Build sustainability into your investment strategy to make money while saving the planet.
At the center of the Japanese concept of Ikigai is a reason to get up in the morning, it denotes that we could achieve a state of happiness by leading a purposeful life as individuals and investors. How do we do this? We start by dedicating a portion of our time, knowledge and wealth to a greater cause. Today’s greatest cause is climate change and combined with blockchain technology the opportunities to build a green portfolio with passive income are endless.
At this point in time if you are an investor and you are not scrutinising your portfolio with climate change in mind then you are slowly moving to the back of the queue. With some of the world’s biggest companies and investors now fully committed to the cause, the opportunities keep getting greater. Jeff Bezos, Elon Musk, the Stripe brothers and other well known figures have announced funding, grants and investments in a diverse range of climate change initiatives. Be at the forefront of the shift towards the creation of long term financial incentives associated with the creation of low-carbon assets and technology that supports a reduction in greenhouse gas emissions.
You only have to take a quick snapshot of the numbers to see that the environment is a key investment pillar now and for the future. (Numbers)
- 95% increase in global power capacity for renewables through 2025
- Early stage venture funding for climate tech companies $16.1 billion (PWC, 2019)
- Global sustainable investment now tops $30 trillion — up 68 percent since 2014 and tenfold since 2004
There is strong momentum for projects and companies that support the UN vision for an environmentally friendly future. More and more businesses are profiting from going green. Organic and sustainable products were once seen as the more expensive, higher valued items. Well, yes they are but this doesn’t mean the cost of production/manufacturing has to be higher. In fact, it is oftentimes cheaper using upcycled and recycled raw materials, bringing a higher margin of ROI every-time. This is only the case in the instance of some products. Now consider the cooperation vying to become more eco-friendly, carbon neutral and double down on their corporate sustainability efforts. Yes, I said double down because this is what every company in the world is trying to do right now.
Follow the money
Companies are not only seeing the ESG benefits of sustainable practices, they are also incrementally improving their bottom lines, lowering their costs and seeing a greater return on assets. Companies that invest in CSR are winning.
It is now recognised that companies who invest in CSR and projects that help towards environmental causes can have a positive impact on the perception of their brand. Research has shown that it may even help to when positioning brands ahead of competitors “acts of corporate social responsibility can strengthen consumer evaluations of the functional performance of company products”(Doing Well by Doing Good 2015).
In E.Freya Williams’ book we meet some of the world’s Green Giants, the gigantic companies turning sustainable practices and marketing into billion-dollar businesses. From chipotle to IKEA, these brands see the value of corporate social responsibility and are capitalising on it today.
Just last month Stripe announced that it is spending $2.75 million to support six early-stage carbon removal projects. The future of climate change is growing and the opportunities are widening. With increased funding comes increased innovation.
Although all of these climate focused corporate initiatives are positive steps towards reversing some of the negative impacts of climate change we must red flag some of the greener agendas here and through the use of blockchain technology, projects like Regen Network we can start to distinguish companies and individuals who are actually investing in climate action from those who are simply joining in the conversation to gain publicity. How does Regen Network help you to get paid for your impact investments while also providing the basic infrastructure that allows everybody to access a trusted source of ecological data? See here:
Blockchain brings transparency
Investors and individuals expect more transparency when it comes to their investments today and this is especially true when it comes to the promotion of “green friendly” initiatives. There are negative perceptions of the banking industry that blockchain technology and decentralised finance is addressing as we speak. In general, people are skeptical about the private sector’s contribution to sustainable development (Sustainability Report 2020)
Blockchain technology alleviates the problems ESG investors are having with data regarding their green investments.
Above, we mentioned just a handful of the companies profiting from CSR practices but the next development in this sphere of sustainability is a focus on the green practices and where exactly is all of this green activity taking place and having a real impact. What projects, farmers, landscapes, environments, food systems and people are benefiting from these sustainable practices that are so eloquently promoted across these brands’ communication channels?
“All companies, regardless of their sector, should expect to be questioned on how they are managing and responding to these risks and opportunities. Boards and companies should also be prepared to face investor scrutiny on how they approach and report on their exposure to ESG-related issues” (Harvard Institutional Investment Survey 2020)
How is ESG and blockchain technology going to be a money making exercise? ESG is no longer a government donation, a charitable cause, a tax or a cost to the taxpayer. You can make money by being carbon friendly. The rewards exist and are waiting to be discovered. Operating on distributed ledger technology (DLT) blockchain allows for the faster investments, easy execution og smart contracts, services as a transparent system of payments for peer-to-peer investment transfers and opens your investments up to a world of new opportunities.
Steps you can take towards impact investing
Research and Identity projects of interest — Reach out to Sonic.Capital to learn about the future of impact investing.
Discover how to measure the impact of your investment — Invest in Sphere to receive rewards for your contribution to ESG focused blockchain ecosystems.
Stay on top of the latest ESG trends — Tokenization of environmental assets and easy access to Staking Rewards are just two of the trends to keep an eye on.
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