Quora Answer: How to Build a Portfolio Aligned with Carbon Neutrality Goals?

The following is my answer to a Quora question: “How could one invest in building a portfolio that is aligned with carbon neutrality goals?” 

Carbon neutrality is a state of net-zero carbon dioxide emissions.  If you truly want to balance out a portfolio, you need investments that are carbon negative, which is difficult.  Carbon neutrality is an ideal.  It is far from a reality.  While there is some effort to reduce carbon emissions, it is insufficient, and this is reflected in trying to build such a portfolio. 

Consider this, people would say they would invest in electrical vehicle companies such as Tesla.  That portfolio might do well, but it is far from carbon neutral.  The batteries require lithium, cobalt and other metals.  Mining is not even close to carbon neutral.  The disposal of those batteries is also an environmental problem.  This applies to renewable energy as well, since all that power collected must be stored somewhere – those same batteries. 

Carbon neutrality is more than simply building a portfolio.  It involves engagement with the people we invest in, and carbon reduction targets.  It involves influencing the development of the entire ecosystem in a pivot towards carbon neutrality, and an investment in carbon negative developments.  This is a process.