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Sustainable Investing Guide 2020 – Review of the best Fossil Free Funds - Wunder Capital, Wealthsimple, Aspiration Redwood

Last update: Sat Feb 22 2020

Doing your part for the environment and the earth doesn’t equal volunteer beach cleanups and switching to an EV. Everything does start at home, with recycling and something as simple as switching off the lights when you leave a room. However, did you know that your investments also play a part in this global endeavor to better the world? Sustainable investing, or socially responsible investing, seeks profit and brings about environmental change with “green” investments.

What are Sustainable ETFs, Carbon-Free Funds and Fossil-Free Funds?

If you have decided to look further into sustainable investing, then it’s worth it to note that there are a few options.

Sustainable ETFs

Sustainable ETFs are simple exchange-traded funds (ETFs) that are sustainable. ETFs are funds that are traded on stock exchanges.

Carbon-Free Funds

Carbon-free funds are funds that are put towards companies and investments that are relatively “carbon-free”.

Fossil-Free Funds

These are funds for investors looking for companies that have little to no carbon emissions.

There are sites and apps that work to pinpoint funds that are sustainable to help you vet your investment choices. All of these funds should effectively be put in stocks that do not aid in oil-drilling, fossil fuels, and high carbon footprint companies. Investing in such funds and companies is also advantageous to you because said companies could be facing large fines, and increasing costs that come at the investors’ expense.


Aspiration Redwood Review

Aspiration is an online bank that focuses its (and your) investments on socially responsible funds. The Redwood fund analyzes a companies’ carbon footprint, practices, and workplace standards to funnel funds into ones with the most potential for growth.

Sign up for this fossil free fund by a trusted, next-generation bank.

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Build your investment portfolio and help causes that are important to you all at once. An outdated school of thought is thinking that investing in socially responsible funds means your ROI (return on investment) is much lower. If a company diverts their funds to reducing their energy bills for example, or deciding to hire a more diverse workforce, statistics show that the company’s reputation and productivity and sometimes profit skyrocket.

If this sounds like something you like, investing in companies that act responsibly and care about their emissions, then Aspiration Redwood is a great option.

Verdict

Aspiration Redwood focuses on spearheading change in the environment starting with our investments. Whether you care about governance in the workplace, diversity, or social and environmental factors, Aspiration Redwood has different options and portfolios for you. They believe that “sustainable investing should be open to anyone” as they eloquently put, so initial contributions can start as low as $10. At the end of the day, they donate 10% of all their profits to charities.


WealthSimple Review

Are you worried about your future? Are you planning for retirement? Whatever concerns you may have can be addressed and potentially solved by WealthSimple.

Learn more about this digital-first, fossil-free account.

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They provide short videos educating new investors and reminding old ones about the stock market. Learn how to invest and be introduced to the stock market. Avoid making errors and how to couple saving and investing together to create a personally tailored plan that works for you.

They also touch upon the Waterfall Method, five simple rules of investing, and socially responsible stocks. The short videos will also help you calculate how much you need to be comfortable for retirement and help you take conscious steps to achieving your goal.

You can invest, trade, and even file your taxes on their site. Investing with them includes a diversified profile and low-fee funds. Everything can be automated to make auto-deposits, reinvest, rebalance and more.

Verdict

Whether you are a beginner or a seasoned veteran at stocks and investing, WealthSimple will not only help you reach your goals, but gain some much needed education at the same time. They break down everything in 10 easy-to-understand videos as an introduction and their financial advisors are always available to answer your questions.


Other Options

1. Wunder Capital Review

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A way to save the planet is through alternative sources of power. Solar power is among the most coveted and efficient, with technology out there that can already power homes.

Wunder Capital is a company that provides solar financing. If you are looking to get your solar project financed or help finance one through investing, whether it’s community developments, solar PPAs and many more, you can find flexible financing offers.

