Conscious Capitalism In The News: Invest in water – win the long game, How ESG can protect your portfolio, Bud rebrands to Green Beer, A warning to all businesses: Be sustainable or risk your bottom line, and more…
Water-related ETFs are in an advantageous position due to some pretty serious situations.
For example, PowerShares Water Resources ETF (PHO), First Trust ISE Water Index Fund (FIW) and Tortoise Water Fund (TBLU) hold shares in U.S. water utilities, such as American Water Works, infrastructure companies like Aegion Corporation and technology companies like Xylem, a supplier of energy-saving pumps and controls for hot water systems.
All 3 water-related ETFs are up around 15% since last year.
…there’s really not a much more essential asset than water…people are really starting to realize we have a global water problem on our hands - Matt Weglarz, Portfolio Manager at Tortoise Index Solutions.
Global water demand is expected to grow by more than 50 percent over the next 30 years. In 2015, the EPA estimated that we need $472.6 billion to fix America’s public water infrastructure system alone.
Flint, Michigan, is still waiting…
There is opportunity for investors to capitalize on clean water infrastructure and technology over the long term because of the need to upgrade and maintain water systems across the U.S.
The Swell Clean Water portfolio is a managed portfolio of water-focused companies which is up 11% over the past 12 months.
Whether it’s through news about water scarcity or news about the demand for water or need around improving our water infrastructure, those are all reasons that you would want to be in a clean water portfolio of companies that are addressing any one of those areas. - Dave Fanger, CEO of Swell Investing.
Anheuser-Busch has officially promised that the $400 million worth of electricity it uses each year will be 100% renewable by 2025. It has also vowed to follow through on sustainability goals which include plans to:
- Repackage beverages in majority-recycled content
- Improve water efficiency
- Work directly with farmers
- Reduce carbon emissions by 25%.
In celebration of its new vision, starting on Earth Day, it has labeled all of its cans and bottles of Bud with a new “100% Renewable Electricity” symbol to make consumers aware of its new goals.
This labeling strategy builds awareness, sparks conversation about what exactly it means to be sourcing clean energy, and offers a gateway to the bigger discussion that consumers—particularly millennials—increasingly expect. The challenge is for the company to maintain transparency everywhere, even with more challenging questions. - Christen Graham, Social Impact Executive
Anheuser-Busch CEO Carlos Brito has proclaimed that “Budweiser is going to be carrying the flag for renewable energy around the world.” However, when a company does not follow through with its corporate social responsibility promises, it amounts to greenwashing.
Will Bud follows through with its promises? In fact, it may not have a choice.
Whether beer brewers rebrand as green and fly “the flag for renewable energy or not,” they are going to have to not only rethink their sustainability strategies, but actually carry them out in order to survive. Issues of water scarcity and water quality currently pose particularly serious threats to the survival of food and beverage industries around the world.
This is the silent crisis that’s sneaking up on all industries but will hit this one particularly hard. - James Reeves, Corporate Social Sustainability Strategist
Much like the shift we went through when turning our backs on smoking and littering, we’re clearly in the middle of a massive cultural shift when it comes to sustainability. Just as we find it abhorrent to throw litter out of a car window, it is now becoming unacceptable to buy products from companies deemed to be mistreating the planet.
What this means for companies is that if they don’t start integrating sustainability and corporate social responsibility into their business model, products, and brand, they are definitely going to feel it in their bottom line.
- 45% of Americans want to be seen as someone who buys eco-friendly products.
- Over 50% of Americans don’t believe a product is green if they don’t believe the company is green.
- Over 50% of Americans can think of a time when they’ve either purchased or not purchased a product because of the environmental reputation of the manufacturer.
When it comes to Millennials, these trends are even stronger:
- 90% say they’ll buy from a brand if they trust that company’s social and environmental practices.
- 95% say they’ll recommend the products to their friends and family if they trust a company’s social and environmental practices.
We’ve come a long way. Being eco-friendly is no longer considered a fringe activity limited to activists and early adopters. Joining the dialogue and aligning your brand with deeply held beliefs is the marketing of the future.
