Highlights from 2023

Entering the next phase of green growth

Despite financial volatility, the green economy continues to expand and diversify steadily, and is becoming an important source of economic growth, jobs and energy supply. It has also emerged as a critical geopolitical consideration. The FTSE Russell 2023 Report, provides a holistic picture of the green trends in the global equity market, green equity performance, and the geopolitics of green.

According to this report, as a stand alone sector, the green economy is now the fourth largest sector in global equity markets, with a combined market capitalisation of US$6.5 trillion. It recently surpassed Banks and is now materially bigger than Energy (including Oil & Gas) and the Retail sectors.

Green revenues for listed companies are on track to exceed US$5 trillion by 2025, which is double the size since the conclusion of the Paris Agreement in 2015.  The market capitalisation of the green economy is approaching 10% of the equity market.  Acknowledging to shift the global economy onto a 1.5°C trajectory, green growth will have to further substantially accelerate approximating 20% of global equity markets by 2030.

FTSE Russell 2023 Report

2023 Ethical Advisers Co-op Annual Report

We are proud to be a part of the recent launch of the Ethical Advisers’ Co-operative’s fourth Annual Report, which showcases’ the important efforts the Co-op has made throughout 2023. The report highlights the engagement activities, ethical fund ratings and member events that are lifting the finance industry and spreading the word to more investors.

Access the Annual Report

Battery storage – the backbone of a renewable energy future

Renewable energy and electrification have the potential to reduce energy-related CO2 emissions by 75%, which is necessary to keep global temperature increases “well below” 2°C.  Can the infrastructure cope?

Wind and solar energy sources are variable and decentralised, which poses significant challenges for the existing electricity network that was designed around stable and centralised power generation sources.

What makes a grid smart?
Some of the solutions to these challenges to the grid can be found in the Funds we invest in, including smart grid technology, battery storage solutions, electric vehicle (EV) charging, and semiconductor technology.

A smart grid for example is fitted with information and communications technologies (ICTs) to enable a real-time, two-way communication between suppliers and consumers. This creates a more dynamic interaction in energy flow, which helps to deliver electricity more efficiently and sustainably. Smart grid technologies like semiconductor technology enables wireless communication and the Internet of Things (IoT).  The connectivity they provide in smart meters, EV chargers, and solar panels is a key enabler of communication with the grid.

The role of storage
The latest Quarterly Energy Dynamics report from the AEMO (Australian Energy Market Operator) reveals that batteries took a 50% share in the provision of key services to the grid, up from 38% a year earlier.

As the grid decarbonises and becomes more complicated, struggling to meet the demand for electricity, storage is required to balance this demand and supply and maintain the integrity of the grid. The energy transition will require a mix of technologies, as there is no single perfect form of energy storage.  Some deep storage (providing supply during prolonged system stress, supply disruption or seasonal variability) is required for ‘dark and still’ periods when solar and wind output is less than is demanded for an extended period.

According to AEMO modelling, building enough wind and solar to meet the energy needs is likely to be more efficient, on estimated technology costs, than building less wind and solar but more seasonal storage. The task now is to integrate these solutions into the existing infrastructure to ensure a smooth transition to renewable energy and electrification.

In our next newsletter we will look at these ‘deep’ storage solutions – Hype vs reality.

source: Pengana WHEB, Betashares Insights, AEMO

Now in its 9th year, each year, Ethical Investment Week highlights the objectives and benefits of ethical investments and advice.

Co-ordinated by the Ethical Adviser’s Co-op, a group of leading expert ethical advisers, the week’s purpose is to connect investors with advisers who are specialists in the ethical space – so you can ensure your investments are best suited to your beliefs, attitudes and ethics.

2022’s theme is ‘You & Your Ethical Adviser’​

As ethical investment becomes increasingly mainstream, instances of what financial market regulators have called “misleading marketing, poor product design and other types of ‘green-washing’” are rising. For the discerning investor, this means finding authentic ethical investments can prove a challenge.

Visit Ethical Advisers’ Co-op to find out what is happening during EIW. (Events will continue to be added to the page over the coming weeks).

The Green Dream is a podcast about ethical investing for positive impact and a better future! Host James Baird interviews fund managers, advisers and a range of leaders in sustainability about topical ESG issues. James is a Financial Planner with over 20 years in the industry, and is a Director of JustInvest Financial Planning.

What are cave dwelling Troglodytes? Is it a coincidence that places of cultural significance often seem to be in resource rich areas, for example the planned Yeelirrie Uranium mine? Why should your Financial Adviser be aware of these issues? Join us for this special Ethical Investment Week 2022 interview with Kado Muir.

It’s a year since my last podcast discussion with Kado, and a lot has happened in that time. In response to the Juukan Gorge incident, the First Nations Heritage Protection Alliance was formed. In late 2021, Kado helped produce a Toolkit for Investors, designed to contribute to the protection of First Nations cultural heritage which is unique to this country and part of the common legacy of all Australians. Also, since Juukan Gorge, progress has been made in other areas – such as the Taskforce on Nature Based Financial Disclosure. In short, there’s a lot happening which will assist both cultural heritage and biodiversity. Kado and I discuss this progress, along with exploring what companies can do to effectively engage with Aboriginal culture.

I hope you enjoy this discussion with Kado Muir.

Beyond Juukan Gorge – Uranium, Troglodyte Extinction & Cultural Cringe, with Kado Muir

Ethical Investment Advisers are founding members of the Ethical Advisers’ Co-operative, a nation wide membership of ethical Financial Advisers who help everyday Australians invest and make financial decisions to match their ethical values with financial investments.

The Ethical Advisers’ Co-operative recently published their inaugural Annual Report, which showcases the important efforts the Co-op has made throughout 2021, highlighting the engagement activities, ethical fund ratings and member events that are lifting the finance industry and spreading the word to more investors.

EIA Adviser Karen McLeod speaks to Industry Moves

What has been the biggest change you’ve seen in the industry during your time?

It’s so refreshing that there is now a greater understanding by the financial services sector around responsible and ethical investing. Previously when I started specialising in this area it was seen as a niche, but these days it’s a common topic of conversation amongst fund managers, advisers and clients. Which is great. Clients are finally able to invest their money in a more responsible way, without having to sacrifice their values or returns.

Read the full interview

https://industrymoves.com/q-and-a/making-ethical-specialisation-work-a-planner-s-journey-to-live-their-values

Ethical Advisers, Karen McLeod and Luke Price, feature in a Financial Standard article, written by Elizabeth McArthur.

Read the article: Debatable Ethics