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Will Oulton plans top slot for First State responsible investment



First State’s Will Oulton speaks to Alex Blackburne about stewardship, engagement and being in the sustainable investment community’s favourite band.

Will Oulton doesn’t like to talk about responsible investment, which for a man who is global head of responsible investment at First State Investments is perhaps a bit unusual. When he says this, he is – of course – referring to the term and not the approach. He prefers “sensible investment”. Why? Because that’s essentially in his view what it is.

Oulton joined First State in 2012 with a brief from chief executive officer, Mark Lazberger to build on the firm’s existing responsible investment strategy with the aim of becoming a global leader in the field. First State was already leading the way in Australia (where it is known as Colonial First State Global Asset Management), but this wasn’t being reflected in other regions. For First State, responsible investment – or ‘sensible investment’ to embrace Oulton’s phrase – stands on three pillars. The first is quality – and the absolute belief that unless it integrates environmental, social and governance (ESG) factors, the quality of its investment process is suboptimal.

The second part is about stewardship and remembering that the £105.5 billion managed by the global firm belongs to clients – and not First State. In 2013, the firm unveiled a set of global stewardship principles that Oulton says reinforce the fact that its clients’ interests come first.  This is a subject that Lazberger, First State’s CEO, is particularly keen to entrench deeply within the business.

The third pillar that underpins First State’s responsible investment credentials relates to the culture of the organisation. Oulton describes this as “the most interesting, the most difficult and the most critical” aspect of all. First and foremost, it’s about attracting talent whose investment philosophies are aligned with First State’s and are driven to be good stewards of people’s assets and have a long-term investment horizon.

For Oulton, these three commitments made his decision to join the First State – in 2012 – an easy one. At the time, he was managing the responsible investment team at financial services firm Mercer, where he had worked for two years.

Will Oulton, First State

Prior to that, he was influential in getting FTSE4Good – the socially responsible offshoot of the FTSE 100 index – off the ground. The fledgling index had been met with criticism from some companies who were excluded from the initial launch. This included Tesco, whose chairman at the time – Oulton recalls – “was rather disappointed” at a full-page advertisement from a competitor in the Financial Times that stated it was the only major UK retailer to be included in the new FTSE4Good ethical index.

What [excluded companies] didn’t understand is that there was a process of selection and criteria, and essentially the problem was disclosure with many of them”, Oulton says from First State’s office on Cannon Street, London

They really didn’t say much about what they were doing, so disclosure was poor and that was the main source of information. We went back to them [the excluded companies] and said if they improved their disclosure, the chances were they would be included in the next review. And that’s what happened.”

His time working on FTSE4Good was his first foray into the world of responsible investment. He quickly became more and more interested in the subject, and began to recognise the value environmental, social and corporate governance considerations can add to the investment process. The transition also represented a return for Oulton to his zoology past – a subject he had studied and enjoyed at university.

I’ve always wanted to work with animals and I’ve maintained that throughout my career”, he jokes.

“It felt like I was coming back a little bit to understand how environmental issues could interact with companies, and what that means in terms of the investment value. It felt quite natural.”

Away from his life at First State, though, Oulton is perhaps best known as the guitarist in the post-punk/new wave covers band 51st State. You’d be forgiven in thinking this was the asset manager’s house band, but the naming similarities – he assures me – are completely coincidental (the name is from Heartland, the 1986 single by the band The The, which contains the line, “This is the 51st state – of the USA”).

They do covers of bands like The Smiths, The Cure, Echo & The Bunnymen, The Clash and The Sex Pistols, and Oulton uses it as an opportunity to unwind (though he quips that the band is his “mid-life crisis in all its glory”).

I can’t think about the next supply chain risk that we might be faced within a portfolio when I’m trying to work out whether I need to play a G or a C minor chord. You just can’t do the two”, he says.

It’s just a really great way to mentally relax, and also have something that keeps your brain firing away. It’s hard and takes a lot of work. I’ve got a huge amount out of it, as have the other guys.”

There must be a space for a sustainable investment-themed band, I say to him, writing catchy songs about ESG and the carbon bubble. “I like to say we’re the sustainable investment community’s favourite band – though clearly hardly anyone knows about us”, he replies.

As we look out of the First State meeting room window at the towering buildings that make up the City of London, Oulton reflects on how his mainstream peers approach responsible investment. The risk is that this is seen simply as a box-ticking exercise, he argues; a means of competing with those genuinely taking it seriously.

He calls this “cosmetic responsible investment”, adding, “That’s not integrated, into-the-business-philosophy responsible investment, with deep understanding about how ESG factors can affect the value of a business. It’s taken spectacular blow-ups over the last decade and beyond to just remind people that that’s the case. Back to sensible investment; if you don’t look at these things, then you’re going to miss something. I think there’s still that issue.”

He adds that his job as First State’s global head of responsible investment – or “conductor of the orchestra” as he describes it – is only going to become more important. But what would it take for the box-tickers to truly take responsible investment seriously? Clients choosing to work with Manager A over Manager B because of Manager A’s competency in ESG, approach to responsible investment and commitment to Stewardship, Oulton says.

As for his dislike of ‘responsible investment’ as a phrase, he says, “There are so many times I’ve had peers in various organisations who have said they prefer irresponsible investment because it was much more fun. That kind of thing’s not only irritating, it’s just not helpful.

We talk about the quality of investment, we talk about stewardship and we talk about the engagement and culture within the organisation. That’s responsible investment to First State. It’s those elements. And people understand that.”


Will Oulton is the global head of responsible investment at First State Investments based in the UK. He was previously head of responsible investment for Mercer Investments across Europe, the Middle East and Africa and director of responsible investment at FTSE Group. In February 2012, he was appointed vice-president of the European Sustainable Investment Forum (Eurosif) and, in the same year, was also appointed to the board of the UK Sustainable Investment and Finance Association (UKSIF). He is a fellow of the Royal Society of Arts, an honorary associate professor at Nottingham University Business School’s International Centre for Corporate Social Responsibility and sits on several investment advisory committees. First State is due to publish its seventh Responsible Investment & Stewardship Report on March 26.

Further reading:

First State boosts responsible investment prowess with first stewardship principles

First State annual review highlights importance of responsible investment

FTSE: sustainability at the world’s leading investment index provider

From ethics to sustainability: shifting the investment debate for 2014

The Guide to Sustainable Investment 2014


Will Self-Driving Cars Be Better for the Environment?



self-driving cars for green environment
Shutterstock Licensed Photo - By 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 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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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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