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3 Ways Ethical investing is Helping the Planet

August 16, 2018

 

 

Normally, a company's bottom line on its income statement is its net income, i.e., its profits. The triple bottom line framework, however, extends beyond profits to include social and environmental impact and is revolutionizing the business and financial world.

 

Here are three examples of how Money is being used as a force for good for the Planet:

 

1. BANKING: Green Bonds

 

Mitigating climate change requires changing the way we use energy – and how we invest in energy development. Renewable energy and energy efficiency technologies promise significant potential for reducing greenhouse gas emissions and protecting the environment. Green bonds provide an opportunity to invest in the technology, physical plant and equipment and infrastructure that will deliver emissions reduction outcomes.

 

In December 2014, NAB issued a green bond in the domestic market, raising AUD300 million, which was ring-fenced for financing a portfolio of renewable energy assets including wind farms and solar energy facilities in Victoria, South Australia, Tasmania, Western Australia, NSW and the ACT.

Green bonds are available in some ethical investment portfolios. If you are keen to support the growth of renewable energy then ask for Green Bonds.

 

2.  INVESTMENT MANAGERS: Australian Ethical

 

Fund managers provide an avenue for people to pool their resources together for a greater impact. As far as fund managers go, Australian Ethical are leading the way by actively measuring their environmental impact. According to a recent assessment, the carbon footprint of their investments is 66% lower than the benchmark. Their aim is to achieve zero-emissions by 2050. Their footprint is less carbon intensive than the Benchmark because they:

 

1. Exclude coal, oil and gas;
2. Select for low carbon companies;
3. Have lower investment in carbon intensive sectors such as Resources; and
4. Have more investment in low carbon sectors such as Healthcare and IT.

 

According to European 2° Investing Initiative (‘2ii’), their renewable investments are also aligned with the massive shift that is needed to limit warming to 2°Celsius (2°C).

Furthermore, a study into Australian Ethical’s contribution towards the UN’s Sustainable Development Goals (SDG) estimates their total sustainable impact to be 2.2 times the sustainable impact of an equivalent investment in the overall sharemarket.

 

3. COMPANIES: Unilever

 

Business growth should not be at the expense of people and the planet. At a consumer level, we have a choice where we spend our money. By choosing companies that committed to sustainability, our consumer dollar has a bigger impact. That’s why Unilever, one of the world’s largest companies is changing the way they do business. By using their resources as a business for good, they are addressing issues such as health and hygiene, gender equality, climate change and plastic packaging waste.

 

Unilever has put together a Sustainable Living Plan (USLP) which outlines their plan to achieve profit whilst decreasing their environmental footprint and increasing their positive social impact.

Regarding their environmental impact, they have:

  • 47% reduction in CO2 from energy per tonne of production since 2008

  • 98% reduction in total waste per tonne of production since 2008

  • 39%† reduction in water abstraction per tonne of production since 2008

  • 56% of agricultural raw materials sustainably sourced by end 2017

Ethical investing makes sure that companies like Unilever are in the portfolio, to make sure that not only you get a good financial return, but that the planet gets a better outcome as well.

 

With education and awareness, we can join forces to shift more capital towards companies and investment options that are making a positive impact towards the Planet.

Ethical investing is offering a unique ability to participate in a groundswell of change as business transitions to the triple bottom line of People Planet and Profit rather than profit above all else.

 

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