Page 4 - DIY Investor Magazine | Issue 31

A MINUTE TO MIDNIGHT: THE POWER OF INVESTING In August the UN IPCC group of scientists published a report that signalled a ‘code red for humanity’; it concluded that ‘human activity is changing the climate in unprecedented and sometimes irreversible ways’. Coming just three months before the key COP26 climate summit in Glasgow, the report ensured that the need to counter climate change was front and centre as never before. Just as delegates were heading for their chip-fat fuelled flights home to turn worthy words into deeds, India and China were accused of betraying the most climate-vulnerable countries in the world by insisting that a commitment to ‘phase out’ coal became one to ‘phase down’ coal. Far more than semantic, this is something that could have a profound effect on the global community’s ability to prevent a climate catastrophe. The fact that the recent ‘Conference of the Parties’ was the twenty sixth tells a tale of foot-dragging that has taken in the Kyoto Protocol in 1997 and the Paris Agreement in 2015, but delivered precious little in terms of definitive action to reduce the use of fossil fuels. However clear the scientific imperative to reduce emissions, the difficulty of reconciling the aspirations of countries at different stages of development and the interests of big business means that many tough decisions remain to be made. There is a parallel with one of the most common things we hear at DIY Investor – ‘that’s exactly me – I know I should be doing more for (the future/my children/retirement) but I just haven’t got A Round Tuit’. If the 55 countries that ratified the Paris Agreement fail to deliver, the world may pass inflection points beyond which change will be irreversible; whilst possibly not existential, those that fail to make adequate provision could see the standard of living they aspire to in later life increasingly difficult to achieve. You can only start from where you are - a Chinese proverb says: ‘The best time to plant a tree was 20 years ago. The second best time is today’; whether tackling climate change or planning a financial future, doing nothing is rarely better than doing something. The short, sharp shock delivered by the pandemic saw people opening accounts with brokers and DIY investment platforms as never before and we believe that good education and content are key to long term behavioural change; pressure on the state pension and later life care provide plenty of incentive. Investors are now much more attuned to the concept of ‘doing well whilst doing good’ and are far more demanding of the environmental, social and governance credentials of the companies and managers with whom they entrust their money; ESG is now woven into the fabric of asset management. Where companies are being allowed to continue with high-polluting activities whilst they transition and develop alternatives, legal restrictions are being imposed to ensure that ‘greenwashed’ business as usual is not an option; an example is the court ruling that requires Royal Dutch Shell to reduce CO2 emissions by 45% by the end of 2030. The recent multi media campaign by abrdn shows just how entwined the interests of the investor and the future of the planet are becoming; entitled ‘The Power of Investment’ it shows ‘how positive investments can create a better future for individuals, companies, countries, the climate and ultimately the world, taking us beyond pure financial return, to social return’. Individuals improving their future whilst improving the future for others and saving the planet – vad tycker du om det Greta? MAKE SURE YOU DON’T MISS AN ISSUE; CLICK HERE TO RECEIVE DIY INVESTOR MAGAZINE TO YOUR INBOX DIY Investor Magazine · Nov 2021 4