First State Investments (First State) has published a report cementing its promise to tackle climate risk by implementing strategies to its business. Their 2016 report highlights how the company will achieve responsible investments and stewardship practices.
First State has published its ninth annual Responsible Investment & Stewardship Report, in which it further enhances its reporting on environmental, social and governance (ESG) issues, including disclosing its climate risk exposures across a number of asset classes for the first time. The report includes 34 case studies to illustrate the firm’s approach to stewardship.
The report lays out First State’s plans to further develop ESG integration into its investment strategies and highlights the approaches taken to deepening the understanding of how climate risk may impact long-term returns.
Mark Lazberger, Chief Executive Officer at First State Investments said: “This year’s report provides our clients with many examples of how we are striving to achieve the highest standards of responsible investment and stewardship practice and disclosure on their behalf, across our investment business.
“We believe that ESG issues comprise sources of long-term risk and return and therefore directly impact the investment outcomes we deliver for our clients. Although we have achieved many of the goals we have set ourselves, and continue to deliver strong investment performance, we still have much work to do to improve our understanding and knowledge of emerging ESG issues and to improve our practices in response to our clients’ increasing interest and scrutiny.”
In the 2016 report, First State has made a commitment to improving climate risk disclosure with active equity teams disclosing fossil fuel (gas or other) and non-fossil exposures for the first time, both by percentage of companies and by assets under stewardship. This is accompanied by statements on how teams see and manage climate change issues and risk.
First State has an integrated approach to responsible investing, but encourages each team to implement this in the most effective way for their asset class and investment strategy. Investment teams highlight some of the challenges and opportunities facing them as investors including:
Emerging Markets Debt – the economic transformations required in response to climate change can become an opportunity for emerging markets. For example, Morocco has large potential in solar energy and has been able to operate the world’s largest solar power plant, reducing its dependency on high carbon fossil fuel imports.
Listed Infrastructure – for energy utilities, energy infrastructure and railways, carbon exposure has the potential to lower a company’s overall quality score. Carbon risk is accounted for within the team’s financial models as it has direct implications for the earnings potential of an infrastructure business. For example, with the use of coal declining in the US along with tax incentives for renewables, the team have adjusted their freight rail volume numbers to take this structural change into account.
Will Oulton, Global Head of Responsible Investment at First State Investments said: “Our approach to responsible investment and stewardship continues to be client focused and investment driven. We believe the varied approaches of our individual investment teams are a key attribute of our business, and are enhanced by our improving systems for ESG risk assessment and our strengthened RI governance structure.
“We believe that climate change will impact the long-term performance of our clients’ assets in different ways. As allocators of capital, shareholders and stewards, the analysis, engagement and subsequent decisions we make will have an influence on our clients’ long-term interests.”
These 5 Green Office Mistakes Are Costing You Money
The sudden interest in green business is very encouraging. According to recent reports, 42% of all companies have rated sustainability as an important element of their business. Unfortunately, the focus on sustainability will only last if companies can find ways to use it to boost their ROI.
Many businesses get so caught up in being socially conscious that they hope the financial aspect of it takes care of itself. The good news is that there are plenty of ways to go green and boost your net income at the same time.
Here are some important mistakes that you will want to avoid.
Only implementing sustainability on micro-scale
The biggest reason that brands are going green is to improve their optics with their customers. Too many businesses are making very minor changes, such as processing paperwork online and calling themselves green.
Customers have become wary of these types of companies. If you want to earn their business, you are going to need to go all the way. Bring in a green business consultant and make every feasible change to demonstrate that you are a green organization from top to bottom.
Not prioritizing investments by long-term ROI
It isn’t realistic to build an entirely green organization overnight. You will need to allocate your capital wisely.
Before investing in any green assets or services, you should always conduct a long-term cost benefit analysis. The initial investment for some green services may be over $20,000. If they don’t shave your cost by at least $3,000 a year, they probably aren’t worth the investment.
Determine which green investments will have the best pay off over the next 10 years. Make these investments before anything else. Then compare your options within each of those categories.
Implementing green changes without a plan
Effective, long-term planning is the key to business success. This principle needs to be applied to green organizations as well.
Before implementing a green strategy, you must answer the following questions:
- How will I communicate my green business philosophy to my customers?
- How will running a green business affect my revenue stream?
- How will adopting green business strategies change my monthly expenses? Will they increase or decrease them?
- How will my company finance green upgrades and other investments?
The biggest mistake that too many green businesses make is being overly optimistic with these forecasts. Take the time to collect objective data and make your decisions accordingly. This will help you run a much more profitable green business.
Not considering the benefits of green printing
Too many companies believe that going paperless is the only way to run a green organization. Unfortunately, going 100% paperless it’s not feasible for most companies.
Rather than aim for an unrealistic goal, consider the option of using a more environmentally friendly printer. It won’t be perfect, but it will be better than the alternative.
According to experts from Doranix, environmental printers have several benefits:
- They can process paper that has been completely recycled.
- They consume less energy than traditional printers.
- They use ink that is more environmentally friendly.
You want to take a look at different green printers and compare them. You’ll find that some will meet your needs as a green business.
Poorly communicating your green business strategy to customers
Brand positioning doesn’t happen on its own. If you want to run a successful green business, you must communicate your message to customers as clearly as possible. You must also avoid the appearance that you are patronizing them.
The best approach is to be clear when you were first making the change. I’ll make an announcement about your company‘s commitment to sustainability.
You also want to reinforce this message overtime by using green labels on all of your products. You don’t have to be blatant with your messaging at this stage. Simply provide a small, daily reminder on your products and invoices.
Finally, it is a good idea to participate in green business seminars and other events. If your community has a local Green Chamber of Commerce, you should consider joining as well.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
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