As I draft this third instalment in a series of articles on investment perspectives on fighting climate change, the UN-sponsored COP26 (Conference of Parties) gathering of world leaders is taking place in Glasgow, Scotland. This conference aims to accelerate the goals of the Paris Agreement and the United Nations Framework Convention on Climate Change.
Allow me to express some scepticism that this meeting will produce any useful outcomes in terms of tackling climate change. As a long-time professional in the ESG/SRI space, I can attest to the fact that, embedded within several global financial stock indexes are thousands of well-known corporations that have already met or are planning to exceed the conditions agreed to in the Paris Accord. Forward-looking corporations were quick to acknowledge the changing climate, stakeholder demands, and the need to embrace technological upgrades/products.
I believe, as global citizens, our best chance to effect positive change is to vote with our wallets/capital and not with our ballots.
In this on-going series, I will examine what I consider the top FIVE game-changing pathways to improving our shared global environment. While this will not happen overnight, I believe the next 3 years will be a pivotal time for the world. Trillions of critical dollars have already been raised for the first deployment in the private sectors via green loans, bonds and angel investing.
The downside is that of all the advanced technologies required to combat climate change, develop and drive the process, Canada is woefully lacking. Despite this regrettable situation, investors need not be left out. Skilled investment counsellors schooled in this valuable space know where to build out portfolios to effectively contribute to the fight against climate change.
However, as I pointed out in my last article, beware of funds, pooled funds and exchange traded funds where underlying assets may contain questionable “greenwashed” holdings. The world has an abundance of outstanding candidates who are already embracing these pathways.
Let me identify them by size and overall carbonization effect:
- Global Electrification: While auto conversions are progressing, moving beyond this comes industrial usage, building systems and modifications/upgrades, software utilization for batteries.
- Agricultural change: We are also seeing farm equipment conversions, methane inhibitors and management, alternates to meat production, improved manure usage and processing.
- Power grid upgrades: Improvements in power storage technologies, control system modifications, home and building materials and grid capture of excess energy generated from homes, offices and vehicles.
- Hydrogen: It’s all around us and it’s inexpensive! There is considerable long-haul fuel potential, improvements in steel and cement production, and progress in the aviation sector.
- Carbon capture: Direct air capture is happening now, as is the development of CO2 concrete, pre-and post-combustion capture, and bioenergy development.
The rise in global temperature has started to abate to the extent that the 2-degree U.N based target is potentially achievable, so we shouldn’t focus entirely on negative press. If you believe this is the most important issue facing humanity today and wish to play a viable and practical part in finding effective solutions, I encourage you to continue following this series, as I will delve into each of the five pathways in-depth in the coming weeks.
