Blue & Green Tomorrow hosted a Sustainable Investment Bootcamp for financial advisers on April 24 in Leeds.
The event was tailored for those who have an interest in sustainable investment, but do not feel they have sufficient insight to advise clients on the subject. Four leading funds presented on some of the key themes that sustainable investors are thinking about – to a packed room of advisers at Devonshire Hall.
Blue & Green Tomorrow founder and publisher Simon Leadbetter kicked off the event by talking about some of the social and environmental trends we face. He made the point that the future could be really grim – with overconsumption, biodiversity loss, water and resource scarcity, ocean acidification, pollution and climate change just some of the threats – but added that investors were seeking to tackle such issues by investing in real solutions.
Delegates were then shown a TED talk by sustainable investment expert Chris McKnett, in which he makes a compelling case for investment that considers non-financial factors as well as financial ones. He concludes in the talk, “By investing sustainably we’re doing two things. We’re creating insurance, reducing the risk to our planet and to our economy, and at the same time, in the short-term, we’re not sacrificing performance.”
Clare Brook, founding partner of the listed equities team at WHEB, was the first of four speakers. Brook spoke about her career in sustainable investment – which spans almost 25 years – and WHEB’s award-winning Sustainability fund. She explained how the fund looks to invest in solutions to sustainability challenges, adding that most mainstream analysts will generally only focus narrowly on a company’s financial metrics – rather than gain wider insights by thinking about social or environmental factors.
She was followed by Peter Michaelis, head of sustainable and responsible investment at Alliance Trust Investments whose talk was entitled “Obvious with hindsight: investment challenges for the next decade”. He said companies that support society are more likely to be supported by society – whereas companies that don’t are less likely to be supported. It is for this reason that Alliance Trust invests purely in what it considers to be sustainable companies.
The first speaker after the lunch break was Claudia Quiroz from Quilter Cheviot, who explained how to turn some of the environmental trends – climate change, resource scarcity and so on – into investment themes. She told delegates about the Quilter Cheviot Climate Assets fund that she runs and urged them to acknowledge that sustainable, responsible and ethical investment meant different things to different investors, but from an investment viewpoint means investing in markets that make high economic sense, like energy efficiency.
Neville White from Ecclesiastical Investment Management was the fourth and final presenter. His talk, called “Accentuate the positive(s)”, took the audience through Ecclesiastical’s process of investing in a company. He used the example of a gold bullion exchange-traded fund (ETF), and explained how the firm undertook extensive research, including taking a lead role engaging with the World Gold Council, before deciding whether it was ethical to invest in it.
The advisers in the room were then shown data from Blue & Green Tomorrow’s Voice of the Adviser survey. Published in January, the report surveyed around 400 financial advisers about a range of issues – ranging from their opinions on sustainable investment and the economy to Scottish independence and whether the UK should remain in the EU.
Following this, the session was split up into two workstreams, 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.
The Leeds event – the first of six bootcamps taking place around the country in 2014 – followed on from the September 2013 conference in London in being a resounding success.
On May 22, we will be in Liverpool for the second bootcamp. For more details on attending one of the five future events, see here.
Will Self-Driving Cars Be Better for the Environment?
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.
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 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.
New Zealand to Switch to Fully Renewable Energy by 2035
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.
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