Capitalism gets a rough ride from many climate crusaders, who say it encourages reckless growth and undervalues the benefits of a clean, safe environment. But capital is just a tool, and increasingly it’s being used to support pro-planet policies.
The new tool of green investing is short selling – a tactic in which investors hope to profit from declining stock prices.
Selling short exposes investors to sky-high risk: your target security could theoretically double or triple in price before you buy it back. But selling short can produce big profits in a down market – and may even change the behaviour of the company you’ve targeted.
As green investors seek out ever-higher returns, they’re not just buying stocks of “green” companies involved in sustainable activities or renewable energy. They’re selling big-carbon companies short, confident that those companies’ unsustainable practices will appeal to diminishing numbers of customers and investors.
It’s a game anyone can play. If you’d sold stock in Canada’s second-largest oil producer, Imperial Oil, on Dec. 1, 2018, and then bought the shares back a year later, you’d have paid $33.15 for a stock you’d previously sold for $39.57 – giving you a profit of $6.42 a share, or nearly 20%. Even better, if you’d played the same game with Husky Energy, you’d have made a profit of 72%, as the stock plunged from $16.50 to $9.58.
Since 2012, the number of sustainability-focused investment funds launched in Europe has tripled, to more than 300 funds holding US$30.7 trillion in assets. As the industry grows, traders search harder for good deals, compelling many to focus on the short side. One money manager running a new US$25-million fund at Trium Capital told Bloomberg, “There are a lot fewer companies that have good solutions than don’t. There are plenty of companies out there that we think could be interesting on the short side.”
BNP Paribas plans a similar strategy in its new Environmental Absolute Return Thematic Fund. It will short companies with “unsustainable or technologically inferior business models vulnerable to transition risk.”
Australia’s Morphic Asset Management runs an ESG (environmental, social and governance) fund that excludes investment in companies involved in environmental destruction – but it allows its managers to bet against them.
Many green investors hope their shorting will serve as a warning to companies to take the green economy more seriously. This pressure will only grow, as 35% of hedge funds now consider ESG factors in making investment decisions.
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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