4 ESG Funds Picks To Beat Rising Environmental Issues

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Environmental, social, and governance (ESG) issues have grabbed investors’ attention over the last decade and the pandemic has only accelerated the trend. ESG now stands at the forefront of positive change. Investors are focusing more on better management of material environmental, social, and ESG risk exposures and in turn pushing businesses to emphasize on infrastructure and corporate value creation.

Signs of climate change have become more prominent over the years, starting from California wildfires to Hurricane Ida, meteorologists and environmental activists are constantly expressing their concerns. Bigwigs like Microsoft’s co-founder Bill Gates are also putting in efforts to slow down the climate clock. In mid-August, Gates pledged $1.5 billion for projects to combat climate change if the Congress passes the infrastructure plan, as a part of his climate investment fund. Breakthrough Energy, a firm run by Gates’ fund, would spend the hefty amount over a period of three years to lower emissions, focus on zero-emissions plane fuel, long-duration energy storage, green hydrogen and direct air capture.

Environmental issues like heatwaves and rising sea levels have drawn sustainable investments. In the first quarter of this year alone, investors poured $178 billion into green investment funds globally. Now with Biden administration’s ambitious climate goals, including cutting greenhouse gas emissions in half by 2030, carbon-free electrical grid by 2035, and becoming a net-zero-carbon nation by 2050, environmental investing is surely at the forefront of positive change. The bill is still in the negotiation phase but opens up opportunities for green investments. Fund houses like Fidelity Investments are expanding their ESG/sustainable investing line-up. In June, Fidelity added five actively managed ESG funds, offering investors and advisors 11 ESG mutual funds and ETFs. Notably, the three new actively managed mutual funds are Fidelity Climate Action Fund (FCAEX), Fidelity Environmental Bond Fund (FFEBX), and Fidelity Sustainability U.S. Equity Fund (FSEBX), with no minimum investment.

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