By Craig Miller, Next Avenue
A few years ago, Lee Hilliard and his wife Linda, of Manchester, Conn., were torn over what to do with their investment portfolio. The 72-year-old retired media consultant and his wife, who’s 64, had come into some Chevron
shares from Linda’s inheritance in 2016 and then again after her mother died in 2018, and they disagreed over what to do with the oil company stock.
For Linda, the shares were part of her father’s legacy and hey, they were paying decent dividends to boot. But Lee was uncomfortable.
“I’d been feeling badly about the oil stock,” he recalls. “As climate change becomes more impactful, I would say over the past five years I really started to pay attention and thought that it would be better not to invest in a fossil fuel company and maybe to take that money and put it toward something greener.”
He’s in good company. The Global Sustainable Investment Alliance estimates that about a third of all managed assets worldwide are now invested with some form of sustainability consideration in mind. If it is even close to that proportion, that’s a seismic shift.
Why Green Investing Is Blooming
In the early days of “green investing,” that is, putting your money where it could help the environment, one of the raps on this strategy was that by definition, it limited diversification in your portfolio. Not all companies that are “doing good” are going to do well.
But recent events like the unprecedented heat and wildfires in the western U.S., catastrophic floods in Germany and China, and —for the first time ever — an extreme heat advisory from weather authorities in Great Britain, have only added to the drumbeat of reminders that severe climate impacts have arrived.
As these events expose the risks to businesses worldwide, it’s become clear that investing with an eye toward climate change has arrived as well. In the first quarter of 2021 alone, investors poured $178 billion into “green” investment funds globally.
“It’s real. You need to know about it,” says Lucas Mansberger, an investment strategist and senior manager selection analyst at Greenleaf Trust, a Kalamazoo, Mich.-based firm. (Despite its name, Greenleaf does not focus exclusively on “green” investments.)
“You can see that environmental issues like the heat waves out west, the rising sea levels — they’re beginning to be material and salient to companies and to investors in a way that they weren’t twenty or thirty years ago,” Mansberger said. “And because that’s happening, you see more attention from the investment community.”
A year ago, when the Covid-19 pandemic was stealing most of the headlines, CNBC proclaimed that a new green investing “megatrend” was in the works. The pronouncement was triggered in part when Larry Fink, CEO of the global investment juggernaut BlackRock
, predicted that the imperatives around climate change would trigger a “fundamental reshaping of finance.”
Fink, whose firm had $7 trillion under management at the time, warned that, “companies, investors and governments must prepare for a significant reallocation of capital.”
Ambitious Climate Goals of the Biden Administration
Fast-forward to 2021, when the Biden administration has made climate a centerpiece of its agenda, setting out the most ambitious environmental to-do list in the nation’s history. Goals include cutting greenhouse gas emissions in half by 2030, a carbon-free electrical grid by 2035 and becoming a net-zero-carbon nation by 2050.
If President Joe Biden is able to muscle his sweeping climate program through Congress — or even a portion of it — tens of billions of dollars in programs and incentives will be unleashed to benefit companies in the business of “decarbonizing” America and the world. The current infrastructure plan alone includes $73 billion to upgrade the nation’s electrical grid and expand renewable resources, and more than $15 billion earmarked for electric vehicle charging stations, purchases of electric and hybrid school buses and other clean transit projects.
“The required investments are going to be much more far-ranging than that,” predicts Manberger. “Investments in climate resilience, generally for coastal communities. Upgrading infrastructure for changing weather patterns. Physical infrastructure. We’re in the first few innings of that.”
But how can individual investors take advantage of this?
One way is to “follow the money,” investing in certain stocks and mutual funds and exchange traded funds (ETFs) that own them.
For example, the Biden administration is seeking —reportedly with bipartisan support — a 10-year extension of clean-energy tax credits, which will provide a boost to players in the solar and wind energy arena. According to a recent report from RMI, a pro-clean-energy think tank, “the most important year to phase out fossil fuel infrastructure and invest in clean energy solutions is this year.”
But if investing in carbon-reducing companies and technologies seems like a slam dunk, take a breath. As with all investments, there are no guarantees.
In 2019, the Hilliards funneled some of the proceeds from selling their Chevron shares into stocks of three young companies in the electric vehicle (EV) sector. One took off big. Their other two are languishing, currently worth less than they paid for them.
Their experience highlights one of the hazards of trying to pick winners in a maze of new technology aimed at supporting a low-carbon economy. One recent projection by a Chinese manufacturer of EVs, reported in The Economist, foresees an explosion in the market, with as many as 300 companies making vehicles — followed, of course, by a major shakeout that will leave a handful of survivors.
