We’ve Gone Green

 

August 2021
Peter Eriksson

HOW DO YOU GO GREEN?

 

For most companies, “going green” means buying carbon offsets. You pay another company to, for example, plant trees or build wind turbines. Does this cancel your company’s carbon footprint? Depending on who you ask, the answers range from absolutely to it’s complicated to not really or not even close.  Yet one thing seems clear. In the absence of anything else, offsets are infinitely better than nothing.  

“We’ve gone green” can also mean your company vehicles are now powered by natural gas, or even that the paper plates in your lunchroom are now compostable. There are no standardized metrics. Practically any company these days can (and does) claim to have gone green, earnestly burnishing their eco-credentials because it’s good for business.

On a personal level, of course, “going green” has quite different meanings. You can go green with envy when your neighbor buys a new car, or when a co-worker is promoted. You can “be in the green” after winning the lottery. You can even have a green thumb, like my colleague and company founder Richard here, with part of his amazing flower garden that makes me green with envy.

[Photo of Richard with his flowers]

INVESTING IN VALUES

Looking at “going green” from another perspective, our personal savings can be deposited into a CD or money market account, basically sitting there and doing nothing (especially with today’s abysmal interest rates). Or these funds can support companies who are deeply involved in the good fight. That’s when the word “savings” takes on a deeper meaning.

As in saving the environment.  

For me personally, and as it turns out, for everyone who works here at Secure Retirement, going green has a deeply fulfilling meaning. I know because we’ve all been talking about this recently. It has to do with how our savings can meet our values, and the quiet satisfaction that comes from it. 

Better still, knowing an investment is making the world a better place really is like having one’s cake and eating it too. Because attractive returns are the frosting on that cake. The Green Revolution is picking up speed exponentially– and helping support some of its prime movers is rewarding in more ways than one. In other words, helping the planet does not always require a sacrifice. 

 

Here are some descriptions of some of the companies and funds that employees at our company, as well as a growing number of our clients, are supporting  with their investments. I’ll leave out the ticker names– see if you can guess who they are. Contact us and we’ll spill the beans, divulging all the details. Then you can research their financials and performance, judging for yourself how rock-solid their environmental commitment is. I feel certain you’ll be as impressed as I am.

Let’s start with one of our favorite companies. As the largest private bondholder in the world, with offices throughout the Americas, Europe and Asia, they have more than $2T assets under management. Yes, the “T” stands for trillion. That kind of size carries know-how and stability, and the clout to require sustainable best practices in the companies it finances. We believe their eco-performance is world-changing, with “over 80% of holdings of corporate bond issuers engaged on ESG”. Couple this with an attractive track record for returns on investment. Ring any bells? 

Our next company has been named the “world’s most sustainable corporation 2021”. A global specialist in energy and digital technology, they are active in more than 100 countries. With more than 130,000 employees, this company was environmentally focused long before it became fashionable, receiving awards not just for its own stringent sustainability requirements, but for success in converting its entire supply chain to zero carbon commitments.

Third up is our fund that describes itself as “A global thematic strategy investing in companies that are developing innovative solutions to resource challenges in four key areas: new energy; water; waste and resource recovery; and sustainable food, agriculture and forestry.” That’s quite a mouthful, but here is what it means. Confronting environmental challenges around the world is not just this impressive team’s passion, but its reason for being. And they really get stuff done. 

Fourth happens to have been the very “first U.S. public company solely dedicated to investments in climate solutions, providing capital to leading companies in energy efficiency, renewable energy, and other sustainable infrastructure markets.” They were the first, and remain one of the very best. In their words, “We make investments in climate solutions by providing capital to leading companies in energy efficiency, renewable energy, and other sustainable infrastructure markets. Our goal is to generate attractive returns from a diversified portfolio of projects with long-term, predictable cash flows from proven technologies that reduce carbon emissions or increase resilience to climate change.”

We’ll stop here, though there are many more. But we want to end with our most important point. We’ve talked to a lot of our new clients about ESG.  When they find out how, unknown to them, those  typical “Environmentally-Focused” offerings were investing their money,  most people tend to “go green”– as in, turning a queasy shade of “green-around-the-gills”. Why? It’s because funds labeled ESG these days are most often invested in straight FAAMG, meaning the Big Five– Facebook, Amazon, Apple, Microsoft and Google. I think Jeff makes this point powerfully in his recent blog about run-of-the-mill “Sustainable Investing”. 

That’s not the case with what we like to call our True ESG Performers. Notice the common theme in the ones we described? To my mind, this is Socially Responsible Investment at its finest and most effective, in established, growing companies with stable balance sheets and bright prospects (though of course *no financial returns are ever certain). Please feel free to drop Jeff Warren, our ESG specialist a line—he’s delighted to talk about this investment sector, since it’s one of his very favorite subjects. 

Peter

*All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

 

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TACTICAL ALLOCATION

The Defensive Growth Tactical Allocation Strategy is designed to capitalize on economic and market fragility, which has been brought about by central bank interventions, corporate debt levels, demographic shifts, business cycles and other factors.

 

These factors may express themselves as credit/ stock market events, potentially significant in the near term. The portfolio is a defensive yet opportunistic strategy.

 

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