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Monday, May 1, 2017

Trump Might Not Believe In The Risks Of Climate Change - But Investors Do And They Are Taking Action

Great headline.  Exactly what we've been exhorting.  We don't believe this argument is political, and will not be fixed by talking.  The resolution will be through investments and rebuilding our economy.

Like other investors, we are bullish on the amazing returns available within the sustainable marketplace:


The 45th President of the United States might think climate change is a hoax invented by the Chinese, but there is a fair chance that the investors who put money into his hotels and casinos think it is rather more serious than that.

New research from the Asset Owners Disclosure Project (AODP) reveals that 60% of the world’s 500 biggest asset owners (AOs), representing assets under management of $27 trillion, now recognize the financial risks of climate change and the opportunities that are created by the transition to a low carbon economy. That figure, revealed in AODP’s fifth Global Climate Index, is not just startling in itself, but it is an 18% increase on the figure last year.

The research suggests that regardless of Trump's position, investors will continue to press for change because they do not want to see their returns harmed by climate-related issues – whether those are physical (such as extreme weather events and sea level rise), regulatory (such as the UK’s Climate Change Act and France’s new world-first law requiring investors to disclose climate risk) or global initiatives such as the Paris Agreement that commits governments to cutting emissions to keep average temperature rises below 2°C.

There has also been a proliferation of initiatives that highlight the risks to investors, including CDP’s Carbon Disclosure questionnaire, the Principles on Responsible Investment, the Task Force on Climate-Related Disclosures and Science-based Targets.

In addition, the companies in which investors might put their money are also acting on climate change, with many of the biggest corporations – such as Apple; BMW; AB Inbev, the world’s largest brewer; General Motors; and Walmart – committing to source all their electricity from renewable sources.

This trend and ongoing technological advances are making renewable energy cheaper than ever before, as illustrated by the fact that clean energy capacity rose by 9% in 2016, but the amount of dollars invested was 17% lower than the year before. The price of solar power fell 83% from 2008 to 2016 and the price of wind power dropped by 73%. A growing number of projects are being developed without subsidies, even in sectors thought to be still expensive such as offshore wind.
And despite President Trump’s pledge that he will rescue the coal industry, the industry’s glory days are behind it, in the industrialized world at least.

 In April, for the first time since the Industrial Revolution, the UK used no coal to produce electricity while in the US, the Institute for Energy Economics and Financial Analysis (IEEFA) revealed that 70% of coal purchased in the US in 2016 went to power plants that are due to close by the end of 2018. When even the Kentucky Coal Museum installs solar panels to save money, it is clear which way the wind is blowing.

The efficacy of clean energy sources will be further boosted by the advent of energy storage, whose costs are also plummeting – lithium-ion batteries are 73% cheaper than they were in 2010 and will be a further 75% cheaper by 2030, says Bloomberg New Energy Finance’s founder Michael Liebreich.

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