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Sustainable Investment Bootcamp: a resounding success

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Sustainability thought leader Will Day told a fascinating – and revealing – anecdote during his keynote speech at Blue & Green Tomorrow’s Sustainable Investment Bootcamp last week that really epitomised why we decided to host the event.

Day is sustainability adviser to PricewaterhouseCoopers and chairman of the non-profit Water and Sanitation for the Urban Poor (WSUP). The WWF, the ICAEW, British Land, the Sustainable Development Commission, BBC Children in Need, the United Nations Development Programme, Oxfam, Save the Children and CARE International UK are just a few of the charities, NGOs and organisations to also appear on a CV that would make most people’s pale in comparison.

Click here to read The Guide to Sustainable Investment 2013

He recalled how he had enquired about sustainable investment (or ethical investment as he said it was primarily known back then) during a meeting with a former financial adviser. He wanted his money to do social or environmental good, as well as generate financial returns.

The adviser, Day said, actively tried to put him off from investing his money in such places.

Speaking to a room of financial advisers in the Old Hall at Lincoln’s Inn in London, Day may have had a few of them having uneasy recollections of their own. After all, the event was designed for advisers who were interested in learning more about sustainable investment but perhaps currently felt they lacked sufficient knowledge to give advice on it. It’s likely that many of those sat in the audience had had similar experiences from the other side of the desk.

What’s most interesting about Day’s anecdote is that Blue & Green Tomorrow’s founder Simon Leadbetter had exactly the same experience with no fewer than three advisers. Telling each that he had considerable (and vast) inheritance to invest, all three determinedly tried to detract him from the sustainable option.

But if these two men – who work at the heart of sustainability and therefore know why sustainable, responsible and ethical investment is crucial – are being discouraged from investing in this way by finance professionals, what about the investors who perhaps don’t have their understanding?

These two completely independent stories exemplify why Blue & Green Tomorrow’s Sustainable Investment Bootcamp was needed. Because it’s not a requirement to do so, too few financial advisers offer clients the sustainable, responsible or ethical option.

This is despite many of them getting requests for such investment strategies from clients (74% of advisers in a Blue & Green Tomorrow survey said their clients had at some point asked about ethical investment).

Click here to read The Guide to Ethical Financial Advice 2013

The bootcamp on Thursday, which included contributions from some of the leading fund managers and financial advisers in the sustainable investment space, looked to join the dots between the clear demand and the lack of supply.

The performance of sustainable investment was a subject touched upon several times. Recent research by Moneyfacts.co.uk said how ethical and sustainable investment funds had generally performed better financially than their mainstream counterparts in the last 12 months, but critics responded by saying, “Not over the long-term.”

A number of speakers at the bootcamp – particularly the fund managers who had seen positive results first-hand – eloquently argued that by definition, sustainable investments are long-term investments. In addition, this is a relatively new industry, so many funds aren’t blessed with decade-long track records anyway.

Both the panel discussions between the fund managers – chaired by freelance and FT journalist Mike Scott – and the advisers – chaired by sustainable investment thought leader Raj Thamotheram – provided valuable insight into the inner workings of sustainable finance professionals.

The feedback we’ve received so far has been almost entirely positive, with one financial adviser who attended the event saying he was “a bit ashamed” that he hadn’t given sustainable investment the time of day before.

As Simon Leadbetter said in his opening speech, sustainable investment is investment for 21st century investors. But those investors need 21st century advisers to help deal with and benefit from the many environmental and social challenges the world faces today.

Our Sustainable Investment Bootcamp is one part of a much bigger and urgently needed process to encourage a new wave of 21st century finance professionals to step up to the mark.

The first wave of post-event survey results (with responses from 40% of those who attended) shows that two-fifths of the advisers who attended are seeing growth in demand for sustainable and responsible investment (SRI). None are seeing less. Meanwhile, all of them said they would be advising their clients on SRI in the future, and nine out of 10 said they saw no greater risk in SRI. All those who have responded to the survey so far see growth in the sector generally.

Further reading:

Financial returns from ethical investment funds ‘better than mainstream’ in last 12 months

10 signs that sustainable investment is going mainstream

Ethical investment: better a diamond with a flaw, than a pebble without

There is such a thing as an unethical investment

The Guide to Sustainable Investment 2013

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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