The shades of grey in sustainable investment

A documentary film called ‘Planet of the Humans’ was recently released online to much controversy. For those of you who haven’t seen it, it describes itself as a “full-frontal assault on our sacred cows’, arguing that renewable energy and green movements have been hijacked by the traditional form of capitalism, and that these technologies are not as good for the environment or society as we’re led to believe.

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Remote Working

For four weeks now, the majority of our firm has worked from home. Thanks to a fantastic head of IT, and significant investment in video conferencing last year, our work has continued without a blip. Each in our own homes we’re able to use our systems, securely locate files from our drives and speak to each other face to video-face whenever we need to.

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The environmental silver lining

The COVID-19 pandemic is causing enormous disruption to many parts of our lives – our health, our jobs, the economy, and our sense of security. It’s a devastating and global catastrophe. But one small silver lining is that it is creating a truly once-in-a-lifetime opportunity to realise the environmental effect of our usual levels of human activity, and how quickly the natural world rebounds when we’re quarantined at home.

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ESG rating bias and the key role played by internal bottom-up ESG analysis

European Small Cap Equity

We’re regularly baffled by the ESG scores for companies we know are committed to a sustainable future

We are often vocal about the shortcomings of ESG ratings. This frustration is particularly acute for our European Small Cap Equity team who invest in companies that often do not have any coverage from ESG agencies. For those that are rated, the grades rarely reflect what we understand of the company through our bottom-up analysis and regular company interaction. We’re regularly baffled by the ESG scores for companies we know are committed to a sustainable future.

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ESG investments in a bear market

In the incredibly volatility seen this week, we’ve seen some interesting trends and news items in sustainable investment. The pressure in the market is something of a day of reckoning for sustainable investment, as some critics might imagine that ESG credentials take second place when capital preservation becomes the priority. But so far ESG investment is showing itself to be sticky and attracting new investment from long-term investors during this volatile period. It’s a sign that ESG funds are making their way into model portfolios and long-term allocation strategies from advisors.

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The Global oil industry & emission targets

As we talk about the fossil fuel industry, there is a noteworthy disparity in the approach between the top six European producers and other global players when it comes to climate change. European firms have pledged to significantly reduce their carbon footprints alongside investing into innovative low-carbon technologies. These strategies are a response to the new European Green Deal. Conversely, American oil and gas companies as well as Russian, Chinese and Saudi nationalised companies seem not to take the same path.

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Palm Oil

The spotlight in recent weeks has shifted back upon the palm oil industry. The negative connotations associated with the sector have continued to deepen, but there is a growing number of producers who offer a differentiated product, one made with a focus on sustainability. Worldwide, demand for the commodity has continued to rise which brings nations and climate activists to a crossroad, wondering whether sustainable palm oil can be produced whilst fighting climate change.

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The European Green Deal

The ambitious climate mission led by Ursula von der Leyen is starting to gather steam. Europe wants to be the front-runner in climate friendly industries and clean technologies. The policy package comprises of measures to tackle climate and environmental-related challenges through a resource-efficient and competitive economy. The overarching objective of this European project is to become the first carbon neutral continent by 2050 all whilst being the second largest consumer market globally. In order to attain this goal, by 2030 GHG emissions need to be cut by 50-55% of 1990 levels, the figure previously stood at 40%.

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Davos 2020

Photo by Evangeline Shaw on Unsplash

Climate urgency

The attention of business leaders and experts on the climate emergency is higher than ever. This is what emerges from the latest Global Risks Report published every year on the eve of the launch of the World Economic Forum. For the first time, the 750 business leaders and experts from all over the world ranked five environmental and climate issues as the most important risks facing the world in the coming year. In particular, it is climate inaction, extreme events and biodiversity loss that concern world decision-makers, factors that hadn’t made the list before ten years ago.

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Digital Footprint

While you don’t see plumes of black smoke being released by the GAFAs (Google, Apple, Facebook, Amazon), you’d be wrong to assume they don’t have a significant environmental impact. Every search, click, or streamed video consume a huge amount of energy and sending a simple email has in reality a whole energy-intensive journey.

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