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Leading International Asset Owners Launch Climate Change Investment Initiative

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System Change Not Climate Change by Eoghan Olionnain via flickr

Thirteen of the leading international asset owners have announced a major initiative to ensure that investment decisions are impacted by climate concerns.

The leading international asset owners and five asset managers with over £2 trillion under management launched the Transition Pathway Initiative (TPI) today to better understand how the transition to a low-carbon economy affects their investments. The TPI will assess how individual companies are positioning themselves for the transition to a low-carbon economy through a public, transparent online tool. The heads of funds involved launched the Initiative this morning at the opening of the stock market at the London Stock Exchange.

The Initiative has been led by the Church of England’s National Investing Bodies and the Environment Agency Pension Fund in partnership with the Grantham Research Institute at the London School of Economics. Data has been provided by FTSE Russell.

Preliminary assessments released today include the oil and gas and electricity utilities sectors. As part of a phased rollout, management quality and carbon performance assessments of additional sectors and individual companies will follow in the coming months. The tool has been designed to support the requirements of the Task Force on Climate-Related Financial Disclosures (TCFD), individually profiling future projected emissions against the two-degree target and current public policy commitments.

Preliminary assessments have already highlighted key findings, including:

• Almost all companies assessed are at least acknowledging climate change as a business issue (39 out of 40). However, few companies are at the level of strategic assessment (level 4), meaning most can improve.
• Electricity utilities are marginally more advanced than oil and gas producers.
• The typical company is building capacity (15 out of 40 are at level 2), meaning it explicitly recognises climate change as a significant issue for the business, has a policy commitment to action, has set some form of energy or greenhouse gas emissions target, and discloses its operational greenhouse gas emissions
• The majority of companies also have board oversight of the climate change policy (on level 3; 28/40), and incorporate ESG issues into executive remuneration (on level 4; 34/40).
• The most common factors hindering progress are not having set quantitative targets for reducing operational greenhouse gas emissions (26/40 have not), and not having had operational emissions data verified (22/40 have not).

Adam Matthews, Co-Chair of the Initiative and Head of Engagement for the Church Commissioners and Church of England Pensions Board, said “The Transition Pathway Initiative is a tipping point for the market.

“ The Initiative will identify companies that are aligned with the transition to the low-carbon economy and those most exposed to climate transition risk.

“There can be no doubt about the seriousness with which asset owners are taking account of this risks and it will be a key feature in the discussions we will be having with companies over the coming years.”

Emma Howard Boyd, Chair of the Environment Agency said “Businesses should be able explain to investors how they plan to manage climate change risks, invest and innovate on the way to the zero-carbon economy of the future. With the launch of the Transition Pathway Initiative, asset owners from around the world are sending a strong signal that portfolios will align in the future with companies that are taking the transition to a low carbon economy seriously.”

Professor Simon Dietz, Co-Director of the Grantham Research Institute at the London School of Economics, said “The TPI brings transition risk to life for asset owners and asset managers. As well as allowing investors to objectively compare the progress of companies towards a low-carbon economy, the tool highlights the work governments still need to do to align public policy to the two-degree target agreed in Paris.”

Mark Makepeace, CEO of FTSE Russell, said “The launch of the TPI highlights the growing momentum among asset owners to consider the economic implications of the transition towards a low-carbon economy into their stewardship and investment processes. FTSE Russell has long been a pioneer in ESG and sustainable investing and we are delighted to have been chosen by the TPI as the data and analytics partner for this exciting initiative.”

Frédéric Janbon, CEO of BNP Paribas Investment Partners, said “BNP Paribas Investment Partners is very pleased to be among the asset managers that actively support the Transition Pathway Initiative. It is important for asset managers to partner with asset owners, as by doing so we are able to send a unified message to companies regarding our expectations of them as they position themselves for the transition to a low-carbon economy. It also sends a clear signal to the wider world that we are actively engaging with companies to help them to work towards greater action, as well as disclosure of transition risks, in order that their shareholders can make fully informed investment decisions.”

The online tool developed by the TPI – available at transitionpathwayinitiative.org – tracks a company’s management quality and carbon performance. Management quality assessments will use data from FTSE Russell to assign companies to one of five levels, ranging from level 0 (no recognition of climate change as a significant issue) to level 4 (climate change deeply integrated into a company’s business practices). Performance assessments will compare individual companies with internationally agreed benchmarks made as part of the Paris Agreement. These benchmark emissions pathways will be sector-specific.

Energy

7 Benefits You Should Consider Giving Your Energy Employees

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As an energy startup, you’re always looking to offer the most competitive packages to entice top-tier talent. This can be tough, especially when trying to put something together that’s both affordable but also has perks that employees are after.

After all, this is an incredibly competitive field and one that’s constantly doing what it can to stay ahead. However, that’s why I’m bringing you a few helpful benefits that could be what bolsters you ahead of your competition. Check them out below:

Financial Advising

One benefit commonly overlooked by companies is offering your employees financial advising services, which could help them tremendously in planning for their long-term goals with your firm. This includes anything from budgeting and savings plans to recommendations for credit repair services and investments. Try to take a look at if your energy company could bring on an extra person or two specifically for this role, as it will pay off tremendously regarding retention and employee happiness.

Life Insurance

While often included in a lot of health benefits packages, offering your employees life insurance could be an excellent addition to your current perks. Although seldom used, life insurance is a small sign that shows you care about the life of their family beyond just office hours. Additionally, at such a low cost, this is a pretty simple aspect to add to your packages. Try contacting some brokers or insurance agents to see if you can find a policy that’s right for your firm.

