Did you realise the way you invest could have a significant impact on our planet’s future?
Global warming is increasingly seen as the single biggest challenge facing humanity. But you wouldn’t have thought so, looking at the range of investment funds and options available to investors.
C2C Partners sees two massive problems with continuing to invest in fossil fuel businesses: ethical and financial.
The ethical problem is that to carry on investing in such businesses contributes to global warming, as their activities generate significant carbon emissions.
But there’s also a financial problem: increasingly, these investments will be seen as poor. The reason? As more and more investors seek to avoid companies that extract or distribute fossil fuels, those investments will start to underperform. And it’s not just what they bring out of the ground. Companies which own huge oil or gas reserves sitting on their books as major assets will find the value of those assets will be devalued, possibly to zero. They become “stranded assets”.
You won’t find that mentioned by most fund managers out there. They profit too much from the status quo. The solution is to look at responsible and ethical investment.
While it’s an area that’s been around a long time, until recently the focus had mostly been on traditional exclusions such as tobacco and armaments. They were also quite high cost.
Now, we are seeing the emergence of a new range of sustainable investment funds that have a specific focus on minimising or excluding investments in fossil fuel companies -not just distribution, but also take into account reserves. This could reduce potential carbon emissions by up to 95% compared to a non-screened equivalent fund. Even better, those funds can do so on a low cost basis – truly a “sustainable investment”. We are really excited!
C2C principal Peter Lee has been involved in the responsible/ethical investment area for nearly 20 years, and says this really is a game-changer, the most exciting thing to happen in sustainable investment in a very long time.
Having put some of these funds through our exhaustive assessment process, we’ve now started rolling out the new funds in the majority of our portfolios, and will introduce them to clients over coming months as part of our review process.
Success as an investor starts with the key questions of why, what, where, when and how.
Recently, one of America’s largest life insurers (New York Life) did a survey of over 2,000 people to find out what they considered to be their largest financial mistakes, and how long it took to recover from them.
Rob and Mary