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art of modern life is worrying about environmental calamity:
Millions of tons of garbage in the ocean, dwindling resources,
and horrendous natural disasters brought on by rising global
temperatures. We all want to save the world, and we all have different
thoughts on what the danger is and how to fix it.
But money talks, and these days, the chatter is all about climate
change. Investors poured more cash into funds that invest with sus-
tainability in mind in 2019 than in the previous two years combined.
The reason? “Climate awareness,” says Jon Hale, head of sustainability
research at investment research firm Morningstar.
In 2019, the planet recorded its second-warmest year since modern
record-keeping began in 1880, according to two independent studies
by scientists at NASA and the National Oceanic and Atmospheric Ad-
ministration (the warmest was 2016). In Australia, extreme heat and
high winds fueled gargantuan brush fires that killed at least 24 people
and devastated wildlife, with the final economic toll yet to come.
Meanwhile, according to insurance giant Aon, flash floods in the U.S.,
China, India and Iran accounted for some of the priciest disasters in
2019, tallying combined losses of $53 billion. All told, 2019 closed the
costliest decade for natural catastrophes yet. Earthquakes, tsunamis,
tropical cyclones, flooding, wildfires, droughts and extreme tempera-
tures contributed to $2.98 trillion in economic damages and losses,
$1.1 trillion more than in the previous decade.
Those costs will keep rising and could impede the rate of economic
growth in this century unless we grapple with climate change now, says
the U.S Global Change Research Program, a congressionally mandated
group. Certainly, more investors are addressing the issue through their
portfolios. “Call it a tipping point if you want, but concern about climate
change is top of mind for all investors,” says Morningstar’s Hale.
BlackRock, the world’s biggest money manager, recently announced
that it would integrate sustainable investing principles and processes
into every part of its business, including how it invests clients’ money.
“Climate change has become a defining factor in companies’ long-term
prospects” because “climate risk is investment risk,” BlackRock chief
executive Larry Fink wrote in his annual letter to CEOs in January.
We’ve highlighted six stocks, 10 stock funds and three bond portfolios
on the pages that follow. The companies underlying these investments
address some of the world’s thorniest environmental challenges and
are prospering by doing so. They should put some green in your portfolio,
too. Returns and other data in these stories are through January 31.04/2020 KIPLINGER’S PERSONAL FINANCE 21