Would switching to sustainable investments make a difference?

Albermarle

You could try investing via this well known ethical bank.

Triodos Impact Investments

masonic

osmarks said:

masonic said:

osmarks said:

On the margin, you would be increasing the fossil fuel companies' cost of capital (they can raise slightly less money by selling shares).

On the flip side, you'd be making share buybacks cheaper for them. These are in the main established companies that I don't imagine issue new shares very regularly, but some of them will be engaging in buybacks with some of their profits.

Per share bought back, yes, but I don't see any reason that should matter to them.

It will make no material difference to price whether they are buying back or issuing. Markets are efficient and most participants don't invest with their conscience. But if it did, then you'd see opposite effects for buybacks vs issuance. As they'd own more of their share capital for the same cost, and the returns that flow from that. As others have suggested, if you want to harm these companies, then impacting their revenue stream would be the way to do it. This will in turn impact their fundamentals and have an enduring impact.

If one were to seek to use investment for positive change, the approach would be to collectively build a significant stake in such companies and exert some influence in the boardroom, not opt out where you have no voice at all.

MarkFromCornwall

You might consider investing in some council bonds via Abundance Investment.  Typically these are used to fund things like solar panels on public buildings, heat pumps and energy saving measures, with capital and investment repaid over several years. Fairly low risk, with returns a little higher than a savings account.

masonic

MarkFromCornwall said:

You might consider investing in some council bonds via Abundance Investment.  Typically these are used to fund things like solar panels on public buildings, heat pumps and energy saving measures, with capital and investment repaid over several years. Fairly low risk, with returns a little higher than a savings account.

Hopefully Abundance had a better record than other P2P outfits. I lent across a number of wind energy projects at Assetz Capital, which taught me more about the challenges associated with these than I ever cared to learn. But at least I was able to get some redress.

redpete

masonic said:

MarkFromCornwall said:

You might consider investing in some council bonds via Abundance Investment.  Typically these are used to fund things like solar panels on public buildings, heat pumps and energy saving measures, with capital and investment repaid over several years. Fairly low risk, with returns a little higher than a savings account.

Hopefully Abundance had a better record than other P2P outfits. I lent across a number of wind energy projects at Assetz Capital, which taught me more about the challenges associated with these than I ever cared to learn. But at least I was able to get some redress.

My investments in their commercial investments (in private companies) has had a significant number of failures, some on the edge of dodgy dealing by the companies' management. Investments in their council bonds however are pretty much as safe as can be, but with low returns (4% for the current crop) and exits pre-maturity might be difficult.

LHW99

Neither solar panels nor windturbines are free of fossil-fuel based plastics. In fact if all oil was banned from now, a great number of products just couldn't be produced - eg mobile phones, bubble packs for medications, many types of medical devices etc. Industry is beginning to create plastics from plant and other sources, but these are not yet direct substitutes, and can introduce their own environmental issues.

shortseller09

dunstonh said:

 ESG includes a number of woke initiatives, but your comments suggest that the woke side of things is not a concern.  

By using the term 'woke' I presume you are using it pejoratively, is that the case? If so, please explain.

Albermarle

 In fact if all oil was banned from now, a great number of products just couldn't be produced - eg mobile phones, bubble packs for medications, many types of medical devices etc

Yes, although the use of single use plastics needs to be curtailed as much as possible, many long life plastic applications ( pipes for gas, water and sewage , windows, flooring, car parts, aircraft parts etc) have a lower carbon footprint than many natural alternatives.

Industry is beginning to create plastics from plant and other sources, but these are not yet direct substitutes, and can introduce their own environmental issues.

One active solution is to actually produce the raw feedstock for certain plastics, from plant based sources.
In this case the actual plastic produced is identical to normal.
However the amounts involved remain very small, and with the European petrochemicals industry in a state of crisis, it has probably dropped off the priority list.

saajan_12

In theory / in large size: 
If investors sell certain stocks, they will go down in value (yes there is a buyer, but that's a market maker who will pay less and less if lots of people sell). If the stock goes down in value then they will find it harder to operate and raise capital. Meanwhile the ESG stocks you buy will go up in value and have cheaper capital to further their ESG practices. 

In practice for individuals: 
There's always the fact that you're one person with a relatively small portfolio so that tiny blip may not even affect the stock price. However that's the same as if you boycotted Starbucks or vote for a political party.. one person may not be noticed but if everyone thought that, no one would do it.