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Invest sustainably now, and sector growth will ensure big rewards

Claudia Quiroz, manager of the Cheviot Climate Assets Fund, explained to Alex Blackburne how investing sustainably can help to tackle global challenges.

Reducing carbon emissions, improving the food supply and demand imbalance and reducing water shortages: these are arguably the three biggest challenges that the world is currently facing.

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Claudia Quiroz, manager of the Cheviot Climate Assets Fund, explained to Alex Blackburne how investing sustainably can help to tackle global challenges.

Reducing carbon emissions, improving the food supply and demand imbalance and reducing water shortages: these are arguably the three biggest challenges that the world is currently facing.

It’s easy to become overawed and feel slightly helpless.

But there is at least one way that you can make a huge difference, and that lies in investments.

Ensuring your money is tied up ethically, sustainably and responsibly will go a long way to alleviate the increasing effects of climate change, and the subsequent challenges it brings.

We believe the macro drivers behind climate change investing are very powerful”, states Claudia Quiroz, manager of the Cheviot Climate Assets Fund.

The world’s population is growing faster than ever before, with the majority of the growth coming from the developing world, with the associated increase of their standard of living.

To meet growing demand, we need more food, resources, water, and energy and this increase in the use of resources presents global challenges.

Investors should aim to invest in companies that provide the products and technologies to overcome these global challenges”.

‘Investing in a company’ might sound like an unwanted hardship. But in reality, it’s simple. The Cheviot Climate Assets Fund is just one of a number of sustainability funds available in the UK, each with different aims, but all with sustainable undertones.

Its make-up is multi-asset, meaning instead of investing solely in stocks and shares like equity funds do, its revenue comes from a range of sources – fixed interest investments, commodities and other alternative investments such as private equity funds.

Most of the fund offerings within the sustainability or environmental space are mainly equity only strategies”, explains Quiroz.

These kinds of funds do very well during an upturn but shockingly badly in a downturn.

As such, many investors associate environmental or sustainability markets with high volatility and poor returns.

That is why we at Cheviot developed a multi-asset fund to reduce volatility and smooth the return over the economic cycle”.

Launched in March 2010, the fund focuses on three so-called ‘mega-drivers’: climate change, population growth and resource scarcity. And under that, there are five themes: energy, food, health, resources and water.

Quiroz gives an example of the challenges the Earth faces, and explains how the Climate Assets Fund has been set up to try and alleviate the problem.

Today in the developed world we consume around 150 litres of water per person per annum, compares with just 30 litres in the developing world”, she says.

As the developing world population grows and as their living standards increase, global water consumption is expected to grow by a factor of around five by 2050.

This poses a significant challenge given that our existing supplies of fresh water are threatened by rising sea levels and changing rainfall distribution, both of which are the results of climate change.

As such, the fund invests in companies providing solutions to the water scarcity problem, such as those involved in water supply and distribution, water analysis, monitoring and purification, water metering and efficient methods for crop irrigation”.

One of the fund’s largest positions is with American Waters Works, the “largest and most diversified water utility company in North America, providing drinking water to 15 million people in 32 states in the US and Ontario in Canada”, according to Quiroz.

The fund is also exposed to energy efficiency technologies; for example, BorgWarner, a leading global supplier of highly engineered systems and components for automotive power train applications, whose technology increases fuel economy or reduce emissions.

Meanwhile, Dr Reddy’s Laboratories, an Indian pharmaceutical company involved in manufacturing cheaper alternatives to branded products, called “Generics”.

Generics offer access to safe and affordable medicines particularly for HIV/AIDS and other life threatening diseases”, says Quiroz.

Reddy’s markets its products around the world with leading positions in emerging markets.

This company is set to benefit by population growth, wealth effects and an efficient use of healthcare budgets”.

Choosing to back companies such as this trio encourages further development and innovation within the field. Indeed, the fund’s performance has proven that the sustainable investment sector is continually expanding, despite the harsh economic climate.

Since launch to the end of last year, the fund has returned 5.97% compared the FTSE World Index’s 3.86%.

When compared to its peer group of similar funds it has performed in the top quarter over one month, six months, nine months and a year.

Growth is the key reason for general investor interest in the sustainability and environmental themes”, says Quiroz.

Most end-markets in the sustainability space are expected to grow annually at double-digit rates over the next three to five years compared to low single digit in most developed economies.

Energy efficiency is the fastest and cheapest way to achieve energy consumption reductions and contribute to a low carbon economy”.

The Cheviot Climate Assets Fund is proof that sustainable investing is brimming with prosperity – something that is only expected to rise in the future as the world moves towards a necessarily sustainable society.

With more and more businesses including sustainability into their agenda, and an increasing amount of innovation in the sector, it’s inevitable that people who invest in this way now will see huge rewards in the future.

Not just financial rewards, but environmental ones, too. The planet will be content, all thanks to you.

For more information about the Cheviot Climate Assets Fund, click here.

Alternatively, if you’d like to find out more about investing sustainably, fill in our online form or ask your own financial adviser.

Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

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

paper waste

Shutterstock Licensed Photo – By Yury Zap

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.

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Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

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sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

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

Shutterstock Licensed Photo – By Olivier Le Moal

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.

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