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Sustainable Investment Bootcamp, Edinburgh – review

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Blue & Green Tomorrow hosted a Sustainable Investment Bootcamp for financial advisers on June 26 in Edinburgh.

Four leading funds presented and discussed a range of sustainable and responsible investment themes to a number of interested advisers, which was hosted by Standard Life in its central Edinburgh office.

The bootcamp was the third of six taking place around the UK in 2014, and it followed on from previous events in London, Leeds and Liverpool.

Opening the event, Blue & Green Tomorrow founder and publisher Simon Leadbetter spoke in great length about some of the environmental and social trends the world faces. He added how sustainable investment can rebalance and address people and planet and lead to sustainable wealth and prosperity for all.

Clare Brook, founding partner of the listed equities team at WHEB, was the first of the funds to speak. She delved into some of the failings of the fund management industry – its short-termism, its lack of transparency and its focus on benchmarks which are backward-looking and may miss the bigger picture.  She said how a sustainable investment strategy can add value to the investment process, by investing in solutions to major challenges facing the human race.  She emphasised that the team at WHEB sets great store by being long-term and transparent, in contrast to much of the mainstream fund management industry.

Neville White, head of socially responsible investing at Ecclesiastical Investment Management, was up second to speak. He gave a comprehensive overview of the firm’s important positive investment pillars, and explained how to apply positive criteria to an investment portfolio. The case study he used was whether it is ethical to invest in gold bullion. To answer this question, Ecclesiastical engaged with the World Gold Council which resulted in it being actively involved with the industry body in pioneering a new globally accredited standard for conflict-free gold.

Following on from this, Peter Michaelis, head of sustainable and responsible investment at Alliance Trust Investments, identified a variety of prominent sustainability challenges – including climate change and corruption. He said today’s dynamic and rapidly adapting society and economy favour those companies driving sustainability and will ultimately benefit them in the long-term.

The fourth and final fund to present was Quilter Cheviot’s Climate Assets fund. Investment director William Buckhurst detailed how the merging of large-scale drivers like climate change, population growth and resource scarcity will bring about investment opportunities in a new economy. In the new economy, investing in themes like energy efficiency can be very rewarding, he explained.

Finally, before the lunch break, there was a Q&A session with two specialist ethical financial advisers, Julian Parrott (Ethical Futures) and Scott Murray (Virtuo Wealth). The pair took questions from the floor on performance, engagement and some of the possible barriers that are hindering the ethical and sustainable investment sector’s growth.

After the break, advisers in the room were shown data from Blue & Green Tomorrow’s latest Voice of the Adviser survey. The report surveyed around 400 financial advisers about a range of issues, from their opinions on sustainable investment and the economy to the timely debate of Scottish independence.

The bootcamp was then split up into two workstream groups with two funds in each session. Delegates were invited to quiz the investment houses as well as share their own thoughts on sustainable, responsible and ethical investment.

Lesley Duncan, investment director at the bootcamp’s host Standard Life, wrapped up the day with a presentation highlighting recent trends in ethical investment and the power of the shareholder in improving corporate governance.

Later on this year during Sustainable September (September 16), we will be in London for the fourth sustainable investment bootcamp. For more details on attending one of the future events, see here.

Photo: Seth Kirby

Further reading:

Sustainable Investment Bootcamp, Liverpool – review

Sustainable Investment Bootcamp, Leeds – review

Sustainable Investment Bootcamp: a resounding success

Video: Sustainable Investment Bootcamp

Financial advisers sought for sustainable investment bootcamps

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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