Sustainable Investing
By Yimeng Wang, Fernando Ortiz, Dave Kim and Everett Brun
Climate Change - Problem and Opportunity
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Climate Change is the problem of our generation
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Climate change is incredibly expensive
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Global temperatures have risen 1 degree celsius
Projected to reach 2-4 degrees celsius by 2100
Current preventative measures fall very short
Natural disasters are increasing in frequency and intensity
$23 trillion in global economic losses per year - unavoidable
Current Shift towards Sustainability
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Government - Corporations - Consumers
United States efforts are still very insufficient
These problems and circumstances provide unique
investment opportunities
1 - Renewable Energy ETFs - ICLN QCLN
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Renewable energy ETFs are involved with
the alternative energy sector
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Why invest in renewable energy ETFs?
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Renewable energy market outlook
Lower carbon footprint
Portfolio diversification
iShares Global Clean Energy Index ETF
(ICLN)
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Solar, wind, hydroelectric, and geothermal
Tracks 100 related clean-energy companies
First Trust NASDAQ Clean Edge Green
Energy Index ETF (QCLN)
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Tracks the performance of clean energy
companies publicly traded in the U.S.
2 - Carbon Credits (KRBN)
What is Carbon Credits?
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Carbon Credit is a permit that motivate organization to produce less carbon emissions. Each companies
are assigned with certain amount of Carbon and they can buy or sell their unused carbon emissions
allowance.
KraneShares Global Carbon ETF (KRBN)
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Investment on future contact of Carbon credit.
As Carbon emission regulation become worldwide, it increase the price of Carbon credit.
3 - Short or avoid climate vulnerable industries
1. Insurance
The report states that last year just under a third of the $116 billion in worldwide losses from weather-related disasters were covered by insurance,
according to data from the reinsurer Swiss Re.
2. Agriculture
While higher temperatures can help crops grow faster, for many crops, faster growth means less time for seeds to mature, reducing global yields.
Food prices could rise as much as 84 percent by 2050 as production declines, according to a United Nations report.
3.The energy
the risks posed by global warming are mostly about government's’ effort to slow it. Regulations on fossil fuels are likely to increase, threatening the
lucrative oil, gas and coal industries.
4. Skiing
In the United States, the $12.2 billion ski and snowmobile industry has already experienced a $1 billion loss brought on by changing weather
patterns.
5. Commercial fishing
As sea levels rise, that would be a harsh loss for these fisheries, which are worth somewhere between $1.5 and $14 billion a year, according to an
analysis from the Natural Resources Defense Council.
Conclusion
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Climate change is happening
and will be one of the most
influential macroeconomic
trends over the next century.
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There will be many new
investment opportunities as
our economy will be forced to
shift from indulgent, hyper
consumerism to more a
preservative and sustainable
driving forces.