Do you care about the environment? Do you recycle regularly? But perhaps you are also eyeing up investing in fossil fuel companies as a way of beefing up your portfolio.
It is easy to think that investing in fossil fuel companies is a necessary evil that can be offset in other areas of your life. However, fossil fuels are not only quickly becoming unprofitable as the world changes they can also damage your reputation if you want to set up other businesses.
Here is why should reconsider investing in fossil fuels.
1. The Political Tide Is Turning Against Fossil Fuel Companies
The world is turning against fossil fuels. Alternatives to fossil fuels are growing and there is a political movement against them. Although the current U.S administration under President Donald Trump has so far been in favor of fossil fuels, this will not last forever.
Progressive politicians want to heavily tax fossil fuel companies. They would also introduce new regulation in a bid to move to cleaner energies. This will result in lower profits and a downward trend.
Green energy companies, on the other hand, are growing as new technology enables new solutions to the climate and fossil fuel problems.
The investments that make the most amount of money are ones that take years or even decades to mature. Yet the tide may have turned against fossil fuel companies by this point.
2. Fossil Fuels Will Run Out, Renewable Energy Won’t
There is little point in investing in something that has an end game. This is much the same as investing in large retail chains. This is not considered a good long term investment because online will eventually surpass physical stores.
Renewable energy sources and green companies, however, are always on the increase. Many new companies are being set up to enable people to take better care of the environment and save the planet.
There are electric cars and driverless cars, solar panels and there are also houses that can run entirely on self-generated energy. Portugal managed to run for four days straight on renewable energy. This proves that every day that progress is being made.
Green companies are open to investments as they need funding in their early stages and are eager for investors. Green energy companies based in Europe can often receive funding from the European Union and national governments.
In the U.K the RHI government scheme is one such funding pot that can make green investment go much further than an investment in fossil fuels. This is a great example of a number of fossil-free funds.
Having a diverse portfolio of green energy companies is a better long term financial decision than investing in fossil fuels.
3. Fossil Fuel Investments Look Bad When Investing Elsewhere And On Your CV
We live in a free society where you are free to invest in whatever companies you want but the political climate is turning against fossil fuel investments.
Investing in fossil fuels can be problematic if you want to be a public figure or you later wish to invest in green companies. From a PR point of view, they should be avoided.
From a moral standpoint, these fossil fuel investments can also disrupt people’s homes and the lives of people in the Middle East where working conditions are very low.
Not all companies are unethical but it is important to do research and it might prove problematic to get the complete picture.
We Can’t All Be Climate Heroes But We Can Make A Small Difference
We can’t all be Greta Thunberg but we can take a leaf out of her book by choosing not to invest in fossil fuels.
And many might argue that if she is willing to make the sacrifice of sailing across the Atlantic then others must join her in thinking more carefully about how they live their lives.
4. Green Energy Companies Are Generally Small Businesses
Supporting green energy companies – alternatives to fossil fuels – is generally good because many of them are small businesses whereas fossil fuel companies are big corporations.
A small company or medium-sized business has a smaller number of employees so you are often helping the local economy and hard-working individuals trying to make it rather than a huge faceless company.
These companies often neglect to give back to the local area and are accused of legally minimizing their tax bills through lobbying and loopholes.
Reconsider Your Fossil Fuel Companies Investment
If you’re considering a fossil fuel company investment you need to think about whether this is a viable goal.
Although they may appear to be a sound investment at the moment its important to consider the direction of travel. The world is moving towards green energy and fossil fuels will run out.
This means over the next ten to twenty years your shares could end up decreasing in value as companies potentially start to fold.
There is also a political element to investing in fossil fuels. It is becoming increasingly harder for politicians to justify their use and there is a progressive movement of politicians across the world that wishes to tax them heavily and support green energy companies instead.
This political movement also focuses on shaming individuals who are involved in the fossil fuel movements and it can look bad for your CV and any other business dealings if you have supported fossil fuels.
Fossil fuels are ruining the planet and, as well as not making long-term financial sense, they also don’t make any sense from a moral standpoint.
If you are interested in reading more about fossil fuels and green energy be sure to check out the other articles on our site.
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