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An innovative approach to renewable energy investment

Satish Kumar – the editor of Resurgence & Ecologist magazine – shares his support for Low Carbon’s innovative approach to fighting against the negative effects of climate change

Make no mistake-in the run up to the Paris Climate Change Summit (COP21), governments across the world cannot ignore the widespread momentum that the ‘divestment’ movement is gathering. Many institutions, nation states and high-profile individuals have already stated their intentions to move fossil fuel investments into climate change solutions.

As well as national governments and high net-worth individuals, it is the institutional investors that have the true power and resources to make a significant contribution in the fight against climate change. However, they cannot make this change unless fully incentivised by government and policy makers, and we hope to see this call to action brought to the fore at COP21.

Following a meeting with Nigel Labram, Low Carbon’s investment strategist, Kumar commented “The time has come when insurance companies and pension funds in particular must show their commitment to a sustainable future by investing their funds in green and renewable energy.  Low Carbon is to be congratulated for recognising this and mobilising investment in renewable energy. This is a timely initiative and I fully support the work of Low Carbon.”

The road to Paris – COP21

The most important global conference of the year in the environment and sustainability sector is fast approaching: the Paris Climate Conference, otherwise known as COP21.

The main objective of the Conference of Parties (COP) is to review the Convention’s implementation of a framework for action against climate change. The first COP took place in Berlin in 1995 and since then major milestones include COP3 where the Kyoto Protocol was adopted, COP11 where the Montreal Action Plan was produced and COP17 in Durban where the Green Climate Fund was created. The hopes of the industry ride high with COP21 in Paris. This year, there is the potential to create noticeable change for the first time in over 20 years of UN negotiations. The aim is to achieve a legally binding and universal agreement on climate change, with the aim of keeping global warming below 2°C.

The call to action to mitigate the negative effects of climate change, won’t fall on deaf ears – this year the conference is expecting 50,000 attendees including 25,000 official delegates from government, intergovernmental organisations, UN agencies, NGOs and civil society. The scale is significant, so much so that it is one of the largest international conferences ever to take place in France. No wonder that the expectation is so high and the potential so great.

So what’s the state of play so far? 127¹ countries have already submitted their Intended Nationally Determined Contributions (INDCs). These statements publicly outline what post-2020 climate actions that a country intends to take, and will determine whether they are an ambitious 2015 target, in order to move towards a low-carbon, climate-resilient future. Therefore, if an agreement is reached at the conference then action will need to be taken by each country to support these commitments. For instance, the USA intends to reduce emissions by up to 28 per cent compared with 2005 levels by 2025. The EU has said it will reduce greenhouse gas emissions by 40 per cent compared with 1990 levels, by 2030.² To achieve these goals, each of these regions will need to double their rates of decarbonisation. Businesses in particular can therefore expect changes in climate policy, regulation and investment in order to reduce carbon emissions.

The excitement that those involved in the industry have for COP21 can already be felt. At this year’s New York Climate Week, leading diplomats expressed high hopes for a global climate deal to be reached at the Paris conference, and huge multinationals signed up to impressive carbon targets. Even Todd Stern, President Obama’s Special Envoy for Climate Change, stated that there is more chance than ever for a worldwide agreement: “The stars are more aligned now for an historic universal agreement [in Paris] than they have ever been,” he said. “So let’s work together. Let’s keep our eyes on the prize. And let’s get this done.” However, as the recent talks in Bonn have proven, there is still some way to go. The frustration felt by delegates when negotiations had both a rocky start and a pressurised end, show that reaching a deal in Paris is certainly going to be a challenge.

It’s absolutely vital that we achieve this “universal agreement” in order to mitigate the negative effects of climate change before it’s too late. We at Low Carbon have high hopes for the conference, and encourage others to help call for change. It’s only through collaboration and a drive towards a common goal, in Paris and in the future, that we can make our hopes a reality.

[1] http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx
[2] http://www.carbonbrief.org/paris-2015-tracking-country-climate-pledges/

‘Pester power’ in the age of sustainable investments

First published in Investment Adviser magazine – original article titled “Big investors can’t ignore demand – What is driving the interest in a greener economy?” can be viewed here

 

Nigel Labram, investment strategist at Low Carbon, on how the movement towards divestment and sustainable investment is changing the renewable energy investor landscape

It is hard to ignore the widespread recognition and attention that the ‘divestment’ movement is gathering with many high-profile individuals, institutions and even nation states pledging to move fossil fuel investment to renewable energy. Reducing carbon emissions and mitigating the negative effects of climate change is a cause close to many people’s hearts, and the power that ‘the man on the street’ has to influence sustainable change, should not be underestimated.

It is undoubtedly a welcome shift for the renewable energy industry with the retail investor leading the charge and setting the agenda for the institutional investors to follow. With high-net worth individuals including Bill Gates pledging to divest their fortunes from fossil fuels, it is only a matter of time before institutions respond to public pressure and take similar sustainable action.

London School of Economics Professor, Lord Stern, recently called for the younger generation to hold their parents accountable on where exactly their money is going. Armed with a thorough understanding of what is meaningful to them and ready to stand up for their values, it is the next generation that may truly hold the ‘pester power’. The young, savvy investors of today are more likely to consider how their investment decisions affect future generations, and indeed how they underpin their beliefs and values.

