Duncan Grierson, founder of sustainable investing platform Clim8, is on a mission to fix the ‘dysfunctional’ world of ethical investing. Positive News asks: How?
So, you have a little savings pot – or even quite a big one. You want your money to be used not only for you but also for the environment. Where do you begin?
Well, there’s a burgeoning number of investment funds out there that claim to be run on ‘ESG’ – environmental, social and (good) governance – principles. You may appear to have a lot of options.
It is not a single bit, argues Clim8Duncan Grierson, founder. “A lot of ESG funds just do negative screening, taking out the worst offenders. Many of the leading ones still include fossil fuel companies in their portfolio.” It is, he claims, tantamount to “a load of greenwash”.
It’s what spurred Grierson, a lawyer-turned-venture capitalist who has spent the best part of 20 years investing in the sustainability sector, to set up Clim8. Clim8 is an app-based investment vehicle that aims to have a positive effect on climate change. “We only put people’s money into companies that have a product or solution that’s making a difference in climate change.”
There’s no shortage of opportunities out there, he says. “Carbon is embedded into every aspect of our lives, from the moment we wake up in the morning: it’s in the food we eat, the clothes we wear, the homes we live in, the transport we take to work – it’s everywhere.”
Companies are coming up with innovative ways to remove carbon dioxide from the system in every instance. Clim8 focuses on six areas: green energy and climate technology, clean mobility and sustainable food, as well as water systems, circular economy, and green energy.
That’s quite a broad sweep – how do they choose which businesses to invest in? “We have an in-house team of sustainability specialists,” explains Grierson. These select both specific companies (so-called ‘direct stock picks’) and third-party equity funds focused on climate and sustainability. These equity investments are balanced alongside fixed income assets, such as green bonds.
Asked for a few examples of companies that have previously featured in the portfolio, Grierson picks out leading wind turbine manufacturer Vestas, along with Ørsted, the Danish energy company that has successfully pulled off an almost total transitionRenewables are replacing fossil fuels. “Then there’s Schneider Electric, which produces a lot of products crucial to the energy transition, like electric vehicle charge points, software for energy efficiency technologies and so on. And Tesla, of course.”
With solar and wind power now among the cheapest sources of electricity on the planet, it’s no surprise that renewables have loomed large in Clim8’s portfolio. But it’s far from being just about energy. Agriculture “may not be as sexy, but it’s a really interesting space”, responsible for around 20 per cent of global emissions. Clim8 has been exposed to meat alternatives such as Beyond Meat and Impossible Foods.
It invests in over 600 companies, ranging from small startups to large corporations. Like any responsible investment fund, it’s a diverse portfolio, cushioning investors’ savings against the inevitable volatility of any particular stock or sector. Clim8 currently offers ISAs as well as General Investment Accounts. In the future, Clim8 will launch a Junior ISA (self-invested personal retirement) and a SIPP.
Unusually for a fintech firm, about one-third of its customers are women, “and we’d like to get to 50 per cent, or even higher”, says Grierson. Clim8 has innovative ways to spread the word. It’s been blessed with some high-profile advertising slots on the UK’s Channel 4, which has invested £2m in the form of ‘media for equity’. That translates to exposure in primetime programmes such as Grand Designs and Gogglebox – reaching potential customers beyond the usual suspects.
Can an individual’s little savings pot really make a difference to the climate crisis, though? Grierson’s answer is an emphatic yes. He points to the findings of the Make My Money Matter campaignRichard Curtis (film director and screenwriter) established the Climate-positive Investments Initiative to show that shifting your savings to climate positive investments can have a much greater impact than taking up air travel.
“If people move their money at scale”, he says, huge change can happen. “You can have a real impact – and you can feel a lot better about your savings, and what they’re enabling to happen.”
Your capital is at high risk when you invest. Tax treatment is dependent on individual circumstances and subject to change.
Main image: Peter Conlan