Green chip stocks: Green chip stocks are the stocks of those companies that are listed on the exchanges and operate in environment friendly sectors. They are the companies having eco-friendly, sustainable products/services as the business models. These are the stocks of the companies whose business models are beneficial to the environment as a whole. For this reason, green chip companies often enjoy many benefits in the form of encouragements from the government.
Following are few examples:
1. Solar energy:
Companies engaging in solar based business models such as generation of solar power, manufacturing of solar based equipment and tools, any other products/services based on solar energy come under this sector.
Companies like SolarCity a subsidiary of Tesla of Elon musk which have their business based on solar services are contributing a lot to the environment. Tesla is an ideal green chip stock.
2. Geo-thermal energy:
Geo-thermal energy is generated from the original formation of the planet and from radioactive decay of materials. Though this is not as popular as solar energy, it’s now gaining the momentum.
In India, companies like Panx Geothermal, Tata power and NTPC are working in this area.
3. Wind energy:
Generation of energy from wind and usage of the same as an alternative to conventional sources of energy is the main theme of this.
In India, companies like Suzlon energy limited, Wind World India limited and Inox Wind limited are the green chip firms operating in wind energy.
4. Ocean energy:
Generation of energy from tides and waves in the ocean comes under this category. Energy is generated from the fast movement of water in the ocean.
5. Green construction:
Also called as green building/sustainable building, it is the structure and the application of processes that are environmentally responsible and resource-efficient throughout a building’s life-cycle.
6. Green infrastructure:
Green infrastructure is an approach to water management that protects, restores, or mimics the natural water cycle. Green infrastructure is effective, economical, and enhances community safety and quality of life. It includes storm water management, climate adaptation, less heat stress, more biodiversity, food production, better air quality, sustainable energy production, clean water and healthy soils.
7. Carbon trading:
Carbon trading is the process of buying and selling permits and credits to emit carbon dioxide.
For example trading of carbon credits between Bhutan (A carbon negative country) and India where India purchases the Bhutan’s unutilized credit to emit carbon di oxide for some price.
8. Dealing in organic foods including organic farming:
Companies engaged in organic food business. It includes production & processing of food using organic methods.
9. Green transportation:
Green transportation involves usage of eco-friendly, renewable energy operated modes of transportation such as electric vehicles and vehicles that are run using Hydrogen Fuel Cells etc.
Companies like Tesla motors, Lit Motors have really been doing well in green field alongside of giving good returns to the investors.
Green chip companies are very important in today’s age of increasing pollution, global warming and climate change. Sustainable green technologies should be encouraged by the investors to scale up the business to achieve improved access to clean energy and affordable and green transportation complemented by increased health and better living conditions..