According to the consensus of the global scientific community, the consequences for Earth are dire if we fail to reach net carbon neutral emissions by 2050. By now, the warnings are familiar to most: catastrophic droughts leading to widespread famine, rising sea levels leading to coastal flooding, and increasingly severe weather patterns.
Yet while scientists all agree on the need to curb carbon emissions, not everyone is on the same page as to how to go about it. After all, if there were an easy, magic-bullet source of clean, green energy, we would have done it already.
The reality is that all of the options currently at our disposal come with caveats. Nuclear power is clean, safe, and efficient, but no one has come up with a long term solution of what to do with all the radioactive waste piling up. Hydroelectric energy is incredibly powerful, but an ill-placed dam can practically destroy an ecosystem and often displaces people. And wind turbines kill hundreds of thousands of birds each year
It all can feel paralyzing, however, inaction at this point is an indefensible choice. For ethically minded investors, it is critical to make informed, conscientious choices when the green energy space.
As a case study, let’s look at the ethics of solar energy, one of the fastest growing sources of renewable green energy.
The Case for Solar
Solar energy has managed to sustain steady, impressive growth over the last decade, leading many to speculate that it shows a great deal of promise in weaning the world off its dependence on fossil fuels. The benefits—and the reasons to invest in it now—are myriad.
From a conceptual standpoint alone, solar power is very appealing. Given that the sun’s hydrogen reserves are set to last another 5 billion years and change, the sun’s light is an abundant resource, one that already powers much of life on the planet. A single solar panel can generate 250 to 400 watts of electricity.
Solar power is highly versatile and although the upfront investment in installing solar panels is often considerable, once in place, they last for years with minimal maintenance. Unlike wind farms, which often require vast swathes of land, solar panels can be affixed to the rooftops of commercial buildings and residential dwellings.
Solar is also increasingly competitive when it comes to LCOE (levelized cost of energy). From a financial standpoint alone, solar energy’s rapid growth makes it a sound investment. According to some experts, the amount of available solar power may quadruple in the next decade.
Doing the Research
While the potential for solar energy is enormous, ethically minded investors will still want to do their homework on the downsides. For starters, solar panels are difficult to responsibly dispose of, leading to a growing wave of “solar trash.”
“The industry’s current circular capacity is woefully unprepared for the deluge of waste that is likely to come. The financial incentive to invest in recycling has never been very strong in solar,” according to The Harvard Business Review.
Even more disturbingly, a series of reports in 2021 found that some of the world’s biggest producers of solar panels rely heavily on Chinese manufacturing operations based in Xinjiang. Although GCL-Poly, a large Chinese manufacturer of polysilicon, denies that it relies on forced labor, both human right activists and scientists have called this into question. Given the extensively documented human rights abuses against Xinjiang’s Uighur population, both international corporations and governments have pushed back against this.
Investors are in a rare position to make their ethical concerns heard here. Corporations are more likely to listen when their bottom line is at stake. By demanding greater supply chain transparency, and vocally advocating for solar panels demonstrably produced without the use of forced labor, investors can make a real difference.
Making Ethical Choices
Like so many things, solar panel manufacturers are not created equal. A handful of company have staked their reputations on leading the industry in ethical standards. That extends to everything from responsible disposal of waste materials to labor sourcing. Above all, it means adhering to a high standard of transparency.
Canadian Solar, for instance, proudly sticks to strong Environmental, Social, and Governance (ESG) goals. Meanwhile, Norway-based REC has long been seen as an industry leader in sustainability and ethics. SunPower has a track record of sticking to ambitious ESG goals as well.
None of these companies are beyond scrutiny, but they offer a sound beginning to an ethical green-energy investment portfolio. By rewarding companies that go the extra mile to ensure that their solar panels are truly sustainable in all senses, investors can help make an impact that will last for generations.
Posted 27 Nov 2024
