Over the last decade or so, there has been a growing interest of investors in investing in eco-friendly projects. Where originally most of that investment was focused on green, renewable energy, it is now a far more diverse ecosystem encompassing source reduction, cradle-to-cradle designs, green nanotechnology, and much more.
If you’re excited and thinking about investing in eco-friendly projects – that’s great, but do you know what to expect? Many people are not quite sure exactly what they will ‘get’ out of investing in eco-friendly projects; and there are two main goals that you should look to accomplish when you do so:
- Profit
At the end of the day just like any other investment, you will want to turn a profit from the eco-friendly projects that you invest in. For that, you need to evaluate them as a business, and scrutinize their profitability, risk, return on investment, and so on. Although, overall, eco-friendly projects are regarded as being ‘less profitable’ than normal investments, that is not always true. In many cases, eco-friendly projects not only incur additional costs that affect their profitability, but at times, they also benefit from it with tax cuts and exemptions, grants, and so on.
- Supporting environmental goals
When you’re investing in eco-friendly projects, profit is only part of the equation. The other part is doing your bit to help achieve environmental goals – and as such, you should choose projects that will do so in areas that you are interested in. While highly subjective, the bottom line is that you will want to evaluate any project that you invest in and figure out just how big of an impact it will have towards achieving its environmental goal, and how successful it could be. At the same time, you should also beware of ‘greenwashing’ – which is a growing trend of appearing to support environmental goals on the surface, but not in fact.
Ideally, you should choose investments that you feel are able to fit both of these goals. Being an investment there is no guarantee that all the projects that you back will succeed, but assuming you do your homework, you should be able to ensure you select those that aren’t too risky.
The diversity of eco-friendly projects allows interesting opportunities to diversify your eco-friendly investments as well. You shouldn’t take on any excessive risks when you do so. In some cases, however, you may find that you need to raise additional funds to invest in a project that you’re really passionate about, wherein you can look to various financing options or personal loans such as Prosper Loans, and others available for green minded folks.
Now that you know what to expect from investing in eco-friendly projects, why not give it a go? Start by researching some of the eco-friendly projects that are looking for investments, and see whether any of them seems interesting. If it does, do your due diligence to decide whether you want to invest in it and the environmental goals that it is working toward.
Article Submitted By Community Writer
