James Dennin, Kapitall: Miners can be environmentally destructive. So we found 6 raw materials stocks focused on the environment.
Raw materials, the sector which pulls stuff out of the ground and turns it into something that consumers or manufacturers need, often comes with great environmental costs.
Read more on Green Investing from Kapitall: Green Investing: Four Stocks With Falling Emissions and Rising Profits
Many of these firms produce or mine things like coal and oil – which generate destructive greenhouse gases when consumed. And mining firms – whether they mine gold or steel – often use large amounts of energy in the process of extraction and refinement, while also completely re-shaping the natural landscape to unearth new sources.
However, not all polluters are created equal. Some have turned to green alternatives when it comes to their methods. These kinds of green investments can have a compounding effect on a company's bottom line. They can lower the risk of fines, place a company ahead of new regulations, lower opportunity costs, and generate good will. With that in mind we decided to build a list of green(er) investments among raw materials stocks.
Before we present the list, it needs to be said that there are still many ways to invest in companies that don't pollute at all. However, there are also ways for you to get a slice of the pie while also encouraging and supporting firms that seem to consider the environment in their operations.
Today's screen was tricky to develop because it involved a lot of intangibles. For instance, companies with astronomical revenues can easily donate some of their profits to green causes. If you're a particularly egregious polluter this process is called "green washing."
I didn't want to include stocks that are simply philanthropic. Most companies give away money to some degree. I wanted to find firms that are making investments that benefit the environment and the company alike.