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This summer, it seems the whole world is either burning, drowning or being blown away. The weather is the news—and the reports are dire. Scientists say that July was a furnace. The hottest temperatures ever recorded in history sparked devastating wildfires across Canada and Europe. Meanwhile, in Japan, India and across the North American eastern seaboard, flash floods claimed lives, triggered mudslides and destroyed homes. Just as hurricane season was getting an early start, deadly tornadoes swirled through Mississippi, leaving 50,000 homes without power.

A boom in green investments

The global economy is feeling the heat but may not get out of the kitchen in time. At least one international insurer predicts that in about 30 years, climate change could wipe out as much as 18 percent of the total output of nations worldwide. That would be a huge hit to GDP everywhere.

Yet while it’s easy to get discouraged, there are good tidings, too. Judging by market activity, natural disasters are spurring people to avidly support companies looking to reverse—or at least mitigate—the impacts of climate change.

The proof? During the turbulent economy of 2022, investments in green initiatives radically outstripped those in many other sectors. What’s more, the U.S. Inflation Reduction Act is sinking hundreds of billions of dollars into projects designed to set the planet right. And across the pond, the EU’s Green Deal could add another €1 trillion to the pot.

All told, according to McKinsey, investments to offset climate change could top out at $12 trillion annually by 2030.

Assessing the stocks

But if you want in, your work is just beginning. In 2020 alone, by one estimate, 3,000 globally listed companies had links to the green economy—and by now there are likely hundreds more. Given the size of the field, how can you tell who’s walking the walk?

Here are just a few of many questions to ask before plunking down your dough:

• Is the company third-party certified green? Scan this list of widely recognized credentials to find out. CSRHub is another good resource for this purpose.
• Does the company’s product or service jibe with government policies that could make it eligible for business or funding? Get an overview of the U.S.’s Federal Sustainability Plan here and of the European Green Deal here.
• Is the company next-generation green? Wind and solar power have gone mainstream. Electric vehicles are poised to do so. It’s not too late to invest in those fields. But for real ground-floor opportunity, look to firms at the forefront of new tech such as energy harvesting, green hydrogen and other innovations.
• Does the company attract talent? Check out boards of directors and C-suite rosters to get the bona fides of the enterprise’s leadership teams. Do they have star power and a plan to draw the best and the brightest?

Now, to the nuts and bolts

Keeping those factors in mind, here are some businesses to watch as the green economy finally begins to bloom. They generally fall into the following five categories:

• Firms that cut or kill emissions: There’s particular buzz around enterprises working on sustainable aviation fuel. One leading the pack is Neste (NTOIF). This Finnish energy refiner, with clients like American Airlines and KLM, recently partnered with Marathon Petroleum Corp (MPC) to build a renewable fuel production facility. Another contender in this category is FuelCell Energy Inc. (FCEL), which produces non-combustible emission-free fuel.
• Firms that clean the air: One example is Aker Carbon Capture (AKCCF). The company uses its decade-long experience with modular capture plants to trap emissions from gas and coal fired power plants, refineries and cement industries. Then there’s Equinor (EQNR), which has CO₂ storage facilities in Europe and is developing ways to transport captured emissions across borders.
• Firms that boost energy efficiency: One such is Energy Recovery, Inc. (ERII), which manufactures devices that retrieve energy from water and CO₂ As well, there’s privately held Ambient Photonics, an energy harvesting enterprise. Its approach: using indoor light as an energy source in a way that could ultimately replace disposable batteries.
• Firms that use tech to for green monitoring: A well-established company that fits this category is Planet Labs (PL). The enterprise’s 200 satellites constantly keep track of the conditions of food crops, rainforests, oceans and rivers. Meanwhile GridX, which operates under the Greentech banner (a private firm), uses AI and other digital assets to help businesses migrate cost-effectively to clean energy.
• Firms that support green initiatives: A leader in this regard is ChargePoint Holdings (CHPT), which boasts the world’s largest electric vehicle charging network and has software as a service to keep it functioning.

In the end, all this activity means there’s room for optimism—and that investors who cherish the planet could help save the day. But everyone—businesses, governments and consumers—need to act together. And fast. Because time is of the essence.