Page 4 - DIY Investor Magazine | Issue 30

‘A WAFER THIN MINT.......?’
With ‘cooling centres’ in the Pacific North West, biblical flooding in Europe and China and wildfires from California to Siberia, surely even climate change deniers must now get it. The
IPCC report delivered a ‘code red for humanity’ with scientists warning that only an immediate and dramatic reduction in the burning of fossil fuels can prevent climate catastrophe.
So, will Boris Johnson use COP26 to turn worthy words into action? He’ll have a tough crowd – Greta Thunberg recently called the UK’s claim to lead the world in tackling climate change a ‘lie’.
‘Jet Zero’ is one of Johnson’s headline grabbing initiatives
- unfortunately it is based on allowing aviation – the fastest growing contributor to greenhouse gas emissions - to mushroom until a ‘techno-fix’ comes along; a bit like Chris Whitty saying 16 pints of Old Growler a day is fine because by the time you need a new liver, we’ll be able to grow one on your dog’s back. Hopefully.
‘Tipping points’ will inevitably feature in Glasgow as we learn where we have caused irreparable damage to the planet, and where there is still hope. We may also look back at the recent ten-day ‘Impossible Rebellion’ in London as a tipping point.
Social commentator James O’Brien once described Extinction Rebellion activists as ‘crusties who knit jumpers from their armpit hair’ – but this crowd was different – scientists, doctors, lawyers; all petrified of the damage we continue to do and fatigued by gaslighting and greenwashing.
If the ‘Disgusteds’ of Tunbridge Wells decide ‘up with this we will not put’ it’s a safe bet this government will take green issues rather more seriously.
Mark Carney heads a task force investigating carbon credits, which many see as a licence to pollute; BA claims it can make your flight to Rome ‘carbon neutral’ for £1.09 – but what happens when the token seedlings it plants go up in smoke?
If there are to be solutions, there must be trust. Bristol Airport claims it will be ‘carbon neutral’ by 2025; but that neglects the 94% of its emissions that come from vehicles and planes. Pardon?
Stakeholders can wield great power but must also shoulder responsibility; Bristol Airport is owned by the Ontario Teachers’ Pension Plan with a mission to ‘ensure retirement security for its 329,000 members’ – but that should be achieved in a way that aids the fight against climate change rather than hinders it. Once nice to have, ESG investing is now woven into the fabric of asset management, even if XR believes the City has some way to go before it embraces it as a brother in arms.
Inevitably there will be an increasing number of investment opportunities for those wishing to be part of the solution – HydrogenOne Capital Growth recently became the UK’s first closed-ended fund focusing on ‘clean hydrogen’, immediately attracting £25m of ‘old money’ from chemicals giant Ineos. How investors can make the most positive impact is a moot point; should fossil fuel companies be ‘punished’ for past activities with money switched to green fledglings, or should the old guard be entrusted – with strict scrutiny - to accelerate the development of alternatives?
Incongruously, Marlboro maker Philip Morris now has a mission to ‘unsmoke the world’ as it morphs into a ‘healthcare and wellness company.’
In this issue we hear from an active manager sticking with fossil fuel investments because ‘engagement is better than divestment as it will more likely lead to better practices over time’. He also achieved a 15% return.
The increasing frequency of extreme climate events requires immediate and robust action and investors have an important part to play; ‘slowing the rate of growth of..’ feels a bit like the wafer thin mint.
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DIY Investor Magazine | Sept 2021 4