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Economy

A simple chart that proves sustainable investment pays off

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A note to all investors: if your financial adviser or someone else tells you that investing ethically or sustainably is synonymous with poor performance, show them this chart.

In the year to December 17, the best performing fund in the Blue & Green Investor fund library – Guinness Alternative Energy – returned an impressive 77.03%. The average total return for the top 20 is 37.33%.

The Guinness fund invests in those companies where 50% of their business is in the alternative energy sector. This means companies involved in business relating to energy from non-fossil fuel sources and companies involved in efficiency improvements. In addition they must be quoted on a recognised investment exchange and have more than $100m in market capitalisation.

It’s interesting to note that only one of the top 10 – Premier Ethical – that implements negative (ethical) screens in addition to positive screens. This means it excludes certain sectors (known as ‘sin stocks’) and seeks out the most sustainable companies.

The naysayers and sceptics will no doubt reply, “Maybe so, but what about their performance over a longer timeframe?

It’s true that some of the funds in the top 20 for one year have perhaps not performed brilliantly over, say, three or five years. But for enlightened sustainable investors, past performance is not a major factor. It is future performance that matters most, as sustainability becomes a more pressing issue and a more dramatic pressure on economic success.

A clean energy fund may have faltered over five years, while funds full of fossil fuel stocks skyrocketed, for example. But given what the science tells us about climate change, and what economists say about high-carbon assets becoming stranded (fossil fuel reserves that cannot be safely burnt), which of the two do you think is a better long-term investment?

Note: inclusion of L&G UK 100 index is an indication of how the UK equity stock market has performed over the same period.

These stranded assets, transparency, triple bottom line fiduciary responsibility, true and fair fees and corporate governance will all have a material effect on investment performance as we enter 2014 and beyond. Environmental and social impacts will have a greater influence as digitally-connected, socially-conscious investors enter the market, and we reach the limits of inexorable growth.

Companies, and the funds that invest in them, will increasingly be punished by their consumers, suppliers, competitors, law firms, governments and investors if they act unsustainably. The reckless profiteering of a more buccaneering financial capitalism may have finally had its day.

Please note that in accordance with the Financial Services and Markets Act 2000, Blue and Green Communications Limited does not provide regulated investment services of any kind, and is not authorised to do so. Nothing in this digital magazine and all parts herein constitutes or should be deemed to constitute advice, recommendation, invitation or inducement to buy, sell, subscribe for or underwrite any investment of any kind. Any specific investment-related queries or concerns should be directed to a fully qualified financial adviser.

Further reading:

Financial returns from ethical investment funds ‘better than mainstream’ in last 12 months

63% of UK investors want to be offered sustainable investment options

Environmental investment stocks outperform industry average over one year

Sustainable and ethical investors honoured at Investment Week Awards

The Guide to Sustainable Funds 2013

Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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Economy

IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”

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IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.

Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.

Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.

Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:

“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.

We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.

There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.

We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”

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