what is a green fund 
a green fund is a mutual fund or another investment vehicle that will only invest in companies that are deemed socially conscious or directly promote environmental responsibility a green fund can come in the form of a focused investment vehicle for companies engaged in environmentally supportive businesses such as alternative energy green transport water and waste management and sustainable living understanding green fundsgreen funds are investment funds whose portfolio is largely based on environmental social and governance esg criteria a green fund s investment strategy can be based on some of the following characteristics based on performance it is not yet clear whether green funds and socially responsible investing sri can consistently create better returns for investors but they do represent a proactive step toward environmental consciousness which many investors see as valuable history of green fundssome have cited green investing as having begun in earnest during the 1990s a period where investors were more seriously taking into account the harm businesses or the pressure entire industries were putting on the environment in the wake of headline grabbing events like the exxon valdez oil spill and protracted fights over logging rights in the pacific northwest a set of investors began to focus their attention and resources on those businesses that were better at managing their environmental impact than more traditional enterprises for some investors these businesses were not only operating in a more ethical manner but also had a competitive advantage over companies who were ill equipped to reduce their impact on the environment others saw an ethical obligation to invest in technologies and businesses that could contribute to building a sustainable society through renewable energy sources following the exxon valdez oil spill of 1989 congress passed the oil pollution act opa of 1990 which strengthened the powers of the environmental protection agency epa to prevent future oil spills and to punish polluters 23types of green fundsgreen funds invest in areas such as renewable energy and buildings and efficiency sectors the renewable energy sector is a broad one including solar energy wind battery and energy storage technologies as well as the materials that help make those technologies possible the buildings sector includes builders who use energy efficient materials making each building s carbon footprint smaller whether they re being used for commercial residential or office use socially conscious investing has continued to gain in popularity largely due to increased worldwide exposure to the issue of climate change as well as increased federal funding for alternative energy and other programs since 2009 the green transition scoreboard a project run by ethical markets media has tracked a cumulative 10 39 trillion invested in the green economy through the end of 2019 4the total investment in the green economy between 2009 and 2019 4performance of green fundsmoney has poured into green funds as investors seek both socially responsible investments and returns from the uptick in green technologies such as wind and solar power according to the forum for sustainable and responsible investment there were 3 1 trillion in assets managed by registered investment companies with esg criteria such as mutual funds and index funds in 2020 5despite sometimes high fees the funds have also garnered relatively solid performance according to morningstar sustainable funds in 2019 outperformed conventional funds with 66 finishing in the top half of their categories and 35 finishing in the top quartile the returns of only 16 of sustainable funds finished in the bottom quartile in 2019 the number of sustainable funds grew to 303 open end and exchange traded fund etfs 6