Impactful investing...moving beyond ESG to meaningful returns and measurable impacts.
Allocating capital for future generations...it's time to future proof your portfolio.
Greetings and welcome to Issue #3 of Impactful Investing!
It isn’t easy being an environmentally guided investor. In Australian, many publicly listed companies disclose environmental, social and corporate-governance (ESG) data in voluntary sustainability reports yet certainly not within their financial statements. As a result, the information companies report is inconsistent, making comparisons difficult if not impossible. Investors’ difficulties don’t end there. It also can be hard to tell the difference between real environmental and social commitments and the overstated claims companies make.
Many investors simply find that deploying capital to match their ethics to hard or believe that their super fund will cover this on their behalf. An investigation into a few large super funds show that they often do not manage the funds and place them with external managers that have inconstancies with Responsible Investing.
So with this is mind I want you to consider renewables and when is the time to invest and deploy some capital. Here are some consideration.
Renewables
Now is the time to ramp up and decarbonise the Australian economy. Currently we as Australians have a profitable resource sector and abundant research and development occuring within new technologies. The time to invest in new renewables is when :
there is a global movement,
there is a consumer support,
there is tangible improvements in the efficiency of renewable energy.
Global leaders (yes I exclude Trump) are now and only now putting tangible and realistic goals in place to decarbonise. Prime Minister Boris Johnson of Britain said on Tuesday that he would aim to quadruple the electric generating capacity of wind turbines installed in the seas around the country by 2030.
The East Anglia One wind turbine project off Britain’s east coast.
As Saudi Arabia is to oil, the U.K. is to wind,” Mr. Johnson said in a virtual speech to a Conservative Party conference. His proposal would expand Britain’s offshore wind generating capacity to 40 gigawatts from roughly 10 gigawatts.
https://www.nytimes.com/live/2020/10/06/business/us-economy-coronavirus#boris-johnson-seeks-to-greatly-expand-britains-offshore-wind-generation
Alternative-energy investments are leaving their traditional peers in the dust. Those Funds that are seen as benefiting from the Biden win have surged more than 80% this year, betting they stand to benefit from presidential candidate Joe Biden’s green-energy proposals.
Mr. Biden has outlined a $2 trillion plan to fight climate change and has pledged to put the U.S. on a path to a 100% clean-energy economy by 2050.
Its the authors belief that existing energy providers should not be excluded from an investment portfolio that is attempting to drive investment dollors to a decarbonised economy. Those existing players are required and necessary for constant and stable energy market. I was heartened to see Woodside is allocating albeit a small budget to hydrogen energy research. It will be the well capitalised business that can effectively meet the demand for safe, clean, affordable and reliable energy that contributes to global decarbonisation. Woodside’s efforts should be commended and a blanket exclusion treated with caution if you are truly attempting to balance investment returns with your sustainability goals.
As always I welcome your thoughts and please forward to this that are invested in leaving the world a better place and ensuring that their capital is deployed to meet Sustainability.