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Green investing can be good for both your wallet and the environment
Anyone considering green funds should do so as part of a balanced portfolio
- PUBLISHED: Thu 24 Jul 2025, 2:33 PM
Climate change is often a topic of conversation in the news. But it can also be part of your investment strategy – investing in companies that are sustainable and helping to protect the planet. Billions of dollars continue to flow into sectors such as renewable and clean energy (solar, wind, hydro), sustainable agriculture and water conservation. This is broadly known as green investing, and sits under the much larger Environmental, Social and Governance (ESG) umbrella.
ESG assets are on track to surpass $40 trillion by 2030, according to the latest report from Bloomberg Intelligence (BI). With these vast inflows of capital, come opportunities for individual investors. UAE-based Sophia Bhatti, the founder of Wimbledon Wealth, says: “Green investing is no longer niche, it’s now a mainstream priority for investors who want returns with impact. From clean energy to water tech and sustainable real estate, ESG-focused funds are attracting global capital, and the UAE is no exception.”
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Planet over profits
When you start investing in equities and funds, the key is to diversify your money across a range of different regions (North America, Asia etc) and sectors (manufacturing, technology, finance etc). Anyone considering green funds should do so as part of a balanced portfolio. One of the reasons why people don’t consider green investing is the perception that it leads to lower returns than traditional investing.
Angela Homsi is a sustainable tech entrepreneur, and founder of Ignite Power, a clean infra-tech company. “Private investors are increasingly recognising that ESG is not just ethical - it’s financially strategic. Younger investors, especially millennials and Gen Z, are pushing ESG from niche to norm.” In other words, being energy efficient can be a profitable strategy for a company.
Homsi adds: “Done right, ESG investments are not a trade-off. It is actually a better bet than many struggling industries of the past.” Historically, she said ESG-aligned portfolios have performed as well or better than traditional benchmarks over time.
Green washing
Some critics have used the term ‘green washing’ to describe a marketing tactic where companies falsely portray their products or services to appear more environmentally-friendly than they are. So how can investors ensure their money is going toward truly sustainable projects?
“If it is a fund then it is important for the investor to know the underlying companies in the portfolio and do the research on what makes those companies sustainable or not,” says Dr. Miniya Chatterji, CEO at Sustain Labs Paris. “One way to do this is to look for these six aspects in any investment - resource efficiency, social entrepreneurship, clean revenue, supply chain, employee wellbeing and human rights, plus the financial sustainability of the company.”
Homsi feels the key is to focus on transparency. “What the bulk of the business does and how. Plus the actual impact data that goes a mile deep and an inch wide rather than the opposite.” Green investment experts can offer a direct line of sight between the capital invested and the outcome, whether it is a household, business or a school. Positive outcomes include more electrification, reduced carbon and local jobs created. “These are all transparently verified digitally in real time. Real impact is measurable, and we hold ourselves accountable to that standard, and not fall for the fakes.”
Bonds and funds
Masdar describes itself as “one of the world’s fastest growing renewable energy companies and a green hydrogen leader, placing the UAE at the forefront of the energy transition.” While Masdar itself is state-owned, it has issued green bonds to private investors. For example, the 2023 Masdar Green Bond Programme raised $750m to fund solar, wind, and battery storage. There is also a Masdar Green Reit, focused on UAE-based sustainable real estate assets. Other providers have also issued green bonds such as ADCB and DP World, which issued a sukuk, similar to a bond, but structured to comply with Sharia law.
Then there is a host of green funds to choose from that spread your investment across a range of different companies. There are well-established funds like the iShares Global Clean Energy ETF or BNP Paribas Energy Transition that have gained traction, while newer vehicles are targeting everything from carbon capture to biodiversity. “Many of these funds offer average annual returns between 6 per cent and 12 per cent, though like all investments, they carry risk, especially in fast-evolving sectors,” says Bhatti.
Marilyn Waite, managing director of the Climate Finance Fund (CFF), adds: “If I were a retail investor in the Middle East, I would purchase a green sukuk, place my cash with a fossil fuel-free bank and purchase climate stocks in the Global South.” She recommended searching a comprehensive list of publicly-listed companies that generate more than 50 per cent of their revenue from climate solutions at www.climatesolutionstocks.com.