Benefits of investing in sustainable businesses through crowdfunding
Investing in sustainable businesses through crowdfunding has many benefits.
First of all, it allows you to support a good cause. It also provides a platform to diversify your investments, obtain higher returns and gain access to exclusive opportunities.
Investing in sustainable companies has many advantages. Sustainable companies have the potential to grow faster than non-sustainable ones, because they have more room to expand. They can often produce higher returns than non-sustainable ones. They also tend to be less risky financially.
Tax issues and incentives associated with investments in sustainability, but not in Italy
In Italy, the relevant law is Art. 1, paras 43 and 44 of Law No. 205/2017. As regards the Italian Revenue Agency, reference is made to ministerial resolution No. 56/E of 2020, and to the more recent reply to ruling request No. 687 of 2021. In addition, reference can also be made to Investimenti sostenibili 4.0: an aid scheme supporting new innovative and sustainable business investments throughout the national territory.
For financial and operational purposes, segregated accounts held at bank branches or with dedicated companies are frequently used: this guarantees the transaction until the amount needed for the project is reached. In Italian legislation on the matter, some issues have yet to be clarified: for this reason, it is advisable to turn to well-known bodies and platforms that can support the investment securely.
Investing in sustainable companies: the case of the USA
In the United States, where the first crowdfunding legislation was the JOBS Act of 2012, tax breaks and incentives are offered to investors who support sustainable businesses. Investors can deduct up to 30% of their net income for investments in renewable energy and sustainable technologies. This is in addition to the federal tax credits available for investments in solar and other renewable technologies. In 2019, the tax credit for photovoltaic solar systems was reduced from 30% to 10%.
Investors can also deduct up to 50% of their net income for investments in water, wastewater and other environmental technologies. In addition to the federal tax credits and deductions available for investments in sustainability, there is also a federal incentive, the SBIR (Small Business Innovation Research) Program, which helps early-stage sustainable companies to raise capital.
How to choose a sustainable company to invest in
If you want to invest in sustainable businesses, make sure you choose a company that genuinely has a positive impact on the environment. Sustainable companies have a positive impact on the environment by reducing their environmental footprint, conserving resources and adopting new technologies.
The best way to choose a sustainable company to invest in is to examine its financial data and its sustainability strategy.
Sustainable companies use resources efficiently; they invest in advanced technologies; they have eco-friendly products.
You can assess a company’s financial data and sustainability strategy by examining its annual report, its financial report and its sustainability report. These reports will give you information on the company’s finances, its sustainability strategy and its environmental impact.
The most important global networks for sustainable investment
- Sustainable Business Alliance is a network of investors, entrepreneurs and organisations that supports sustainable businesses, founded in 2004. Members of this alliance can access resources, including a database of companies and investment guides.
- Impact Investment Network: is an online network of investors who want to invest in sustainable businesses. You can use this network to find sustainable businesses that are raising capital.
- Sustainable Investment Institute is a network of investors that provides resources for sustainable investment. It has a database with information on sustainable companies and a list of crowdfunding platforms.