How to Make Responsible, Environmentally Friendly Green Investments to Fight Climate Change

As climate change becomes a more pressing issue in the minds of the public, there is an increasing financial incentive for companies to be seen as environmentally friendly. With this incentive comes the prevalence of “Greenwashing”. Let’s find out how to avoid it and start investing responsibly.

solar panels

Climate change has been an issue of increasing global concern in both political and scientific spheres for decades. However, with the increasing frequency of otherwise abnormal environmental occurrences such as heatwave that is currently hitting South East Asia, a growing concern for our environmental impact has  slipped into public consciousness.

As our impact on the climate impact has become a point of consideration in our everyday decision-making, it has also started to extend into our investment choices. Increasingly, being a ‘green’ company that makes environmentally conscious choices has become a huge selling point in the investing world.

However, the road to hell is paved with good intentions, and ‘greenwashing’ is becoming a serious and prevalent issue, with some trying to trap well-intentioned but less discerning investors into putting their funds into companies with no intention of making environmentally friendly decisions.

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The Impact of Climate Change on Singapore

Rising Sea Levels

Rising sea levels pose a significant threat to Singapore as a low lying island. Much of the island is only 15m above sea level, and 30% of the land in the island state is just 5m above sea level.

Water Resources

It is well known among Singaporeans that water management is a top priority Singapore, whether it be sourcing potable water sources for public consumption or managing the rainfalls and preventing flooding in urban areas. Both of these tasks could face detrimental impacts from climate change. Periods of drought affects the reliability of our supply of potable water whilst an increase in intensity of rainfall could overwhelm existing drainage infrastructure and cause flooding.

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Public Health Impact

One of the impacts of climate change that people rarely consider is the effect a changing climate can have on public health.

Singapore is situated in a region where vector-borne diseases are endemic. In layman’s terms, that means that animal borne diseases such as Dengue are a permanent fixture in the lives of Singaporeans.

There is a strong correlation between case numbers of such vector-borne diseases and the warmer periods of the year, meaning that as average temperatures continue to rise and warm periods occupy more of the year, there will be a correlating rise in the cases of such diseases. Furthermore, the increasing average temperatures themselves will be a source of heat stress, and a health hazard particularly for the elderly and the sick.

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What Is Greenwashing?

Greenwashing is the practice of presenting, confusing, misleading or even outright false information about a company’s positive environmental impact. Greenwashing is not a new nor foreign phenomena, with the term first being introduced in the 1980s.

An unfortunate reality is that since eco-friendly products charge a premium, many companies are incentivised to play up just how green their products are, playing on the emotions of the consumer rather than the merits of the products to encourage customers to purchase it. This means that as a consumer or investor, you would have to put in the work to decipher if companies are truly upholding their environmental claims or if they are just out to maximise their profits.

How Do I Spot Greenwashing?

To make an investment decision that truly environmentally conscious, we must be able to separate genuinely environmentally conscious companies from those greenwashing.

So how can we spot greenwashing? One way to spot greenwashing is to look out for common greenwashing brand tactics such as using fluffy language and buzzwords. Companies participating in greenwashing have little to show for environmentally friendly efforts. Their claims of their product’s ostensible environmental benefits will often be vague. For example, a company may describe their product as having a lower environmental impact without giving any evidence of how it achieves this. In the case that the manufacturer is unable or unwilling to be transparent about the manufacturing process, the actual positive environmental impact could be negligible.

Another form of greenwashing is called hypocrisies greenwashing. This is the use of deceptive marketing such as marketing a product’s use as sustainable when it’s manufacture continues to use environmentally damaging methods.

Evocative imagery, such as a picture of flowers growing out of an exhaust pipe, is another market strategy that can be used to imply an eco friendly ethos without making outright claims of eco friendly efforts. This is a common way companies wrap an environmentally damaging product in clever marketing to imply an eco-friendly theme.

coins in a glass with plant
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Where Can I Make Green Investments?

Online Trading Platforms

One way to start to make green investments is through online trading platforms. Online trading platforms give you access to environmental, social and governance (ESG) mutual funds, index funds and exchange-traded funds (ETFs), which can help you support companies verified to have green practices without sacrificing performance or incurring excessive fees.

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Trends in Green Investing

The ‘Amazon Effect’

One trend being observed started with Amazon declaring a net zero-emissions commitment through their 2019 ‘climate pledge’. As more companies join as signatories to this net zero-emission commitment, it begs the question, what will these companies do about their suppliers? Supply chain interdependency means a dependency for emissions reduction as well. Top upstream suppliers such as Apple and Samsung have already declared a net zero target, and in Apple’s case, even a decarbonisation target. This domino effect of corporations pushing corporations towards net zero emissions may increase the value of green investments.

Climate Adaptation

Despite our current and future efforts against climate change, even if we are able to curb its progress, the climate that we live in has already been irreversibly changed. As such an increasing number of climate adaptation projects are becoming necessary in allowing our societies to adapt to this new climate. As the United Nations expects a 5 to 10 times increase in global spending on adapting to climate change, this sector presents much room for growth and a unique opportunity for investors.

How Do Green Investments Help?

Green investing alone will not solve the problems of climate change. However, backing companies and corporations that actively work to address this issue, or at a minimum not exacerbate the negative climate impact of modern industry is a great place to start. Financially rewarding companies that have a positive impact on the environment and our society at large is one way that the everyman can contribute to changing the post-industrial status quo that damages our environment.


As more and more investors pursue not only the best performance, but also want their money to have a positive impact on the environment and society. It becomes important to learn how to invest responsibly so that we do not continue to fund and support irresponsible corporate behaviour that contributes to the ongoing climate issue.

If you want to learn more about all the different online brokerages that you can go about in green companies through, check out our results page of the best online brokerages in Singapore.

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