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Ownership Day: parliamentary event outlines long-term benefits of active ownership



Investors, fund managers and parliamentarians gathered at the House of Commons yesterday to celebrate the UK’s first Ownership Day – an event to promote active ownership and stewardship in the investment community.

Co-ordinated by the UK Sustainable Investment and Finance Association (UKSIF), the inaugural gathering aimed to highlight the long-term benefits of adopting such strategies.

Figures from a YouGov survey released on the day showed how 47% of Britons with savings or investments managed by an intermediary wanted to see greater transparency when it came to shareholder voting. One in three (33%) also called for better guidance on how to access voting details, while 14% said they wanted their manager to provide up-to-date information on how votes are cast on their behalf.

Active ownership is ultimately about creating financial value, and delivering value for society through the company’s corporate activity”, said UKSIF chief executive Penny Shepherd, speaking at the event.

But also, looking through an investment lens, [it’s about] providing end investors and end savers with superior risk-adjusted returns over the long-term. So that’s what we’re trying to achieve.”

Also giving a short address was John Kay, the British economist who last year produced a report – at the request of the government – into equity markets and long-term decision-making.

The Kay review, as it’s known, criticises the financial services industry for its short-term outlook, and says that a lack of long-term sustainability was damaging to the economy.

With regards to ownership, the report suggested that the UK’s fund management industry had been at fault when trying to match long-term capital with long-term opportunities.

In his Ownership Day speech, Kay emphasised the importance of maintaining strong relationships between companies and investors, saying that these were crucial in bringing about prosperity for the business and thus, the returns necessary to enable investors to take long-term views.

He added, “The central purpose of companies is to produce goods and services that people want. That seems obvious, but we tend to forget that.

It’s not to create shareholder value; it’s not to make profits – these are a proper and necessary part of business activity – but in the end, the social, business and economic purpose is to produce goods and services that people want, and to do so in a manner that gives satisfying employment to the people who work for these organisations; in a manner that contributes to the communities in which they operate and in a manner that pays an appropriate share of tax.

What we’re trying to do through Ownership Day is to create an environment in which the link between the saver and the company facilitates the building of great companies to do all of these things.”

Lib Dem MP Martin Horwood, vice-chair of the all-party parliamentary group on responsible investment, had provided remarks at the beginning of the event, and at one point, labelled the fact that the parliamentary pension fund hadn’t yet signed the UK Stewardship Code as “pretty pathetic”.

UKSIF hopes Ownership Day will become an annual event, and given the encouraging support shown for this year’s inaugural gathering, there’s no reason why it can’t do just that.

It’s clear there is a genuine market demand for good, active ownership among shareholders. The next step – and what Ownership Day was created for – is to increase that demand further and highlight the long-term financial benefits of such strategies to both companies and investors.

Blue & Green Tomorrow is producing a Guide to Ownership – which includes insight from Penny Shepherd at UKSIF and James Gifford at the UN-backed Principles for Responsible Investment. The Guide will be published on Friday.

Further reading:

Ownership Day: half of investors want better voting transparency

Report says shareholders are ‘reluctant’ to speak out on executive pay

Use your power, vote with your feet and move your money

The principles of responsible investment – a short series. Principle two – active ownership


New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
Shutterstock Licensed Photo - By Eviart /

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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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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