Divestment: the new era of responsibility?

With the groundswell of support for divestment, it is important to define its terminology. At its core, a ‘sustainable’ or ‘responsible’ investment or re-investment into renewable energy, is one that continues to add value and generate stable, fixed returns over time. These investments are unique– they are not just about making returns, but they ultimately help to reduce carbon emissions.

The retail investor may be more incentivised to make a sustainable investment if renewable energy technology features in their daily life. For example, if you can see the tangible financial returns that are to be had from installing solar photovoltaic panels (PV) on your roof, you may then be more likely to invest greater sums of money into renewable energy equity as part of a sustainable pension plan.

Institutional investors on the other hand, can certainly learn from the retail investor. But the difference is that they cannot act with such speed and freedom due to regulation and the need for thorough planning with their advisory boards. This often means that any commitment to a long-term sustainable investment plan could take five years, or even longer, to come into full effect. This, however, should not act as a barrier for inaction in divesting from fossil fuels.

The power to invest

Institutional investors have the resources to make a significant contribution in the fight against climate change. They must first fully understand their energy footprint and the complex characteristics of their investments to then make truly sustainable divestment and re-investment decisions in the future.

Pension schemes have tremendous power, influence and the potential to invest capital into renewable energy schemes on behalf of their membership. There is positive momentum building with three major pension funds announcing plans to boost investments in low carbon industries by more than $31bn by 2020. It is more likely that they will act from pressure from their membership – in particular by listening to pension pester power from the climate aware generation of today.

Climate change is important to so many people – we can see the negative effects of climate change and pollution all around us. Having this evidence, this incentive, is already spurring individuals into action – from making the most basic of lifestyle changes to investing in renewable energy. Today’s divestment movement is largely led, and has been championed by, the man on the street (the retail investor).There may be a lag, it may take time, but the institutional investor cannot help but listen up.

Hive of activity at Low Carbon

We’re always busy bees at Low Carbon, but especially recently. We’ve just launched a new initiative to promote greater biodiversity in Cornwall, Dorset and Suffolk, with the help of UK honeybees.

Honeybee populations have halved in the UK over the last two decades, according to research by the University of Reading, with climate change, mites, pesticides and disorders, contributing to this.

To help give the bees a fighting chance, and encourage greater biodiversity in the UK, we have partnered with Plan Bee to install 25 bee hives across five of our solar farms. Each site now hosts more than 300,000 bees and they’re already producing some fantastic honey. With Plan Bee and our other tenant beekeepers we now have more than 2 million bees busily working on our solar parks.

To make sure everything is humming along nicely, we’re planning to connect each hive to the web so that Plan Bee can keep tabs on each bee colony by monitoring parameters such as brood temperature, humidity, hive weight and weather conditions, remotely.

As an organisation, we are always looking to play a central part in the farming communities surrounding our sites. By locating our solar farms on fallow land that is unusable for agriculture, we are not only supporting local economies, but we are also helping to protect local habitats and ecosystems.

Encouraging biodiversity should not be a bolt on for renewable energy companies, but rather a core responsibility. Protecting bees, insects and other species is a crucial part in the fight against climate change and we’re excited to be leading the charge with our latest initiative to support biodiversity.

 

Low Carbon shortlisted for two Solar Power Portal Awards

We’re feeling rather chuffed at Low Carbon, having been shortlisted for two awards at this year’s Solar Power Portal Awards. Our work on the Berwick Solar Park has been nominated in the Ground-mount >5MW category, with our partnership with Land Rover BAR also making the cut for the rooftop < 250KW shortlist.

We are fully committed to working on projects and engaging with  new partners to mitigate the negative effects of climate change. We partnered with Land Rover BAR to lead the way in sustainability in sport and to bring the Americas Cup home. Powering the team’s headquarters with roof-mounted solar panels, it has a capacity of 114KW- producing enough clean energy to power more than 40 homes and save in excess of 60 tonnes of C02 annually.

Our solar installation is supporting Land Rover BAR to achieve BREEAM ‘excellent’ status (one of the foremost assessment standards for buildings and their environmental impact). Furthermore, educating the public on the benefits of renewable energy is a key part of our partnership. Solar PV has been installed on three floors. For the visitor’s floor, the solar PV will be supported with educational signage as well as interactive displays. We believe that engaging visitors with clean energy generation issues is integral in the fight against climate change.

From commercial buildings to arable land – engaging with farmers and local communities is a key part of what we do. Our work on the Berwick Solar Park is a great example of a fully operational solar park that is fully integrated within the community and landscape. This site is particularly special because local residents can invest in the site, and fully engage with the project. Furthermore, there are habitats for bats, birds, bees and insects on the site with the inclusion of a Swift tower, crafted by a local carpenter. The local flora and fauna is flourishing. Finally, this park hosts an outdoor education area where children and the community can learn how renewable energy works.

There is still a long way to go in the fight against climate change, but we are determined to keep investing in projects and partnering with innovative companies to help achieve a low carbon future.