What to know Sustainable investing allows you to implement your core values while increasing your profits. ETFs, Index Funds, and Roboadvisors are a good place to start.
Four main approaches
- Exclusionary screening - avoiding investment in companies or sectors that do not align with investor values.
- ESG integration - rating companies based on their implementation of Environmental, Social and Governance principles.
- Thematic investing - focusing investments according to interest in specific themes, for example clean energy.
- Impact investing - investing in companies or funds with the intention of generating impact alongside a financial return.
Bottom line -- Sustainable investing not only offers you a way to invest according to your values, but it also provides good financial performance and potential risk mitigation.
Dig deeper —> 5 min
Bloomberg Businessweek published a report this week outlining the problem with ESG investing. It’s a lengthy analysis with lots of facts and figures, so I thought it would be worthwhile to summarize its major findings.
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Meet MSCI: the ESG matchmaker
MSCI is the world’s premier ratings company for environmental, social and governance (ESG) designations. It’s the ESG equivalent of Moody’s for insurance ratings.
MSCI has become the de-facto standard for smacking “sustainable” on any investment fund. The impact of sustainable investing has suffered as a result.
What’s the problem with MSCI ESG ratings?
According to Bloomberg’s report, MSCI ratings don’t accurately measure the impact of a company on the Earth. Rather, their ratings measure the impact of the Earth on a company.
It’s a powerful distinction that has damning effects on the real-world impact of ESG ratings. And it’s a method that MSCI openly boasts as a logical indication for relevant stakeholders.… Read the rest
I was fortunate to sit down with Upstream’s CEO, Matt Prindiville. During our conversation, we covered sustainability versus climate change, the power of the public and private sectors, ESG, circular economies, rational climate optimism, and more!
Upstream Solutions is a nonprofit organization founded in 2003 with a mission to not only reduce but remove single-use plastic from the world. Their organization finds, makes, and celebrates practical solutions that help people, businesses, and communities shift from single-use to reuse. Over the past few decades, they’ve worked with countless orgs committed to a more sustainable future.
When asked about the future implications of climate change, Prindiville said, "I'm an optimist. What scientists are saying is, of course, very scary. But when I think about the change I’ve seen in my career, it’s incredible how far we’ve come. Ten years from now, you'll see environmental and social responsibility be the norm worldwide."
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Busy? Try the speed read.
The scoop: Lululemon is a cultural staple in the world of athleisure. Sustainability is not a core aspect of their brand strategy.
Some talking points:
- Lululemon uses polybags (plastic) for finished products sent to distribution centers.
- Most of their materials are not eco-friendly. They are working on that.
- Four of five global distribution centers are zero-waste.
- Lululemon is pretty transparent about their carbon footprint and accountability.
Bottom line: They are taking some steps toward sustainability, but I have to hold Lululemon to a higher standard than that. They have an opportunity to lead the athleisure industry, and they don't even come close.
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This week, we sat down with Closed Loop Partners CEO Ron Gonen. Closed Loop Partners is a New York based investment firm comprised of venture capital, growth equity, private equity and project finance as well as an innovation center focused on building the circular economy.
During our conversation, we covered pressing topics like social entrepreneurship, sustainable investing, and climate optimism.
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Busy? Try the speed read.
The scoop: Is Beyond Meat sustainable? The plant-based protein maker has turned veganism mainstream. But they need to be more transparent.
Some talking points:
- Beyond Meat packaging needs work. Their flagship product (Beyond Burger) is not compostable.
- Beyond Meat uses 99% less water, 93% less land, 90% fewer greenhouse gases, and 46% less energy than a traditional beef burger.
- Pea protein is a sustainable protein choice, but they should prioritize sustainable farming > organic farming.
- A report from 2018 criticized Beyond Meat's transparency around sustainability reporting, giving them a 0%.
Bottom line: Beyond Meat needs to revisit its supply chain, but they are on the upward trajectory for both profitability and sustainability. Quality company that just needs to keep improving. Beyond Meat is on its way to being sustainable.
Dig deeper → 6 min