12 Jan January’s Action: Green Investing for 2025
As we step into 2025, the urgency of addressing the climate crisis has never been greater. The Intergovernmental Panel on Climate Change (IPCC) warns that global emissions must halve by 2030 to keep global warming below 1.5°C. Achieving this requires a fundamental shift in how we invest, making green investing more important than ever.
Green investing refers to directing capital toward projects, companies, or financial products that promote environmental sustainability. It is a powerful way to align personal or organizational finances with climate action goals, helping to drive the transition to a low-carbon, resilient economy.
Environmental advocates have been urging individuals and institutions to divest from fossil fuels for over a decade now. Institutional divestment pledges worldwide have kept $40.51 trillion dollars out of the coffers of oil, gas and coal companies. Many of these divesting institutions are faith based groups, educational institutions (Harvard University among them) and pension funds. Individual investors who rely on a financial advisor or steward their own savings can also align their investments with their values, and, acting together, can have a big impact.
Campaigns to divest from fossil fuels not only seek to make it more difficult for companies like Exxon or Shell to find financing for new, climate-harmful projects, but also hope to stigmatize and de-legitimate these companies. Individual investors are a big part of this effort.
Why Green Investing Matters
Finance plays a pivotal role in helping to mitigate climate change. While governments set policies and businesses innovate, investments fuel the transition. Here’s why green investing is crucial:
Accelerating the Transition: Renewable energy, sustainable agriculture, electric mobility, and green infrastructure all require substantial funding to scale.
Mitigating Risks: Climate change poses risks to traditional investments. Companies dependent on fossil fuels face regulatory, reputational, and operational challenges. Green investments are often more resilient to such risks.
Creating Impact: Every dollar invested in climate-positive initiatives is a step toward reducing emissions, preserving biodiversity, and safeguarding communities.
Trends in Green Investing for 2025
As we look ahead, several trends are shaping the green investing landscape:
1. Growth of Green Bonds
Green bonds have surged in popularity, allowing investors to fund projects like wind farms, reforestation, and sustainable cities. In 2024 alone, global green bond issuance reached a record $700 billion, and this momentum is expected to continue. To learn more check out the Climate Bond Initiative.
2. ESG Integration
Environmental, Social, and Governance (ESG) criteria are becoming a standard for assessing companies. In 2025, more funds and portfolios are expected to integrate these factors, ensuring investments align with sustainability goals. These funds not only screen out fossil fuels, but also look at how companies are run, and even put pressure on participating companies to improve their business practices. Research Socially Responsible Investing, an investment strategy supporting companies that have a positive impact on the world in a variety of areas. To learn more about ESG investing, check out this Beginners Guide.
Challenges we face for 2025: According to The Wall Street Journal in 2025, Environmental, Social, and Governance (ESG) initiatives are encountering increased scrutiny and criticism. Several major U.S. banks, including Morgan Stanley, Citigroup, Bank of America, Wells Fargo, and Goldman Sachs, have recently withdrawn from the UN-backed Net-Zero Banking Alliance (NZBA), a coalition committed to reducing carbon emissions. This trend reflects a broader corporate shift away from ESG commitments, influenced by political pressures and anticipated regulatory changes under the incoming administration.
Despite these challenges, many companies and investors continue to recognize the long-term value of sustainable practices. However, the current environment has led to a more cautious approach toward ESG, with some firms scaling back or modifying their commitments to navigate the complex and polarized landscape.
What actions can you do? Increased pressure on companies from pro-ESG coalitions, such as As You Sow, CERES and the Interfaith Center on Corporate Responsibility have announced that they will continue to pressure companies to further advance their ESG initiatives. Get involved.
3. Solar, Wind, and Geothermal
These projects remain central to green investing. With advancements in energy storage and grid technologies, renewables are increasingly competitive and scalable. According to the International Renewable Energy Agency, IRENA “2024 marks a pivotal moment in the global energy transition as renewable energy surges to unprecedented heights. Yet, despite the remarkable progress, the pace of change remains insufficient to meet the ambitious goal of tripling renewable energy capacity by 2030.”
4. Nature-Based Solutions
From mangrove restoration to regenerative agriculture, investments in nature-based solutions are gaining traction. These projects not only mitigate emissions but also enhance resilience and biodiversity. To learn more, check out The Nature Conservancy.
How You Can Start Green Investing
Whether you’re an individual or a climate action organization, green investing is more accessible than ever. For starters, if you work with a financial advisor, call them and ask if they have expertise with fossil fuel free investing.
Educate Yourself: Learn about green investment opportunities and assess their impact. You can work with a financial advisor to find investment options that suit your vision.
Choose Your Vehicle: Options include green bonds, ETFs focused on renewable energy, or shares in sustainable companies.
Engage with Funds: Many financial institutions now offer ESG-focused funds. Ask your bank or advisor about their green investment options.
Advocate for Transparency: Ensure the funds or companies you support disclose their environmental impact and adhere to rigorous standards.
Challenges to Watch
While green investing is promising, challenges like greenwashing—misleading claims about sustainability—persist. As investors, it’s essential to conduct due diligence and support organizations that uphold genuine climate commitments. Influence Map is an independent think tank producing data-driven analysis on how business and finance are influencing the climate crisis.
Our Call to Action
For 2025, let’s harness the power of green investing to scale solutions that mitigate climate change, protect ecosystems, and build a more equitable future. By aligning financial flows with environmental goals, we can drive transformative change.
Together, we can make green investing the new norm and ensure our capital works for the planet.
Let’s invest in the future we want to see.