Investment for the planet and her people

Investment into sustainable funds is finally enjoying the limelight from both individuals and businesses.

by Bella Ali-Khan | Environmental | 15 March 2022 Share:

Over the past few years, sustainable funds, brands and initiatives investing in everything from renewables to green tech have soared. This is in part thanks to a big increase in individual investment and robo-investment, which took off in the UK and US during the pandemic. (1) But it’s not just individuals – businesses too are looking to fund decarbonisation, taking positive steps.

However, investment into sustainable development that seeks purely profits, without benefiting communities, isn’t very green at all, in our eyes. Regardless of the boom of sustainable investment, if the wealth that’s made from these investments isn’t redistributed, is it ethical?

This becomes particularly poignant when so many of the communities most severely threatened or affected by climate change are the ones who have, to date, caused the least impact. The latest Intergovernmental Panel on Climate Change (IPCC) report, released on 28th February, states:
“Weather extremes are occurring simultaneously, causing cascading impacts that are increasingly difficult to manage. They have exposed millions of people to acute food and water insecurity, especially in Africa, Asia, Central and South America, on Small Islands and in the Arctic.” (2)

So the question is:

How do we encourage sustainable investments in a way that also considers how the profits made can have a positive impact for people, for the communities with climate change on their doorstep?

To move forwards, first we must look back

There has long been an uneasy sense that economic growth doesn’t align with environmentalism. And doesn’t consumerism demand we buy and consume ever more? Surely this flies in the face of the reduce, reuse, recycle mantra.

Since the onset of the Industrial Revolution, fortunes have been made directly at the cost of the natural world. And 250+ years on, we’re still adding to our teetering environmental debt.

With a push from the pandemic, the tide is turning. With a rise in public demand for climate responsibility, investment strategy is shifting to have a stronger consideration towards environmental, social and governance factors. Blackrock, the world’s largest asset manager, with $10 trillion in assets under management, has invested more than $4 trillion in sustainable technology. (3) More generally in 2021, private investment in renewable energy surpassed the investment in fossil fuels. (4)

Businesses are starting to realise the money-making potential of sustainable practice:
“We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.” Larry Fink (5)

We believe that investing in technologies, companies and solutions that put the planet first are the only projects we should be investing in. But this can’t simply be about profits. What about the lives of those affected by our society’s previous choices? We cannot forget our human, social responsibility in our eagerness to invest in green solutions.

The rising temperatures of our earth are causing natural disasters of increasing severity, devastating communities globally. The January volcanic eruption in Tonga sent tsunami waves of 50 feet across the Pacific Ocean. Rural towns and cities in Australia are currently flooding, and in December, tornados in the States ripped though the south. (6)

We commend investments that are creating a safer and more sustainable future, but also ask, how is it helping the communities suffering the impacts of climate change today?

It isn’t responsible for large companies to make huge profits from sustainable investments, when many made their original capital by investing in the very industries that contributed to climate change. The process of investing in green technologies in itself needs to be more sustainable for society, so that we all thrive.

One for you, one for me

Sustainable investments, whether they be in energy, technology or other initiatives, must also consider their ethical, social opportunities too. Say if you invest in renewables, should a percentage of your return go to communities suffering with intense air pollution? We need models that distribute wealth created from green investments. Many airlines have the option for passengers to offset their ticket costs, a round up or donation, supporting projects that offset their carbon footprint. We need initiatives like this for private equity and investments that are financially supporting communities, as well as sustainability projects.

For us, it’s about building businesses that balance sustainability and social responsibility. That’s the key. Take TOMS® shoes, with their One for One® model. It served the goal of using business to directly improve lives by donating a pair of shoes for every pair of shoes bought. The model ran from 2006-2019. Today, TOMS® gives a third of profits to grassroots programmes.

Business as a force for good

And of course, there’s B Corp, a global collective of companies using business as a force for good. There are 640 B Corp businesses in the UK, and over 4,000 in the world. Together, these businesses are on a mission to transform the global economy to benefit people, communities and the planet.

To become a B Corp and join the collective, your business must pass a rigorous, ongoing process. Impact is assessed on a range of factors, each analysed and scored. Crucially, it results in a current score, and a goal to work towards. Sections include people, communities and the environment. Individually scored, equally important.

Investing in the future. Everyone’s future

Green investment is the way forward, of that there’s no doubt. And its current rise is cause for celebration. But our investments need to not only go towards a healthier planet, but the people on it who need help too.

Would you like strategic, creative ideas on how your brand can be part of the movement to sustainable, ethical investments? Give us a bell. We’d be delighted to help.

01892 887239 | theteam@catchafireagency.com

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