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The church should look to sustainability instead of walking a Wonga tightrope



Seb Beloe of WHEB Asset Management argues that the Church of England should focus its energy on the growth markets of the future, over its current negative screening policy that allowed it to invest indirectly in payday lender Wonga.

It is not often that ethical investment features on the front page of the Financial Times, but the critical comments made by Justin Welby, the 106th archbishop of Canterbury, on the activities of the so-called payday lender Wonga, followed by the revelation that the Church of England itself has a small investment in the business, catapulted the practices of the ethical investment industry into the full glare of the media.

The Church of England has been here before

This isn’t the first time either that the Church of England has been criticised over the nature of the investments carried out by the Church Commissioners, which manages the Church’s investment portfolios.

Welby’s predecessor Rowan Williams was caught out after criticising hedge fund managers when it was revealed that the commissioners had a significant holding in Man Group. And perhaps most memorable of all was the comedian Mark Thomas’ lampooning of the church’s investments in engineering and arms manufacturer GEC in the late 1990s.

Negative screening of the type employed by the Church Commissioners is a difficult area that requires considerable skill and judgment. “Life is not perfectly good or perfectly bad”, Edward Mason the secretary to the Church of England Ethical Investment Advisory Group is reported to have said. “Everything is a mess.”

Implementing an ethical policy shouldn’t be a mess –there are plenty of high quality investment firms that do an excellent job in clearly articulating, communicating and applying strict ethical policies.

But where Mason is right is in highlighting the complexity that accompanies deep analysis of ethical investment.

Do you avoid companies that have any contracts with the military if you are uncomfortable with weapons manufacturing? Does this extend to service providers responsible for cleaning military bases? Should hotels that provide pay-per-view pornography be blacklisted – or for that matter data centres and mobile telephone companies that provide the networks through which pornography is transmitted?

And this isn’t a static agenda either; tax avoidance wasn’t a high profile issue 18 months ago. It certainly is now. Is screening out companies with 25% of revenues coming from payday lending the appropriate threshold? Or should it be 3%? Deciding where to draw the line certainly is ‘a mess’ and for a high profile organisation like the Church of England one that is fraught with risk.

Negative screening can inject conflict into the heart of the investment process

The root of the problem with negative screening is that it imposes what is perceived to be a constraint on the ability of investment managers to do their job effectively. It is not entirely clear whether this is actually the case, and there is a huge amount of conflicting research on this point.

Nonetheless, because negative screens are often perceived this way, investment managers are often keen to ensure any screens that are applied are not so strict as to overly obstruct their activity. As a consequence, where this is the approach, conflict inevitably lies at the heart of the investment process.

Positive sustainability investing offers a better approach

An alternative way of addressing the church’s concerns is to focus instead on industries whose purpose is inherently positive. As one commentator quoted by the BBC put it, “What we do with our money is […] part of how we follow Jesus’ example of siding with the poor and actually put our money into things like renewable energy, social housing, things that, in itself, will help society.”

By focusing on ‘good’ industries involved in environmental remediation, clean energy, air and water, education and healthcare you avoid the worst pitfalls associated with the ‘sin’ industries that so often trip up the ethical investor. There are still questions as to the standards of how these businesses operate and delicate judgements as to what industries should be considered ‘positive’, but this approach eliminates the inherent conflict between negative screens and investment.

As the church knows only too well, many social and environmental problems are getting worse and the world needs more solutions. Companies supplying these solutions as a whole are growing faster than the broader market.

Surely, instead of wobbling along an ethical screening tightrope based on what proportion of revenues from pornography, weapons or usurious lending is considered acceptable, the church and other ethical investors should be focusing their energies on the growth markets of the future and investing in companies that are doing well by actively doing good.

Seb Beloe is a partner and head of sustainability research at WHEB Asset Management. This article originally appeared on WHEB’s blog.

Further reading:

Wonga (5,853% APR), Wongate, Wronga or just plain wrong

For a church, fiduciary responsibility should not trump social responsibility

Is a little sin tolerable? Ethical investment and searching for the good

Wonga, the archbishop and the Ethical Investment Advisory Group: interview

Archbishop ‘embarrassed’ at Church of England investment in Wonga backer

Articles, features and comment from WHEB Group, an independent investment management firm specialising in opportunities created by the global transition to more sustainable, resource efficient economies. Posts are either original or previously featured on WHEB’s blog or in its magazine, WHEB Quarterly.


How Going Green Can Save A Company Money



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




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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