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Green Investing: How Your Money Can Benefit Both Your Wallet and the Planet

Finance

Environmental, Social, and Governance (ESG) assets are projected to surpass $40 trillion by 2030, according to the latest Bloomberg Intelligence report, highlighting the growing significance of sustainable investing in global markets.

Climate change is no longer just a topic in the news; it has become a key factor in investment decisions. Green investing focuses on supporting companies that are sustainable and environmentally responsible, spanning sectors such as renewable energy (solar, wind, hydro), sustainable agriculture, and water conservation. These investments fall under the wider ESG umbrella, attracting billions of dollars worldwide.

UAE-based Sophia Bhatti, founder of Wimbledon Wealth, notes, “Green investing has moved from niche to mainstream. Investors today want returns with impact. From clean energy to water technologies and sustainable real estate, ESG-focused funds are drawing global capital, and the UAE is part of this trend.”

Balancing Profit and Purpose

Diversification remains essential when investing in equities and funds. Investors should spread their capital across regions like North America and Asia, and across sectors such as technology, manufacturing, and finance. Green investments should complement a balanced portfolio rather than be pursued in isolation.

Some investors hesitate, believing sustainable investing may offer lower returns than traditional approaches. Angela Homsi, founder of clean infra-tech company Ignite Power, explains, “ESG is no longer just ethical—it’s financially strategic. Millennials and Gen Z are driving ESG from niche to norm. Companies that operate sustainably often outperform in the long term.”

Homsi adds that ESG-aligned portfolios have historically matched or exceeded traditional benchmarks, making green investments a competitive option for long-term growth.

Avoiding Greenwashing

Investors must be vigilant against “greenwashing,” where companies overstate their environmental credentials. Dr. Miniya Chatterji, CEO of Sustain Labs Paris, advises, “Research the companies in any ESG fund. Look for resource efficiency, social entrepreneurship, clean revenue, supply chain ethics, employee wellbeing, human rights, and financial sustainability.”

Transparency is key, says Homsi. “Focus on what a company actually does and the measurable impact it generates. Positive outcomes like electrification, reduced carbon emissions, and local job creation should be verifiable in real time. Genuine impact is transparent and accountable.”

Green Bonds and Funds

UAE-based Masdar, a global leader in renewable energy and green hydrogen, has raised significant private investment through green bonds. Its 2023 Green Bond Programme generated $750 million for solar, wind, and battery storage projects. Masdar also manages a Green REIT focused on sustainable UAE real estate. Other issuers include ADCB and DP World, the latter using Sharia-compliant sukuk structures.

A wide range of green funds is available for investors seeking diversified exposure. Established funds like the iShares Global Clean Energy ETF or BNP Paribas Energy Transition have gained popularity, while newer vehicles target carbon capture, biodiversity, and other climate solutions. Bhatti notes, “These funds can offer annual returns between 6 and 12 per cent, though as with all investments, risks remain, particularly in fast-moving sectors.”

Marilyn Waite, managing director of the Climate Finance Fund, advises Middle East retail investors to consider green sukuk, fossil fuel-free banks, and climate-focused stocks in emerging markets. She recommends exploring publicly-listed companies generating over 50 per cent of their revenue from climate solutions at www.climatesolutionstocks.com.

With careful research and a focus on transparency, green investing allows UAE investors to pursue financial growth while supporting a sustainable future for the planet.

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