Climate & Investments (CAT Salon)

This is a community-written summary of one of our CAT Salon events. Find the recording here.

Speaker

Photo of Ben Yeoh

CAT member Ben Yeoh is a global equities pension fund manager and a playwright. He’s won awards for socially responsible investing and sits on several responsible investing type committees including for the UK regulator FRC and Royal London’s set of ethical investment trusts.
Twitter • Website

“Standard investing advice doesn’t consider sustainability”

Standard advice

Either…
60% in stock market / equity
40% bonds

…or the Warren Buffet investing method (a low cost equity index tracking fund)
10% in cash
90% in stock market / equity

Neither think about sustainability. They think about financial return.

Personal investment

Money isn’t the only capital you have

Some extra-financial capitals you may want to invest in:

  • Intellectual
  • Human
  • Natural 

1000£ you’re thinking of investing?
Might want to invest it in an extra form of capital. e.g. invest in a social relationship or learning to code or investing in a friend, health of yourself. Personal investment.

Budget

One way to get more money in the future is to spend less now. Have your budget under control.

Risky vs. stable

Want to compliment the financial investments with what you’re doing in your main job.

  • If your main job is very secure, certain, regular…
    … you can do something more risky with your investment money or put money into impact or other types of investments (e.g. personal)
  • If you’re already doing something risky / freelance…
    … think of your financial budget as a more stable thing

Stock market / equity investments

There are a few different lenses for looking at stock market investments

  • Low cost, cheap, passive investment vehicles —  don’t do anything with sustainable investments
  • Active funds — pick companies based on their financial return
  • Impact investing — you get a social & environmental return AS WELL AS a financial return

Trading stocks

Normal Stockmarket is trading ownership between people — like trading apples 🍎. Moving from person to person.

Secondary market activity

🏠 You have a house. You own the house. You sell the house. Someone else owns the house. Ownership changes but the house stays the same.

Strategies

  1. Invest: use your primary capital / money to build something new.
    Build a green house rather than an unsustainable house.
  2. Divestment: don’t buy any houses made out of concrete.
    Positive: more money & socio-political statement
    Negative: Didn’t do anything to change the nature of the house
  3. Engagement/activist: take ownership of the house or part of the house to change it over time
    E.g. change the roof, add solar panels, fix insulation issues, etc.

Summary: What can you do

  1. Pick your own investments (if you have a lot of time)
    12 different companies in different sectors — will do ok over the next 7 years
    Invest in things that need new money to build new things > Innovation
  2. Invest via funds — look for sustainable or ethical funds
    Ask your company / pension trustees to add options for sustainable/ethical funds (equities/bonds or whatever)
  3. Write letters (if you can’t find the options you’re looking for)
  4. Consider non-financial investments
    Like investing in personal or interpersonal growth
  5. Talk about it
    Have conversations with people to convince them how they can use their money or personal capital
  6. Think about your budget