Page 4 - DIY Investor Magazine - Issue 28

NEVER TURN YOUR BACK ON MOTHER EARTH In a particularly English protest, nine Extinction Rebellion ‘activists’ recently marked Earth Day by ‘carefully’ smashing nine windows at HSBC’s Canary Wharf headquarters; their tactics were benign, but the ladies’ ire was directed at ‘commercial banks knowingly investing billions in industries that will deprive future generations of an inhabitable planet’. Not a muck-spreader in sight, and who watched 16 year-old anti-HS2 protestor Rory Hooper being carried out from a tunnel under Euston Station and felt slightly nostalgic for the golden days of protest when his old man Swampy was in his pomp. But before our Gallic cousins do anything in our general direction to berate our protesting prowess, things are getting done – lost money to Woodford, or VW/Mercedes? Kapow – bewigged super-heroes Leigh Day are on the case; government ‘economical’ with the truth? Good Law Project is there. If Covid-19 heightened our sense of mortality, it is the issue of climate change that has gathered momentum like no other; if we could prop up a bar, Greta Thunberg’s ‘A Year to Change the World’ and Netflix’ ‘Seaspiracy’ would be hot topics. Boris jumped on the bandwagon, insisting that delegates to ‘his’ COP26 gathering should travel only on planes powered by mole’s breath; by then announcing his intention to slash emissions by 78% in 2035 cf 1990 he set a very high bar indeed, and one that will be subject to forensic scrutiny. The following day Kwasi Kwarteng said Heathrow expansion would not be impacted because it was ‘sustainable’; unfortunately, the fuel that would support such a claim has not yet been developed – it’s like saying Gavin Williamson would get a double first if he had a better brain. Elsewhere, government decisions that conflict with climate policy such as Woodhouse Colliery and Leeds Bradford Airport expansion are robustly challenged; movements such as Flygskam seek to change behavior. Now investors have the opportunity to shape the post-pandemic world as we ‘build back better’ and set a course to net zero carbon emissions in 2050. Socially responsible investing began in the 60s as a counter strategy to Milton Friedman’s shareholder value theory; variously attributed to the Quakers or the anti-Apartheid movement, today it underpins ESG investing which will be instrumental in safeguarding the planet. Whereas to prioritise sustainability, responsibility and social- impact was once to compromise investment return, that is patently no longer the case; the challenge is to identify companies that are passionately committed to delivering products and services that will materially impact on the future in a positive way. Judicious choice should prove self-fulfilling as the most adroit and inventive companies will continue to attract investment, enabling them to reward investors with income and capital growth. Quiet it may be, but there is every reason to believe that this movement is here to stay; brokers and investment platforms saw record levels of business during lockdown, particularly from younger investors, with ESG a key driver. Inevitably it will take time to agree how companies’ ESG credentials can be measured and compared, but it is significant that asset managers are collaborating to agree industry-wide solutions. This ‘Dear Chairperson’ letter from Schroders’ Chief Exec, Peter Harrison, is demanding in questioning how FTSE 350 companies intend to deliver on net zero, but also supportive in that it implies its fast-growing sustainable funds will support those that pass muster. With hindsight perhaps the winners and losers of the pandemic were predictable; the challenge is to identify the winners that will help us avoid the apocalyptic outcomes that many fear, and spare Mr Kwarteng’s blushes to boot. ask@diyinvestor.net MAKE SURE YOU DON’T MISS AN ISSUE; CLICK HERE TO RECEIVE DIY INVESTOR MAGAZINE TO YOUR INBOX DIY Investor Magazine | Apr 2021 4