We are into the penultimate day of National Ethical Investment Week (NEIW) 2013, and today’s ethical investment pioneer is Mark Hoskin of Holden & Partners.
He follows UKSIF chief executive Simon Howard, Sebastian Parsons of Stockwood Community Benefit Society, Paul Ellis of Ecology Building Society, James Vaccaro of Triodos Bank, Claudia Quiroz of Quilter Cheviot, John Ditchfield of Barchester Green and Clare Brook of WHEB Asset Management.
Financial advisory firm Holden & Partners is based in London. As well as being a partner in the company, Hoskin is also the founder of Worldwise Investor, which now is Blue & Green Investor and represents the investment section of Blue & Green Tomorrow.
Tell us about Holden & Partners. What’s your mission?
Whatever your aspirations or goals in life, we aim to make the most of your wealth. We provide comprehensive financial planning and investment management solutions, with expertise in ethical and green investment.
Our mission focuses on sustainability. We would like to see many more investors taking this seriously and we hope to that we are building a long-term sustainable business which will be around for many years to help and advise our clients.
What motivates you to do what you do?
I very much enjoy the relationships I have with my clients and because of the type of business we do I have the time to really understand what my clients need and to get into their tax and income positions. This suits my Chartered Accountant and Chartered Financial Planning background well.
However, I also have a real interest and motivation in helping build and develop a more sustainable economy from grassroots and really enjoy looking into and evaluating clean energy and environmental investment opportunities for clients.
The recent cluster of retail bonds from Good Energy (the Good Energy Bond), A Shade Greener Money (The Greener Bond) and CBD (the Energy Bond) provide the latest area to get my teeth into and try and make sense of to clients and get to the heart of the essential risks involved.
This is a big area where we can add value, rather than simply stating the now (in my opinion) meaningless risk warnings such as “your capital is at risk and you could lose all your money” which are written in various forms in every investment document you will ever read. Of course your capital is at risk, but how is this different from everything else?
What are the biggest challenges in building momentum for ethical finance?
What is ethical finance? Well, if we take it to be a very broad church which encourages positive social and environmental impact then in my opinion it is the culture of the investment industry which is its biggest obstacle. Cultural obstacles are the biggest challenge any organisation, or society faces in trying to change. What are we used to and what are we conditioned to accept and ignore?
In the UK, our culture is impacted in many different ways, from a government determined to have growth, growth and more growth (which is tricky given the world’s limited resources); from tax and finance regulation which conditions people to do what they did yesterday and from training and education which hasn’t permeated through society enough yet to infiltrate finance the way it should.
In many ways, it is generational change which will make the biggest difference as the 30 and 40-year-olds who have grown up to think of sustainability as an important part of the future become industry and financial leaders.
What trends or developments are you most excited about in sustainable and ethical investment?
I am most excited about the private equity offerings which are now available to finance real projects that you can touch and go and see.
The retail bonds I mentioned earlier are a part of this explosion in opportunity, but before these we had numerous enterprise investment schemes and venture capital trusts set up to finance renewable and energy efficient infrastructure.
We await the Financial Conduct Authority’s view which is due out now on crowdfunding which will either stifle, or encourage this trend of ordinary people wanting to be able to see and understand their investments much like they do when they buy their own house.
What one thing could change the future of finance?
Well we have had the financial crisis and other than governments deciding that they will print a lot of money, I am not sure it has revolutionised the financial system quite as much as we might think.
I like Clare Brook’s answer to this question in a previous interview, but I would say that if we could destroy the culture of following the herd then suddenly finance could make a huge difference to the world.
In my view the majority of investment managers do not really have to make any big decisions because they like everyone else are pseudo-tracking a ‘benchmark’, such as the FTSE 100. It is simply the culture of the finance markets. Equity indices are typically artificial constructs based simply on the size of the company as some measure of the desirability of everybody to invest in them. So they are to a large extent self-congratulatory and self-fulfilling.
So if I could change anything I would say let’s ban indices which are based on the market capitalisation (i.e. total value) of a stock.
Where do you want to take Holden & Partners next?
We have to build and grow the number of people interested in sustainability and wanting to find professionally qualified advisers with this extra expertise. Our challenge as a business is to develop the leads we receive to enable us to bring on staff to be advisers and thus create a sustainable business model which can go on for generations.
What can we, as individuals, do to make a difference?
I have said this before, but I feel that an investor, no matter their ethical persuasion, should look to try and invest 10% of their portfolio ‘sustainably’ because there are good financial reasons to do so.
If we all did this, what a difference we could make to the world and sustainable investment would be self-fulfilling. If National Ethical Investment Week could achieve this, we would see huge change for the better, get good financial returns and might properly address the climate change and environmental challenges we all face.
If you were prime minister for a day, what would be the first thing you’d do?
I think this question rather assumes that a prime minister can achieve something on his own! Well let’s assume we are in an autocratic system and my decision impacts globally.
I would outlaw indices based on market capitalisation to drive innovation and change through global investment markets. We would still see indices and tracker funds but not wedded to this idea that big is beautiful.
What’s the coolest project or product you’ve come across, and inspired you?
The world moves so fast and we forget how fast this change is. There are so many inspiring changes that are worth a mention and are inspirational to a generation of people – Google, Facebook, Twitter, LinkedIn are all game changing global innovations which have popped up in the last 15 years. Google only really started in 1998!
It is inspirational to think what started out with one or two people can literally change our culture and they can grow up to become some of the most successful companies in the world.
Can you recommend a life- or game-changing book for our readers?
The Grameen Bank by Muhammad Yunus. I was given this book many years ago by my aunt, well before he was given his Nobel peace prize. He developed the concept of microfinance from his university post in Bangladesh with his own money and he changed the culture of lending in the developing world. It is a great read, truly inspirational, tear-jerking and emotional and a book to keep us all very grounded.
Can you leave us with who’d be your ethical investment pioneer?
I am going to pick a grass roots person who no one will probably know, but who developed the practical concept of the ‘free residential solar panel’ in the UK and totally committed himself to it. He managed to persuade the banks, during the financial crisis, to lend him what amounts to now hundreds of millions so that today, he is still installing 200-300 solar panels a week through his company A Shade Greener Limited, despite the drastic cuts in the solar feed-in-tariff.
A Shade Greener has just launched the Greener Bond to raise finance for more of this type of installation.
It is entrepreneurs like Stewart Davies who change the world!
How Going Green Can Save A Company Money
What is going green?
Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.
The first step in going green
There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.
Making needed changes within the company
After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.
Reducing the common paper waste
Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.
Make money by spreading the word
Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.
5 Easy Things You Can Do to Make Your Home More Sustainable
Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.
1. Weather stripping
If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.
Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.
Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.
2. Programmable thermostats
Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.
Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!
3. Low-flow water hardware
With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.
Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.
Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.
4. Energy efficient light bulbs
An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.
New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.
5. Installing solar panels
Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.
Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.
From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!
These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.