As families navigate their health and their money in the midst of a global pandemic, it’s important to look at new lifestyle choices that can benefit both body and portfolio. Sustainability (e.g., green living) has become a major topic of discussion in the health and business world. There are plenty of documentaries and studies on the benefits of plant-based diets, as well. You may want to read more about them in a previous article, “The ESG Investor and the Food Revolution: Embracing a Plant-Based Diet” by vegan investor Tyler Mayoras.
But before taking the deep dive, here’s a quick primer on how green living goes hand-in-hand with green investing.
Let’s start with an introduction to nutrition in the U.S. But we warn you, it isn’t pretty. Despite having the highest GDP and arguably the best medical care in the world, the U.S. is not the healthiest population. In fact, we ranked 46th in terms of life expectancy by the World Health Organization in 2020.
The U.S. is near the top of some other, more ominous categories. We are number one in obesity among countries with at least 50 million in population. We also have the 17th highest mortality rate from cardiovascular disease. Plus, we are 5th for cancer rates per 100,000 of the population. Want to know the common denominator? We are the clear leader in meat consumption, consuming a massive 219 pounds of meat per person each year.
Eating a plant-based diet used to be hard. It meant you typically had to cook all of your own food. However, times have changed dramatically. There are now a multitude of delicious options for those with plant-based diets at restaurants and grocery stores across the U.S., making eating vegan or plant-based much easier.
There are a variety of great prepared food options available, including: Amy’s Kitchen, Beyond Meat, Cool Beans, Ripple, Gardein, Daiya, Lightlife and Sweet Earth Foods.These can help you prepare whole, plant-based foods at home as much as possible.
There are also a growing abundance of restaurant chains that offer plant-based foods, including Native Foods Café, Veggie Grill, PlantPower and ByChloe. Most restaurant chains—including Panera, Pret-A-Manger and Chipotle—have now added vegan options to their menu and are amping up their plant-based options. If you’re looking for great plant-based diet options in your area, I recommend checking out the free mobile app, Happy Cow. It helps you find restaurants with good vegan and vegetarian options anywhere in the world.
These green options are also indicative of a growing market, which is an opportunity for sustainable investing.
Aside from going plant-based, you can choose to be an ESG investor and invest in sustainable companies that promote healthier foods and healthier food processing. By eating fewer animal-based foods and shifting our productive capital towards more sustainable companies, we not only improve our own health, but we help improve the health of our country and community.
Sustainable investing can also be a good way to diversify your portfolio as well. A 2019 white paper produced by the Morgan Stanley Institute for Sustainable Investing found that during turbulent markets, such as in 2008 and 2018, traditional funds had significantly larger downside deviation than sustainable funds. This means that traditional funds had a higher potential for loss than ESG funds.
Consider Bloomberg’s fourth annual ranking of ESG funds. It found that assets managed by 75 retail funds climbed 34% to reach $101 billion in 2019. Nine of the biggest ESG mutual funds outperformed the S&P 500 last year, and seven beat their market benchmarks over the last five years.
Even in 2020, ESG funds managed to post strong performance. The investment research company Morningstar analyzed 26 sustainable index funds in Q1 of 2020. They found that 24 outperformed comparable traditional funds in the midst of the COVID-19 pandemic’s impact.
If you’re looking to become an ESG investor, make sure the funds have a high Morningstar Sustainability rating. If you’re vegan, or considering it, you’ll also want to make sure the funds have 0% exposure to animal testing. It can be difficult to find funds that have performed well over the past three years that also meet these criteria. But it is not impossible.
Some of the top ESG funds to consider include: iShares Global Clean Energy ETF, Janus Henderson Global Sustainable Equity and RobecoSAM Smart Energy.
It’s not realistic to expect everyone to convert to a fully plant-based diet—or pile their portfolio with ESG funds. Sustainable investing isn’t for everyone, but it can certainly be a great strategy for investing in a socially responsible way.
Additionally, you don’t have to commit to veganism to make a big difference to your health as well as the environment. Just consider limiting your consumption of animal proteins. You can even embrace a “flexitarian” lifestyle—eliminating some animal-based products but not all, and incorporating more plant-based protein into your life.
At the end of the day, find what works for you. And keep this in mind: by making small changes to your lifestyle and your portfolio, you can make a positive change for your health, your wallet and the planet’s future.
©All Rights Reserved. January, 2021. DailyDACTM, LLC d/b/a/ Financial PoiseTM
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