Business must be part of the solution…Sustainable, equitable growth is the only acceptable business model. – Unilever
Bottom line: Don’t smoke, don’t litter, and be a sustainable brand – or risk losing your marketplace advantage.
In this interview, Martin Kremenstein, head of retirement and ETF solutions at Nuveen, defines ESG (Environmental, Social and Governance) and explains how ESG metrics serve both as an indicator of quality, and can be used as a risk management tool. Some takeaways:
- According to research from MSCI, companies ranking in the lowest 20% in ESG ratings have been twice as likely to suffer a catastrophic loss (over 95% cumulative loss) within three years.
- MSCI downgraded Equifax to the lowest ESG rating on cybersecurity concerns one year before the data breach was announced.
- Facebook was excluded from Nuveen’s NuShares ESG Large-Cap Growth ETF when the ETF launched in December 2016 because Facebook scored relatively poorly over data privacy concerns compared to other tech companies.
- Before the Deepwater Horizon incident, BP had actually been downgraded and removed from major ESG indices over concerns about its outsourcing of maintenance of offshore oil wells, which was directly related to the accident itself.
By actually having this framework in place, you are really putting in place a method for trying to avoid tail risk from companies that are badly run, and may end up having serious, serious scandals in the press. - Martin Kremenstein, Nuveen.
Plastic stats have been making the rounds in the news, and especially on social media. Some highlights:
- 8 million metric tons of plastic enter the world’s oceans each year. (It’s like dumping a rubbish truck full of plastic in the water every single minute.)
- 500 million plastic straws are used every day in the US alone (only 4% of the world’s population.)
- Plastic bags can take up to 1,000 years to break down.
- Styrofoam never decomposes. (Read: NEVER)
In light of this, here are 15 countries and cities around the world that have made serious strides in the race against plastic. Let’s hope this is the beginning of a permanent trend.
As of August 2017, anyone in Kenya who’s found using, producing, or selling a plastic bag faces up to four years in jail, or a $38,000 fine.
On July 30, 2017, its independence day, the Pacific nation of Vanuatu announced the beginning of a phasing out of plastic bags and bottles .
In January 2018, the UK announced a 25-year plan to “set the global gold standard” on eliminating plastic waste. It has also eliminated plastic microbeads in “rinse-off” cosmetic and personal care products and previously brought in a tax on plastic bags in 2015 which has resulted in 9 billion fewer plastic bags in circulation.
In February 2018, Taiwan announced one of the farthest-reaching bans on plastic in the world which restricts single-use plastic bags, straws, utensils, and cups.
In July 2017, Zimbabwe announced a total ban on expanded polystyrene (EPS), a styrofoam-like material used for food containers that takes up to a million years to decompose.
Merchants have until June 5 to adapt to a policy banning single-use plastic bags. Meanwhile, the city of Victoria also announced it will bring in a ban on single-use plastic bags in July 2018.
In March 2018, the Californian city of Malibu’s local council voted to ban the sale, distribution, and use of single-use plastic straws, stirrers, and plastic cutlery effective June 1st.
As of July 1st, Seattle will enact a ban on plastic straws, along with single-use plastic utensils .
South Australia, the Australian Capital Territory, Tasmania, and the Northern Territory, have state-wide bans on single-use plastic bags. Queensland is set to follow suit in July 2018. Major Australian supermarkets Coles and Woolworths have announced they will phase out single-use plastic bags by mid-2018.
In January 2018, Canada put a full stop to plastic microbeads effective July 1st.
Hamburg brought in a fairly niche plastic ban in February 2016 against non-recyclable plastic coffee pods.
In 2015, France banned plastic bags. In 2016, France became the first country to announce a total ban on plastic cups, plates, and cutlery effective 2020.
13. New Delhi
Banned plastic bags completely in 2008. The country is now hinting at becoming the world’s first plastic-free nation and planning to become completely sustainable by 2020.
Styrofoam in California
Long Beach City Council recently approved a styrofoam ban from restaurants. Five cities in San Luis Obispo County, California have already banned the use and sale of Styrofoam-type food containers. The county government is considering extending the ban to the entire county as early as July 2018.