Where to Find Investing Opportunities
Mansberger says that in the midst of this energy renaissance, investment opportunities are proliferating, but it’s a minefield.
“We generally don’t recommend that our clients go out and try to pick the individual winners and losers,” he says. “But if you do want to do it, don’t put in more than you can reasonably lose because many of these companies on the forefront of these technologies are in these dynamic industries. They’re going to be volatile.”
Advisers like Mansberger recommend spreading your risk through mutual funds, ETFs and other diversified investments in the green sector.
It also helps to start with a little introspection.
“You need to do a little bit of homework, first with respect to sustainability goals, and second on your investment goals and needs,” says Mansberger. “What are the reasons you’re interested in green investing? What is it you’re trying to accomplish? What are you most interested in?”
Next, check an online database to see which funds target sustainable investments.
Mansberger points to websites like Real Impact Tracker and FossilFreeFunds.com to help you separate the wheat from the chaff among corporate sustainability claims.
He adds that fund-tracker Morningstar now provides information about the sustainability of a fund’s holdings.
One thing is clear: The one-time cottage industry of green investments is now a force to be reckoned with, and that’s simply a reflection of where the world is heading.
“It’s not about ‘do-gooderism’ anymore,” says Mansberger. “It’s about the future of our economy.”
Investment Consultants With $10 Trillion Make Net-Zero Pledge – Bloomberg
A dozen investment consultants advising on $10 trillion of assets are pledging to cut net greenhouse-gas emissions to zero by 2050.
The group, including Cambridge Associates and Willis Towers Watson, started the Net Zero Investment Consultants Initiative, which identifies nine steps to reach that goal, according to a statement Monday.
International export offices worth the investment, according to Saskatchewan government – Global News
The Saskatchewan government is moving full steam ahead on its plan to open four new international export offices.
The offices will be opening in London, United Kingdom; Dubai, United Arab Emirates; Mexico City, Mexico; and Ho Chi Minh City, Vietnam.
The move will give Saskatchewan a stronger presence in those regions, by expanding the province’s international network, according to the government.
The province says the establishment of these spaces is being implemented in an effort to facilitate investment trade efforts to grow and diversify Saskatchewan’s exports, assisting in COVID-19 economic recovery.
“Now we’re going through the process of hiring managing directors for those offices and we hope to have two of them open in November and two more in the first quarter of the calendar year,” said Jeremy Harrison, Saskatchewan Minister of Trade and Export Development.
The number of international offices will be doubling as the province already has a permanent presence in Japan, India, Singapore and China.
The offices in Japan, India and Singapore were open for businesses earlier this year, whereas the one in Shanghai, China has been operational since 2010.
Staff at the offices work full-time for the provincial government to promote trade and economic interests.
Harrison says despite the pandemic, Saskatchewan companies are able to export approximately 65 per cent of what they produce.
Some popular export items include potash, oil, wheat, canola seeds, lentils, canola oil, peas, canola meal, soya beans, and barley.
Just like the cost to export these products, operating those international offices isn’t cheap.
“It’s about a million dollars per year, per office, our entire international engagement will be about $9 million this year with the eight offices and the administration associated with that, but I mean with the return on investment being over $30 billion of international trade last year…” Harrison explained.
“Of course the offices aren’t responsible for every dollar of that trade, but that being said, having that long-term, on-the-ground presence really has paid significant dividends to the province, we would view it as being a tremendous return on investment,” he added.
Harrison also says with Saskatchewan negotiating its own deals, rather than the Canadian government, the province has been able to secure lower tariffs.
Tension with China grows with blow to Canadian canola farmers
The trade and export development minister goes on to say the Saskatchewan government decided to take trade matters into its own hands, opposed to relying on the federal government because it believes it can secure better deals overall.
In 2019, the minister, with the help of former Conservative Canadian Prime Minister Stephen Harper and his company called Harper and Associates, lobbied senior officials with the government of India to lower tariffs on Saskatchewan peas and lentils.
Harper and Associates is being paid for its role in assisting with the establishment of the international offices. The contract is yearly, and is renewed annually.
Harrison said the meeting resulted in the province temporarily reducing the tariff from 30 per cent to 10 per cent from June to August in 2020 and onwards.
Jason Childs, associate professor of economics with the University of Regina explains why the provincial government may have felt enticed not to leave trade matters to federal government officials.
“I think the perception that Saskatchewan feels underrepresented abroad and our interests aren’t being served, I think that says a lot about what’s going on,” Childs said.
He adds international offices are not uncommon among provinces in Canada, and they are supported across party lines.
