With the “final warning” from scientists about the climate crisis dominating the headlines this week, I will be far from the only one alarmed at the thought of our planet on the brink of “irrevocable damage”.
When reading the eye-watering figures from the IPCC Climate Change 2023 report, the message was clear; we must act now. The longer we wait, the less achievable the goals to limit the impacts of climate change become. Reflecting on our stewardship of the Earth and the responsibility we all have to care for it for future generations, I considered how this echoes Saffery’s ethos of the responsible stewardship of assets and wealth for the benefit of all beneficiaries.
Our personal and professional responsibilities overlap hugely when working in partnership with clients, for whom environmental social and governance (ESG) investing is becoming more prevalent.
As individuals, we all need to do what we can and think about how we live at home and how we act at work. Small actions – for example turning lights off or using sustainable transport – will be more impactful with the more people who do it, but a lot more than this is needed globally.
Governments alone cannot afford to fund the changes needed - they can regulate, but to make real impact, private capital becomes vitally important. We need new technologies and to support entrepreneurs to come up with solutions to reduce carbon emissions or remove excess carbon from the atmosphere. The good news is that a lot of specialist work has been undertaken in finding solutions to tackle the climate crisis, not only in emissions reduction but also carbon capture.
I recently read of an innovative process, created by Canadian company Carbon Engineering, which extracts carbon from the atmosphere and turns it into a liquid fuel which can replace petrol in normal combustion engines. While this is a new technology, five years from now we could see a very different fuel market, and businesses like this, that are driving innovation, need investment.
Investors can have an impact either through ‘activist investing’ – whereby they use the power of their shareholder voting rights to put pressure on businesses to act responsibly – or by finding investment opportunities in businesses seeking to address the climate crisis.
One of the ways we support our clients is by holding sustainably focussed discretionary portfolios, which screen in the “good” and screen out the “bad”. For clients who wish to make more of a direct impact we also hold private equity funds with a focus on investing for the climate.
For example, we have a fund which invests in a UK company supporting low-income households with energy efficiency initiatives, including the installation of insulation and LED light bulbs. The 2021/22 carbon impact report from that company showed it has reduced the lifetime carbon emissions of supported households by 500 tonnes.
Some of our other climate focussed investments include companies which maintain wind turbines; supply LED technology for industry; design and manufacture electric buses; and promote a circular economy by reselling books that were destined for landfill.
With more and more investment opportunities becoming available in this area, beneficiaries – particularly the next generation – will be wanting trustees to play their part in tackling the problem and will be expecting us to be proactive in finding suitable opportunities. By continuing to build relationships with our network of specialists in the ESG sphere, we can support our clients in their contributions to the global effort to answer the call of climate scientists, who have been left on hold for far too long.
Scientists have delivered a “final warning” on the climate crisis, as rising greenhouse gas emissions push the world to the brink of irrevocable damage that only swift and drastic action can avert.