Ask an advisor: How can I invest to fight climate change?

Welcome back to “Ask an Advisor,” the advice column where real financial professionals answer questions from real people. The topic can be anything in the world of finance, from retirement to taxes to wealth management — or even advice on advising.

Not every investment decision is about making money. In recent years, more and more investors have prioritized ESG — short for “environmental, social and governance” concerns. In 2021, $18.4 trillion was invested in ESG funds, according to the consulting company PwC. By 2026, that number is expected to reach $33.9 trillion.

And as climate-related disasters proliferate — including the recent wildfires in Hawaii and Canada — many Americans are increasingly concerned about the “E” in ESG. One of them is a wealthy retiree in Colorado. Feeling responsible for the state of the environment her children will inherit, she wants to know how she can help. 

Fortunately, she and her husband are able to live comfortably and still have money left over to invest. How can she use those funds to help heal the planet? For guidance, she turned to the experts. Here’s what she wrote:

Read more: The 5 categories of ‘anti-ESG’ funds, according to Morningstar

Dear advisors,

I’m a 65-year-old retiree in Telluride, Colorado, and I want my investments to do some good for the planet. My husband and I are already comfortably retired, so I’m not looking for financial advice for myself. But I worry about the world we’re leaving behind for our children, nieces and nephews. 

Specifically, I’m very concerned about climate change. How can we use our investments to offset this crisis?

Aside from our assets in commercial real estate, we have about $300,000 in the stock market, which is managed by our investment management team. The next time we meet with them, what options should I suggest? Even if it means a smaller return for us, how can we invest our money in a way that looks out for future generations?

Sincerely,

Climate-conscious in Colorado

And here’s what financial advisors wrote back: