In the last year, we've seen extreme weather around the world, from wild fires in California to devastating floods in Europe. This week, the UN Intergovernmental Panel on Climate Change (IPCC) reported a working group update on climate change, showing dramatic increase in CO2 levels in the atmosphere.
Some key takeaways from the working group, comprised of 195 countries, include:
- Extreme weather conditions and other signs of climate change are observed in every part of the globe - this is directly linked to human activity.
- The future of the climate is of concern, with hotter temperatures and more extreme weather expected.
- IPCC recommends aggressive reductions in CO2 emissions, with a goal to reach net zero.
While the IPCC says that human activity is largely at fault, the good news is there is something we can do about it. As advisors and investors, we can make a difference by directing our capital to companies that are taking steps to make a positive impact on the earth.
The Seeds' investment process enables investors to gain exposure to traditional sectors, without needing to empower companies with poor performance when it comes to climate issues.
From a macro perspective, we believe governments may impose a carbon tax in the future to limit CO2 emissions. We therefore look for companies with more resilient business models should carbon taxes become a reality. For example, large consumer product companies, such as Proctor & Gamble (P&G), have aggressive targets to be carbon neutral for the decade 2020-2030. We believe investing in long-term in companies like P&G is a win-win for both investor financial goals & for the earth.
To read the full report from the UN IPCC's working group, see Climate Change 2021.