International trade essential to Alberta’s food trade: Minister of Agriculture
By Saskatchewan being at the helm of its own trading decisions, Childs says the province can head trade missions that are dedicated to vouching for the specific agricultural products the province has to offer the rest of the world.
“So, the products we produce here in Saskatchewan, are going to be radically different than say the products produced in Quebec or southern Ontario, which are much more manufacturing-driven,” Childs said.
He says if the Canadian government was making these deals, then time government officials spend on having to represent the other jurisdictions across the country would be split.
Childs continues to say there are some notable benefits to Saskatchewan having its own international trading partners to advocate its own interests to, rather than other Canadian provinces or somewhere else in North America.
“Sheer population, sheer market size, the Canadian market is only 38 million people, whereas some of the countries we’re talking about Vietnam, China, India and the U.K., there’s hundreds of millions, billions of people involved, right so it’s a much larger market,” Childs said.
Harrison says these exports will bring numerous job opportunities to residents.
—With files from Mickey Djuric
© 2021 Global News, a division of Corus Entertainment Inc.
Israeli developer of popular apps for creators nabs $130m investment – The Times of Israel
Lightricks, a Jerusalem-based software startup that makes photo and video editing apps, raised $130 million in a Series D investment round at a valuation of $1.8 billion, the company announced on Sunday.
The round was co-led by New York-based global private equity and venture capital firm Insight Partners and Hanaco Venture Capital, with participation from existing investors Goldman Sachs Asset Management, Clal Tech, Harel Insurance and Finance and Greycroft. New investors Migdal Insurance, Altshuler Shaham and Shavit Capital also participated in the round.
Founded in 2013, Lightricks developed a number of photo and video editing tools that are widely popular with content creators on social media networks, especially Instagram, the highly visual content platform owned by Facebook. The company’s suite of 11 apps including Facetune, Facetune Video, and Videoleap has over 500 million downloads worldwide across Android and Apple users, Lightricks has said.
Facetune, the company’s flagship app used to enhance and retouch photos (think tooth whitening and blemish removal) has previously earned accolades such as Apple’s App of the Year and Google Play’s Best of the Year. The app VideoLeap, which offers powerful editing tools for video content, is one of the most widely used tools to create Tik Tok content, the company indicated.
The apps are geared for individual consumers, beginners and professionals, as well as businesses and brands. Lightricks uses a freemium model for the tools, which offers some functions for free while other features require payment to unlock.
Dr. Zeev Farbman, co-founder and CEO of Lightricks, told The Times of Israel on Sunday that business and brand customers present a huge opportunity for the company as it establishes itself “not just as a toolmaker but also a service provider for content creation.”
“We are looking to help people and businesses draw in their audience and engage with them,” he said.
The company said in a statement that it will use the fresh funding to expand and create new platforms and tools for content creators in an effort to “become a one-stop-shop for resources including creative tools, services, and monetization opportunities.”
Farbman said the funding is a sort of “war chest” with which to acquire similar or related companies and startups to leverage their user base for Lightricks’s growth.
He estimated that the company might be “ready for IPO [initial public offering] in about a year.”
“Our mission has always been to continuously strive to bring creators the most advanced technology and help them find new ways to express themselves,” Farbman said in the company statement. “The rise of the creator economy has only exacerbated the need of mobile users to streamline the content creation and monetization processes. With this latest funding, we’re able to help elevate our users’ creativity and capabilities with continued advancements to our technology and offering.”
The creator economy — an industry of bloggers, influencers, brands, photographers and videographers monetizing their online presence — has an estimated total market size of $100 billion and has seen $1.3 billion in funding for US creators in 2021 alone, according to New York-based research firm CB Insights.
Lightricks reported “tremendous growth” over the past year with the COVID-19 health crisis driving people to tap their creativity “to express themselves and earn income during the pandemic.” The company says it saw a 90 percent increase in app usage across its creativity tools in the US alone.
Worldwide, it says, its users develop over a billion creations per year on the company’s apps.
Farbman confirmed that Instagram is the biggest platform for users of Lightricks’ tools “with Tik Tok playing a bigger part overall and Snap seeing a resurgence.”
“The creator economy has changed the way we, as a society, experience social networks,” said Pasha Romanovski, co-founding partner of Hanaco Ventures. “Audiences constantly consume information through the different content channels daily. Lightricks’ platform enables creators to have a broader, more professional and higher-quality set of tools to optimize content.”
Lightricks was founded by Farbman, Nir Pochter, Yaron Inger, Amit Goldstein, Itai Tsiddon, almost all with a computer science or artificial intelligence background. The company is headquartered in Jerusalem with offices in the UK. Most recently, Lightricks opened an office in China to focus on tapping into the country’s huge potential user base. The company employs approximately 500 people.
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