Is an Eco-Friendly Forex Trading Strategy Possible?
Detroit, MI
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March 09, 2023 05:00 AM Eastern Standard Time
Sustainable investing has been gaining traction over the past three years, as investors have begun prioritizing climate change mitigation. As governments and corporations worldwide take action on reducing their net carbon footprints, environmental, social and governance (ESG) investing practices will likely become one of the most popular investing strategies in the years to come.
But only a handful of online brokers facilitate eco-friendly forex trading.
Traders in the Forex Market Are Increasingly Focused on Sustainability
The forex market is one of the most sustainable financial markets, as all transactions are processed electronically. Brokers have been implementing several strategies to boost their sustainability efforts further.
This is in sharp contrast to alternative asset markets such as cryptocurrencies. Crypto mining is one of the leading causes of greenhouse gas emissions in certain markets, as it consumes huge amounts of electricity.
The U.S. houses almost 33.33% of total global crypto-asset operations and generates one of the highest greenhouse gas emissions from such activities. Crypto-related operations account for 0.9% to 1.7% of total electricity use in the U.S. — equivalent electricity use of all home computers and lighting in the country. Crypto-related activity also accounts for 0.4% to 0.8% of total U.S. gas emissions, equivalent to the emissions from diesel fuel from railroads.
While ESG investing in stocks seems efficient on paper, certain publicly-traded corporations often engage in greenwashing to entice investors. This happens when companies spread misinformation regarding their total greenhouse emissions or make fictitious promises regarding their carbon footprint reduction goals.
Optimizing Your Forex Trades to Support an Eco-Friendly Future
The most important step to becoming an eco-friendly forex trader is to choose an appropriate broker that engages in sustainable trading practices. Most eco-friendly brokers list their sustainability efforts on their websites, allowing potential traders to view the information with ease.
Knowing their vision and commitment to the environment is crucial, as brokers might use past practices as an advertisement to entice green investors without actually having any long-term resolutions. You can view the list of some of the best forex brokers here.
How Can You Develop An Environmentally Friendly Forex Strategy?
Using an eco-friendly forex broker is key to becoming a green forex trader, but there are several other ways to practice sustainable investing. Investing in forex from home through an online broker can help you reduce your total carbon footprint by saving gas spent on travel. In addition, using tools and strategies that consume lower energy also reduces greenhouse emissions.
Another eco-friendly strategy is investing in the currencies of countries that have committed to lowering their carbon footprints. Most Western nations have pledged to eliminate their carbon footprint by 2050. As such, many countries have signed the landmark climate change treaty the Paris agreement, which aims to limit global warming to 1.5 degrees Celsius.
According to the World Economic Forum, eight countries have already achieved carbon neutrality: Bhutan, Gabon, Madagascar, Suriname, Niue, Guyana, Comoros and Panama.
Put Eco-Friendly Forex Trading to the Test With CedarFX
CedarFX, a St. Vincent and Grenadines-based online forex broker, is one of the most prominent eco-friendly forex brokers in the market. Billing itself as the world’s first eco-broker, CedarFX has partnerships with environmental organizations. The 0% commission broker has partnered with the British environmental organization Ecologi to promote reforestation efforts.
The platform’s eco-friendly account, CedarFX Eco Account, contributes $1 for every dollar paid by traders. CedarFX, along with Ecologi, has planted 125,859 trees as part of its pledge to plant 10 trees for every lot traded through the platform. The platform also supports The Gold Standard, a Switzerland-based nonprofit that sets quantifiable standards for climate and development interventions. You can view the CedarFX platform’s features and offerings here.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.
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