Investing In Climate Change

Climate change should be grasped as an opportunity to truly put your wealth to work in attractive investment opportunities as the world moves to a low-carbon economy.

“It’s the biggest opportunity in the history of the world – it’s the biggest investment opportunity, but we have to have a clear vision, we have to have policy leadership… to bring the world community together to get the financing that is needed to move the momentum more quickly,” former U.S. Vice President Al Gore told the discussion.

In the United States, 70 percent of new electricity generation capacity last year came from solar and wind, noted Gore, outlining an opportunity to create a global industry based on clean energy sources, retrofitting buildings and adopting sustainable agriculture and forestry.

“What the world needs is the vision that the solution to our global economic malaise is precisely the solution to the climate crisis,” said Gore, who thought the United States was more than 50 percent likely to remain in the Paris climate change agreement.

I recently had the opportunity to discuss Climate Change with two investors.

Frank Heffernan’s views were beautifully penned here. I encourage you to read and consider sourcing his book that represents traditional Australian Bush Poetry.

There are signs of global warming and climate changing too,
Ecological disasters that the world is going through.
The ice-caps are all melting and the seas are on the rise,
We’re polluting this old planet, its water, air and skies,
There’s the greenhouse gas emissions from killing all the trees
That’s heating up the oceans by one or two degrees.
The ozone layer is thinning, causing ultra violet rays,
We could all be getting cancer unless we change our ways.
The rivers are eroding, the fish are dying too,
From the water still and stagnant with algae green and blue.
Our farmlands are going saline, what isn’t blown away,
Without sufficient cover there’s a dust-storm every day.
There’ll be a plague of insects or a grand pandemic ’flu
That may knock out half the people – including me and you!

 

What stage we’re at in climate change is not exactly certain,
We’re glimpsing at the future through a dim and misty curtain.
Most pundits can at least agree there’ll be a lot less rain,
To grow our staple food crops and fill the golden grain.
Expect wild and windy weather, drought and searing heat,
Withering crops and pastures, leaving stock with nought to eat.
The scientists are worried – they just don’t know what to do,-
“Should we regenerate, revegetate, re-cycle or renew?”

 

Have our governments got the answers, can we sit back and relax?
They’ll give us what they think we need – a bloody carbon tax!
There’ll be a national summit, with the brightest and the best,
Who’ll argue and debate it in a public talking-fest.
And spending lots of money till the coffers all run dry,
And it still won’t fix the problems, in spite of their best try.

 

The cause we know is simple; the persistent greed of man.
How are we going to right it? I don’t believe we can.
The trouble with humanity, we have some fatal flaws,
Our pride and greed and envy keep leading us to wars.
There are warning signs in nature we constantly ignore,
And no matter what man’s given, we’ll always grasp for more.
But all the riches in the World, what are they really worth?
If we destroy the very core, of this our Planet Earth.

 

Frank Heffernan
April, 2008

 

 

Glennon Capital believes that resource constraints and environmental challenges like climate change, pollution and water scarcity necessitate significant change. This requirement for change should be both at the domestic household level and to business practices. These inevitable changes present significant investment opportunities and risks over the coming decades. Consequently, our research is directed towards developing a deep understanding of companies and industry dynamics, which in conjunction with robust valuation frameworks enables us to identify stocks that offer attractive return potential.

We believe it is our responsibility to encourage companies to maximise investment returns through good “ESG” practices, including respect for society and the environment. As shareholder’s in many companies, we are well-placed to actively promote best-practice in environmental, social and governance matters. Evidence suggests that companies which rank among the leaders in sustainability tend to outperform over the long term.

Each and every analyst at Glennon Capital is responsible for our Responsible Investment research, inclusive of consideration of the environment, social considerations, corporate governance and proposed engagement activities. Our aim is to hold a portfolio of shares that is representative of out RI ESG Policy and is aligned with our client’s investment mission. Responsible Investment is about creating value, mitigating ESG risk and taking advantage of ESG opportunities as they arise.

There are a variety of reasons to adopt a responsible investment and ESG policy within Investment Management. When asked from drove our policy it is was the staff first then the client desires in consultation. I hope we are aligned in our beliefs.

The first step for anyone interested in RI ESG investment is to agree on your position and then discuss the approach with the Manager. The ideal relationship for Glennon Capital is one where the client establishes clear expectations they for transparency, governance and returns. I welcome that opportunity to discuss your view and the position of Glennon Capital.

Written by Tarren Summers
Article posted 07/12/17