A record 1.85m people are saving and investing £3.6bn in businesses creating positive social and environmental impact, according to the Ethex annual report of the positive investment market.
A record 1.85 million people across the UK are saving and investing £3.6 billion to create positive social and environmental impact, according to Ethex’s annual survey of the market, launched today to coincide with Good Money Week, 18th–24th October 2015.
Positive savings and investments – in credit unions, ethical banks, community shares and businesses with a strong social or environmental mission – grew 11% in the last year, more than four times faster than the 2.4% average growth of UK household savings and investments over the last five years, finds the “Positive Investing Report 2015” by Ethex, the not-for-profit platform for positive investments and savings.
Community share offers make up the most active section of the market. Over the last year 75 new offers raised £36 million bringing the total invested to £157 million, a growth of 29%.
Community-owned renewables projects remain highly popular, with 48 community share offers raising £26 million in the last year. Four offers raised £3.9 million to bring football clubs into community ownership, including two in League Two, Portsmouth and Wycombe Wanders, and five similar offers have launched since July. Three offers raised £2.4 million to bring broadband to rural areas and for the Phone Co-Op.
Bath is the most active hotspot for community investing, up from third place last year, raising £5.3 million in six offers. Bath and West Community Energy helped raise over £4.5 million for three solar power projects and its spin-off, Mongoose Energy, is now advising community energy groups nationally. Bath City Supporters Society launched a campaign to buy the football club, Save Open Spaces Frome raised finance to save local fields from development and a campaign was launched to save Farmborough village store for the community.
Lancaster and the Lake District comes second, raising £5.1 million in four offers. The High Winds Community Energy offer raised £3.75 million to finance the repowering of five wind turbines near Ulverston, the UK’s second largest community share offer. Broadband for the Rural North (B4RN) raised £1 million to bring one of the world’s fastest broadband connections to upland villages.
Oxfordshire is third, raising £3.9 million in four offers, including Abingdon Hydro’s micro-hydro scheme on the Thames, Low Carbon Hub projects installing solar panels on schools and businesses across the county, and the Phone Co-op, based in Chipping Norton, which provides ethical phone and broadband nationally.
Bristol, South Devon and Hereford and Ludlow complete the six hotspots, which accounted for nearly 60% of all money raised by community share offers over the year. The South West was by far the most active region, raising £13 million in 23 offers. The North West raised £6.5 million from 12 offers and the South East raised £5.3 million from 12 offers.
Positive Investing Market Growing Strongly
Increasing numbers of people want to invest their money where it will do good and 2.9% of the UK’s population are now actively involved in positive investing and saving:
– Nearly 1.6 million people have £2.3 billion saved in credit unions;
– Nearly 60,000 people have £980 million saved in ethical banks and building societies;
– Nearly 200,000 people have made direct investments worth £330 million in community shares, charity bonds, and bonds and shares in businesses with a strong social or environmental mission, providing the capital they need to grow.
A recent survey by Barclays Bank found that while only 9% of investors had made impact investments, 56% were interested in doing so.
Values-driven investors are turning away from the growth of green and ethical funds, which have been a mainstay of ethical investment since the 1980s, but which rely mainly on screening out “sin stocks” such as companies engaged in the arms trade or tobacco sales. The sector has fallen from a high in 2009 when it made up 2% of the UK funds market to just 1.5% in 2014.
The boom in direct investments has been driven by the rise of internet-based crowd-funding platforms, making it easy for people to invest in line with their principles, coupled with a growing choice of positive investments. Money invested via Ethex alone has tripled from £6 million to £18.1 million over the past year.
Jamie Hartzell, Founder of Ethex and author of the report, said: “Public demand for investments that make money and do good is so great that the market is on course to grow to £11 billion by 2020, involving nearly four million people.”
“Positive investment delivers strong social and environmental benefits to society at little or no cost to the taxpayer. To unlock this potential it is essential that we continue to improve the choice and quality of positive savings and investment products and make people aware of these opportunities. We’d also like to see the Government do much more to encourage this market.”
The report highlights key opportunities to grow the market:
Positive bank accounts. Some 96% of the UK population have a bank account and 1 million switch each year, so positive bank accounts have huge potential to attract ethical savers. Triodos, the ethical bank, intends to offer positive current accounts in 2016, filling a gap that emerged after the Co-operative Bank ran into difficulties.
Positive pensions. In France, since 2001, employers and pension providers have had to offer employees the option of investing their pensions in the Solidarity Investment Fund, which channels 10% of its assets into social investment. The fund now stands at 4.6 billion euros with a million investors. A similar requirement could channel hundreds of millions of pounds to positive investment in the UK.
Positive investments listed on the London Stock Exchange. Genuinely positive funds listed on the exchange are beginning to emerge, such as Impax Environmental Markets, the WHEB Sustainability Fund and the Threadneedle Social Bond Fund, which make investments that deliver social and environmental benefits and report on their impact. Positive investments listed on the exchange can reach the mass market, making it far easier to invest in them directly and indirectly through funds.
The report warns that cuts to subsidies for renewable energy will have a “dramatic impact” on the community energy sector, the fastest growing area of direct positive investment over the past three years. The Financial Conduct Authority is also proposing to limit the scope of community share offers by limiting the financial returns they can offer, forcing these businesses to become less commercial.
It also reveals that the introduction of Social Investment Tax Relief has had a limited impact, proving more difficult for most businesses to use than the similar Enterprise Investment Scheme. Since its launch in April 2014 it has raised only £890,000 in five offers.
“The Ethex Positive Investing Report 2015” and the map of hotspots are available 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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