Why Exercising Your Power As An Investor Can Impact Climate Change

Betterment’s new Climate Impact Portfolio lets you support areas of the economy that are working to mitigate climate change, while maintaining a diversified portfolio with low expenses.

flower and law scales in bar chart

Climate change is arguably the paramount problem of our time. It can be overwhelming to think about how we, as individuals, can contribute to a solution beyond going to the polls.

The reality is that we don’t have to rely solely on political figures to influence change: by being intentional about where we place our money, we collectively have a lot more power than we think.

The purpose of climate-aware investing is to support areas of the economy that are working to mitigate climate change. That includes investing in companies with low carbon footprints, relative to their peers, and investing in global green bonds, which fund projects that advance alternative energy, energy efficiency, pollution prevention and control, sustainable water, green building, and climate adaptation.

How Climate Investing Makes An Impact

A financial plan with high investing fees and an undiversified portfolio isn’t a plan worth settling for. Nor is a plan that doesn’t align with your ideals.

Today, the movement to combat climate change is no longer limited to public protests and petitions. Sustainable investing is a grassroots effort, driven by consumers who are steering support away from companies that aren’t part of the solution, in favor of ones that do.

As more and more choose to invest this way, the collective effort can help accelerate the transition to a clean energy economy—not just in the U.S.—but worldwide. Here’s how:

What does climate impact look like? Try reduced emissions and reliance on fossil fuels.

Climate impact looks like offering more climate-aware alternatives. We know that increased carbon emissions caused by human activity directly contribute to global warming. Compared to the 100% stock Betterment Core portfolio, carbon emissions per dollar of revenue in the 100% stock Climate Impact portfolio are reduced by half.

That means that our investment into portfolios with a climate focus helps grow companies committed to a low carbon economy, which can influence other companies to follow suit.

By investing in the Climate Impact portfolio, you are actively divesting from some of the companies most reliant on fossil fuel, while actively favoring those who are best at cutting their carbon emissions.

That’s why we at Betterment are building a future where investors don’t have to choose between their values and their performance goals of globally diversified market returns. Now, they can have both.

Start with the Climate Impact Portfolio to help grow your money responsibly.

Regardless of how you choose to invest, Betterment aims to help you align your money with your values. That means not only offering a socially responsible investing portfolio, but also helping you identify your goals and invest for them appropriately. Learn more about our guidance and get started saving for your future.

Higher bond allocations in your portfolio decreases the percentage attributable to socially responsible ETFs.