Sustainability: one of the hottest topic at last Lantern Fund Forum
The Lantern Fund Forum was held in Lugano on November 20th and 21st. Presentations and talks were held, with John Mauldin as the keynote speaker. In the next few days, Marketplus will report about the various presentations, which can be found here. https://finlantern.com/fundforum/slide-presentations-lff-2017/
Sustainability was one of the most chosen topics in the 2017 edition.
Sustainable investing was the message by BNP Paribas: renewable finances, green bonds and carbon finance are among the means to achieve this. Globally, regulators have been focusing more on sustainability. The London Stock Exchange, for one, asks for a mandatory carbon reporting for listed companies, while Ontario, Canada, pension funds are to disclose how ESG factors are incorporated. ESG reporting is viewed as fundamental and the starting points are Multilevel scoring with drills down to the companies, carbon footprint, controversy exposure and business involement screening.
A more specific approach was presented by BNP Paribas within the Parvest Climate Impact Fund. The presentation started to list the global threats such as how the climate change will impact life in little more than 10 years. Assets include recycling, giving the example of aluminium and the energy involved in making a container in that material: the same process requests 40 times less energy if the container is recycled. Moreover, a wind farm with the same surface as India, located in North Atlantic, could solve the electricity problems for the whole planet. Recycling and sparing water, insulating buildings are other efficient solutions. Financial investments matter, concludes the presentation.
Asia Plantation Capital, a ISO Carbon Neutral Company managing plantations to provide commercial products such as Oud Oil, world most expensive essential oil in the world. Sells for over USD 30’000 per kilo. Staff includes more than 2000 people in rural communities and operates in more than 18 countries. Winner of the Best Forestry Asset Manager award for cfi.co for the last three years. Its strategy is vertical and goes from the plantation to the distillery, processing and retail. APC managed over 7 millions trees and follows Forestry Stewardship Council (FSC) guidelines. Their 3 P’s core value: Population + Planet + Profit work along side helping local communities to evolve, to save the planet and providing a much appreciated yield. Clients purchase trees, entrust Asia Plantation Capital with their management, the distillation of the heartwood and the sale of the oud oil (resulting from the distillation). The group has operational projects at various stages in Cambodia, China, India, Kenya, Laos, Malaysia, Sri Lanka, Thailand, U.S. and Vietnam. Guyve KALANTARY, APC Group, Geneva.
Sustainable and responsible investment, engagement, ethics: LionTrust concentrated on these themes, showing how 45% of investors wants more than just making money and there is a 10% growth. Long term trends include technology and disease treatment, both have seen an important growth in the last 30 years, while road safety has increased with a 75% reduction of fatalities. Banks which follow ESG protocols show a performance up to 938% better. Healthier food is among the examples of sustainability. Equity funds, therefore, consider these parameters, investing in companies that follow these rules and avoiding, for example, fossil fuels.
RobecomSam, a certified carbon neutral company, gave its speech on Smart energy and e-mobility. Several big revolutionary changes are happening at the same time, such as connected cars or autonomous driving technologies improving more and more. By 2030, according to RobecoSam, most cars will have some sort of electrification, thus decreasing Co2 levels. The 3-year total cost for ownership will cross levels in 2021 in Europe, when electric cars will become less expensive than combustion ones to buy and maintain. Manufacturing will become simpler and less expensive, while the economy of scale will keep to drive down costs. In the meantime, autonomous driving will also help reduce the number of cars.