Developments and commentary in and around the ESG investment space.
Amsterdam-based corporate services group Intertrust has unveiled a new logo and partnership with San Francisco-founded microfinance non-profit Kiva - a firm that helps crowd-source capital to underserved communities to help improve lives.
“Our partnership with Kiva will put our employees in the driver’s seat and make corporate philanthropy a very personal experience,” said Stephanie Miller, CEO of Intertrust, which provides administrative services to corporate, fund, capital markets and private wealth clients.
The group said a rebrand marked "a new era for the company." It also reflects recent acquisitions shaping the firm's direction, including last year's purchase of Viteos. Intertrust acquired the US-based technology provider to hedge funds to help speed up tech-enabled corporate and fund solutions.
Ultra-high net worth invetors are sticking with an ESG investment approach. According to a Stonehage Fleming survey conducted between May and July, 83 per cent of UHNW clients have not altered their approach since COVID-19 pressures. The poll of 183 contributors from families and advisors across all jurisdictions also found that the majority (55 per cent) are applying ESG or sustainable principles. Among those not already considering ESG, 24 per cent said that the pandemic will change their investment approach.
The Covid pandemic's catalysing effect on the energy industry is the thrust of Stéphane Monier's latest brief. Lombard Odier's chief investment officer points to last week's International Energy Agency (IEA) figures forecasting a decline of at least 5 per cent in demand for energy in 2020 compared with 2019, with the greatest falls expected in demand for oil and coal. In contrast, demand for renewable energy is set to rise by almost 1 per cent on the same basis. The agency estimates that the pandemic-related economic slowdown has also cut carbon emissions by almost 7 per cent. Most notably, it expects investments to fall 18 per cent, mostly affecting fossil fuels.
Monier also looks at how a Democrat victory in November would shift US energy policy. "Democratic presidential candidate Joe Biden has proposed a $2 trillion package of measures over four years that would promote cleaner energy, transportation and construction in the US. The plan includes a pledge to cut carbon emissions from electrical power to zero within 15 years. Mr Biden argues that the energy transition is an opportunity for more jobs, and a chance to restore the US’s commitments to reducing carbon emissions under the Paris Agreement. Under current policy, all US commitments under the Paris Agreement formally expire on 4 November, one day after the election."
He also outlines how oil companies are shifting in favour of cleaner options. BP has committed to becoming a net-zero emitter at the latest by 2050 with other oil majors promising to halve their carbon output by then or sooner. But he adds, these multi-decade commitments are being met with market scepticism because energy companies continue to underperform the wider equity market.
"The companies’ three-decade targets would require significant carbon offsets in the form of natural carbon sinks including reforestation, or carbon capture and storage technologies that are not yet working at scale. Secondly, existing fossil-fuel businesses may get more costly due to ‘stranded assets’ locked into obsolete infrastructure and mispriced carbon," he cautions.