Dedicated Time To Enjoy Their Hobbies

Although something seen more often in startups in Silicon Valley, having dedicated office time for employees to enjoy their passions is something that has shown great results. Whether it be learning the piano or taking on building a video game, having your team spend some time on the things they truly enjoy can translate to increased productivity. Why? Because giving them the ability to better themselves, they’ll in turn bring that to their work as well.

The Ability To Work Remotely

It’s no secret that a lot of employers despise the idea of letting their employees work remotely. However, it’s actually proven to hold some amazing benefits. According to Global Workplace Analytics, 95% of employers that allow their employees to telework reported an increased rate of retention, saving on both turnover and sick days. Depending on the needs of each individual role, this can be a strategy to implement either whenever your team wants or on assigned days. Either way, this is one perk almost everyone will love.

Health Insurance

Even though it’s mandated for companies with over 50 employees, offering health insurance regardless is arguably a benefit well received across the board. In fact, as noted in research compiled by KFF, 28.6% of employers with less than 50 people still offered health care. Why is that the case? Because it shows you care about their well-being, and know that a healthy employee is one that doesn’t have to worry about astronomical medical bills.

Unlimited Time Off

This is a perk that almost no employer offers but should be regarded as something to consider. According to The Washington Post, only 1-2% of companies offer unlimited vacation, which it’s easy to see why. A true “unlimited vacation” program could be a firm’s worse nightmare, with employees skipping out every other week to enjoy themselves. However, with the right model in place that rewards hard work with days off, your employees will absolutely adore this policy.

A Full Pantry

Finally, having a pantry full of food can be one perk that’s not only relatively inexpensive but also adds to the value of the workplace. As noted by USA Today, when surveying employees who had snacks versus those who didn’t, 67% of those who did reported they were “very happy” with their work life. You’d be surprised at how much of a difference this could make, especially when considering the price point. Consider adding a kitchen to your office if you haven’t already, and always keep the snacks and drinks everyone wants fully stocked. Doing so will increase morale tremendously.

Final Thoughts

Compiling a great package for your energy company is going to take some time in looking at what you can afford versus what’s the most you can offer. While it might mean cutting back in other areas, having a workforce that feels like you genuinely want to take care of them can take you far. And with so many different benefits to include in your energy company’s package, which one is your favorite? Comment with your answers below!

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Top 5 Renewable Energy Stocks to Watch

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Do you feel morally obligated to put your money where your mouth is? I totally get it. We all want to make the world a better place, and I want to help you put your investments to work for you and the planet we call home – we only get one.

Questor Technology – CVE:QST

Questor Technology is one of the most promising penny stocks to follow under $5. It turns out that investing in renewable energy stocks doesn’t have to be expensive. In fact, you can get in on the ground floor by investing in penny stocks. These are companies that are just starting to make an impact. If they are successful in the long-run, you win BIG. If they fail, you’re only out a couple pennies. Small risk and big potential reward.

Questor Technology is exciting because they are solving one of the biggest barriers to a greener planet – huge waste and pollution from the oil and gas industry. When they first launched they enjoyed a couple of record years. But as the economy took a hit, so did the oil and gas sector.

I love these guys because they didn’t call it quits. Instead of hanging up the towel, they retooled and relaunched. Now, instead of selling clean energy tech to large oil and gas firms, they rent the tech out. This provides a stable, ongoing revenue. And, if the economy takes another dip, they can quickly scale operations back.

I’m expecting a major upswing. If you have a couple of extra pennies in your portfolio, chuck ‘em at these guys.

NRG Yield – NYSE:NYLD

If you’re willing to dance with the devil, NRG Yield is an exciting company to watch. They invest and offer all forms of energy – from renewable to traditional. I’m really encouraged by their massive investment in renewable energy.

In recent years, making energy more environmentally sustainable has become a focus for a company that used to be one of the bad guys. I think we should encourage companies to stop killing our planet. These guys are on a warpath on behalf of green energy – and so what if they showed up a little late to the party. Don’t we want to reward reform?

Oh, and speaking of green, they’ve had a phenomenal year for investors. I definitely recommend adding them to your portfolio.

Brookfield Asset Management – NYSE:BAM

This is an asset management firm that has gone big on renewable energy. Part of their genius is that they stayed on the sidelines while renewable firms launched and fought over access to technology and resources. While they watched the good guys duke it out, they swooped in and picked up green energy firms that stumbled.

This means that their investors are able to invest in green energy at a HUGE discount. Brookfield Asset Management has more than 100 years of experience making strong investment plays. I love that they allow investors to access green technology without paying the hype premium.

Pattern Energy Group – NASDAQ:PEGI

Based in San Francisco, Pattern Energy Group is a pure green energy play. They’ve spent that past few decades building, expanding and innovating with more than 20 renewable energy facilities. If you’re a bleeding heart with a passion for green energy, this is as good as it gets!

You can purchase stock in their company on two different exchanges – the NASDAQ and Toronto Stock Exchange. This allows investors both north and south of the border to avoid international transaction fees. Savvy investors can compare both markets to find the best bang for the green dollar.

Carnegie Clean Energy – ASX:CCE

I saved the best for last with this stock. Carnegie Clean Energy harnesses the kinetic motion of ocean waves to generate energy. Their tech has been proven by the Australian defense sector – helping to power a naval base at Garden Island.

They also have dipped into other forms of renewable energy, so they have a bright future in a variety of markets. I wouldn’t be surprised to see a buyout shortly based on the proprietary, proven technology that this firm owns the rights to.

In conclusion, it is totally possible to be green-conscious while making some green for your investment portfolio. Some companies are more committed than others, but I’m not afraid of rewarding traditional energy companies if they’re making a solid effort to diversify and make the world a greener place.

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