The entire process is known for transparency and the turnaround time for contracts is less than 2 weeks. As the commercial solar market’s leading financier, Wunder Capital has financed over 100MW (mega watts) since the year it all began in 2016.

All it takes is a few simple steps that include: submitting your loan application, receive a preliminary offer, submit diligence documentation, sign the final contract and begin!

What sets Wunder Capital apart from other companies is the facilitated process, easy application, a personal account representative and more. To help these solar projects and yourself, your investment will help create more sustainable power and funnel earnings into your account.

Verdict

More and more companies of any size are realizing the importance of curbing carbon emissions to battle climate change. Only by funding commercial solar projects can society find a better way to power our homes and buildings in a sustainable way. Wunder Capital has taken the initiative to mitigate the harm large companies have by focusing on what’s important – alternative power.

Unfortunately, at the time of publishing this article, this fund was no longer accepting new investors (only commercial solar projects which need more funding – which is great too!).


2. Vanguard Social Index Fund

The Vanguard Social Index Fund was introduced so investors can put their money towards supporting their values and beliefs. This is a relatively low-cost option and all stock options have been vetted and screened to match certain criteria. They are transparent with potential risks and while this fund is currently closed to potential new investors, we hope Vanguard will open these doors once again in the near future. Verdict

Criteria that qualifying companies must meet include: diversity, environmental policies, and workplace atmosphere/environment. Vanguard has actively excluded companies that dabble in undesirable industries such as tobacco, alcohol, firearms, gambling and nuclear power to name a few. We hope that Vanguard will make this fund available again soon with such a high demand of sustainable investing nowadays.

Unfortunately, this fund is no longer active as far as we could tell.


FAQ

What is Sustainable Investing?

Sustainable or socially responsible investing means putting your money in stocks and funds that are socially aware and ethical. Most of the companies have been vetted and put through a stringent screening process that highlights their environmental and social standing and are focused on advocating for social change.

Sustainable investing and caring about the environment doesn’t need to come at the expense of your profits. Contrary to traditional beliefs, making money doesn’t necessarily equal supporting more CO2 emissions and child labor. Sustainable investing have proven that both caring for the environment and making some returns on your investment can go hand in hand.

BlackRock Sustainable Investing

Blackrock is another company committed to bettering the environment for future generations. Focused on companies and organizations that are poised for growth, ETFs and mutual funds geared towards sustainable investing display no signs of slowing down.

Top Sustainable Companies to Invest in

Here is a list of the some top sustainable companies to invest in (in no particular order).

Microsoft Texas Instruments Hasbro Home Depot Equinix Quanta Services Campbell Soup Adobe Pepsi Co Emcor Group Ikea Panasonic Patagonia Nike Tesla

We chose options that we’re sure a lot of you have heard of. It may surprise you as to how many are now shifting gears towards being more environmentally conscious.

Most Sustainable Companies to Invest with

The lists continue with the most sustainable companies to invest with (in no particular order).

Aspiration Bank Vital Capital Fund Motif Open Inveset Earthfolio Ellevest Hedgeable Wunder Capital SVX Blackrock Wealthsimple

A lot of these platforms do the hard work for you and screen the companies basked on products and practices to make sure your money is put to work where it counts. These platforms also make the funds available by setting the initial investment at a low number. A lot of these companies also guide you through the investing process to help you customize your portfolio and create one unique to you.

What is Sustainable Finance and Disinvestment?

The answer is moving funds from fossil fuels and putting it towards sustainable investments such as fossil-free funds. Investing in such funds will benefit both parties (you and the company) as well as the earth.

Conclusion

Eco-friendly investing gives you that warm feeling in your belly knowing that you are doing good, doing your part (however little or large) to benefit society. Directing your investments into funds that reflect your morals and values while placing the profits back into your bank account sounds almost too good to be true. More and more companies are now taking the environmentally aware route and cutting down emissions all while being transparent about their practices. Let’s support diversity, fair labor costs and sustainable practices by engaging in sustainable investing!