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Earth Day and Investing for Sustainability

April 21, 2021
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As an advocate for the great outdoors and someone that loves to explore nature’s wonders, I want to celebrate the 52nd Anniversary of Earth Day by highlighting a few things I’ve recently learned and personally witnessed.

Sustainability is the capacity to endure in a relatively ongoing way across various domains of life. In the 21st century, it generally refers to the capability for Earth's biosphere and human civilization to co-exist.  In Bill Gates’s most recent book, “HOW TO AVOID A CLIMATE DISASTER,” he highlights ways to change the future outcome for our children and grandchildren.  There is no doubt that greenhouse gases are rising and having a very negative impact on human lives.

Our daughter Kelly is studying Finance and Environmental Sustainability. I wonder where she got that from😊. Kelly has taught us so much in such a short amount of time, opening our eyes to all of the new ways we can make subtle changes in our lives that will have enormous benefits on the future of humankind: changing your driving habits (which COVID definitely helped with), reducing the amount of paper in your life (request your financial statements online), and eating less meat and dairy products (66% of all crop calories goes to feeding cows, and they in-turn account for 28% of all methane emissions).  Another surprising fact is that humans consume less than 10% of the corn produced in the United States. Instead, we are growing corn to fatten up cows and to produce biofuels. Conventional ranching and farming practices degrade our soils/grasslands, but regenerative farming is a great way to raise cows sustainably to stop the depletion of our soils and reduce global warming. If you have access to Netflix, I recommend that you watch Kiss the Ground to learn more: https://kisstheground.com/.

 

Another sign of climate change is the fact that our glaciers are receding. This photo shows how far the Athabaska Glacier in British Columbia has receded since 1935.  We hiked close to a mile from the parking lot, which used to be an icefield, before reaching the glacier.  This is just one example of the things I’ve witnessed over the years that we will lose if we don’t all start doing even something small to save this lovely earth for the futures of our children and grandchildren.

So as individuals, there are small things we can do to help, but corporations have the power to do so much more! As sustainability becomes more important to our society, there will be pressures to incorporate business practices that are in Earth’s best interest.

“Sustainable investing is not a niche or peripheral strategy – it’s about recognizing that the companies addressing humanity’s biggest challenges are often those that are well-positioned to grow.”  Brian Deese, Global Head of Sustainable Investing at BlackRock

The graph below stresses the point that just because a company is practicing sustainability does not mean their company won’t perform as well as others.  BlackRock has researched companies practicing high levels of Environmental, Social, and Governance (ESG) and has found them to be performing as well if not better than companies not as focused on ESG.

As we celebrate Earth Day, investors should recognize both the risks and opportunities of the transition to a low carbon economy. Broader sustainability and social issues can, and often do, impact portfolios.  We at Stonegate Financial have been researching ESG for several years now and we have been putting more emphasis on this style of investing.  Additionally, we have built ESG portfolios that are available to our clients that have an interest in more closely aligning their investments with personal values.  Please don’t hesitate to reach out to us if you have an interest in learning more about ESG investing.

Any opinions are those of Terence Wiles and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.