTech industry represents the sector in which technologies and other related services are used in an ecological, sustainable and responsible way.
Investing in any green companies means to make a green investment. The International Monetary Fund (IMF) defines the green investment as “the investment necessary to reduce greenhouse gas and air pollutant emissions, without significantly reducing the production and consumption of non-energy goods”. In this definition, the term green investment is too vague for us.
Our definition would be: “A green investment in its financial meaning is a financial contribution to a green company with an investors’ objective of making profit with an environmental awareness”.
To describe the whole sector in one paragraph is practically impossible. Here are three main
reasons which make the Green technology sector difficult to seize globally:
1st. This sector is still “In the development process”, meaning that every day new product or
service appears on the market.
2nd. Green concepts can be applied in many areas. Thus, GreenTech concept can contradict
the airplane’s industry or the computer engineering industry.
3rd. Green Technology companies have many different forms. It can be a little start-up but
operate as a division of a big global corporation.
The best way to describe GreenTech sector is by showing you some examples:
Why Green Technology companies are worthy of your time and money?
First of all, your money has a true global utility and can do real good. This reason may not be important to some of you but quite often people want to have a positive impact on the world they are living in. As a conscious investor, it is very hard to find financially attractive company which make this world a better place. Investing in GreenTech companies is the first step to make our earth cleaner and safer place.
Now, lets talk about financial attractiveness of the green technology sector! The expected growth of the GreenTech industry is big. Expectations are high for two main reasons. Firstly, there is a global trend to manage and reduce pollution levels. On the last Paris conference, more and more politicians encouraging entrepreneurs to create green business. This means that a whole new sector is backed up by politicians and governments, thus provides safer environment for investing. Second reason why growth is expected. We are at a very early stage of the GreenTech sector. Most of investors agree that it is still a “Blue Ocean” which means it has plenty of opportunities for strategists, directors and executives. If you take the right position now, you can expect to be a part of a major company in the industry of the future. You can become an owner of the next Apple.
The last reason which might encourage you to consider this sector as a good investment opportunity is the portfolio diversification. Demand for Oil, Nuclear and other types of energy are expected to decline in the future, not mentioning cars sales. By adding a green stocks or bonds to your portfolio, you add a new horizon and you mitigate your risk exposure.
How can you have exposure to GreenTech companies?
The thing is green technology companies contradict with traditional financial world and here is the reason why? GreenTech companies are considered to be ethical investments and as a common perception less profitable compare to rest of sectors, thus makes them less popular for the media.
In addition, green technology companies are hard to find, there are no such thing as big green giant. Hence, investing in green stocks can be complicated and tricky. Here are three ideas you can use to get involved in the green market.
In addition, during constant market changes and in times of uncertainty bonds tends to perform better than shares. Never put all of your eggs in one basket!
Thank you for your time.
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Written by Samuel Chaineau │with contribution of Vee Venski
Edited by Vee Venski
This article is not a promotion of financial investment. Investing money in financial instruments is risk-reward process. Losses and gains are part of financial investment process. Only invest money you can afford to lose.