Investing in Climate Change

Our Climate is Changing

There is no doubt our world is getting warmer – temperature is easy to measure. For business and political reasons there is a great deal of “noise” as to why the world is getting warmer. However, let’s assume for the moment that we are the cause. And, even if we’re not the cause, it’s certainly in our best interest to try and reverse the current trend.

Forty years ago, a group of climate scientists sat down at Woods Hole Oceanographic Institution in Massachusetts for the first meeting of the “Ad Hoc Group on Carbon Dioxide and Climate”. It led to the preparation of what became known as the Charney Report – the first comprehensive assessment of global climate change due to carbon dioxide. And guess what? They nailed it.

Since the report, the world has warmed pretty much as Charney and his colleagues expected, and in tandem climate change science has improved significantly. Today, the scientific community is predicting that without immediate and major changes to all aspects of society the current exponential rise in greenhouse gases (carbon dioxide, methane, nitrous oxide, ozone, CFCs and HCFCs) will have catastrophic impacts on the planet. Last year, the Intergovernmental Panel on Climate Change (IPCC) reported that to keep the rise in global temperatures below 1.5 degrees Celsius this century, emissions of carbon dioxide would have to be cut by 45% by 2030. Keep in mind, this is ONLY to limit the rate of global warming not to prevent it.

A reduction in emissions couple with massive scaling up of restoration of land and changes in our food system to reduce meat consumption are required to help lower the rate of global warming. Led by the Carbon Neutrality Coalition - a group of countries, cities and organisations who have committed to take concrete and ambitious action to achieve the aims of the Paris Agreement – climate change is rapidly becoming THE key economic driver for the global economy.

The Economics of Climate Change

As the world gets warmer the impact of climate change is reaching people on a personal level on a more and more regular basis - be it the increasing regularity of wildfires or extreme flooding. An excellent article entitled, “Climate Change Facts and the Effect on the Economy” outlines just how significant and far reaching these factors are. To put things into context, it’s estimated that climate change threatens 1.2 billion jobs.

The article looks into seven basic ways that individuals can help stop climate change which include: plant trees, become carbon neutral, switch to a plant based diet and avoid products using palm oil, pressure corporations, reduce food waste, cut fossil-fuel use and hold governments accountable.

Another way to people can impact climate change is to vote with their dollars. This includes spending money in a proactive way and investing money in a proactive way. Beyond Meat’s (NASDAQ: BYND) initial public offering earlier this year shows the power of socially responsible investing. Beyond Meat is a plant-based protein alternative and also happens to be the best-performing IPO in 20 years - shares have jumped from the IPO price of $25 to over $200 per share. This marks a sea change for impact investing and demonstrates how socially responsible investments can (and should) maintain a huge investment premium. Green is not only good - it’s profitable.

Growth Industries in Response to Climate Change

John F. Kennedy said, “In a crisis, be aware of the danger but recognize the opportunity.”

According to a report by the New Climate Economy, if we make the right choices over the next 2-3 years we could unlock benefits worth $26 trillion from here to 2030 and create 65 million new low-carbon jobs. A new model for sustainable economic growth, according to the report, can come through: clean energy systems, smarter urban developments, sustainable land use, water management technologies, and a shift towards a more circular (reuse, reduce and recycle) economy.

Michael Toffel, John Heinz Professor of Environmental Management at Harvard Business School, wrote: “The untold story is that climate change offers opportunities as well as risks, and business is already changing. Climate change is such a broad issue, and it’s affecting business in a wide variety of ways. And businesses are developing technologies, products, and new operating models in response.”

Historically, investing in “green” was for only the most conscientious investors. Today, funds are pouring billions of dollars into technologies and industries that will facilitate the transition to a clean-energy world. Going forward, climate change will unfold to become the growth story of our lifetime.

Our Future is Clean and Green

Newcoast Capital has been recently reappointed as Corporate Development Advisor to GreenPower Motor Company (TSX-V:GPV and OTC:GPVRF). GreenPower has fully transitioned from product development to product commercialization. With the largest suite of electric buses available in North America and an order backlog of 200 buses, the company is poised to ramp up sales. We will provide a detailed assessment of GreenPower in our next newsletter early next week - suffice to say we are very excited to be part of the next phase of growth at GreenPower.

To review GreenPower's most recent investor deck: click here.

At Newcoast, we are committed to expanding our clean/green technology project portfolio and will be focusing on investments that speak directly to climate change. If you are aware of a publicly traded or privately held clean/green technology company that requires financing and/or general corporate development support please let us know.

Note: This article is for marketing purposes only and does not constitute an offer to buy or sell securities. We advise you to contact a registered securities broker prior to making any investment decisions. At the time of distribution Newcoast Capital is a shareholder of GreenPower Motor Company.