ACF has created its own ESG rating system for small and mid-cap mining companies on the ASX because the industry is highly scrutinised in relation to sustainability and its carbon footprint, and  mining is the largest contributor to the Australian economy (10.4% of GDP, 2019-2020A). The junior mining sector, in particular, is in constant need of capital by definition. We have created a simple initial ESG filter to help showcase what the Australian mining sector is doing to begin to show it understands the challenge and opportunity…READ ACF ASX ESG Rating

In this webinar in partnershp with OTC Markets, Christopher Nicholson and Renas Sidahmed discuss how to get ahead of the curve by implementing an ESG policy that encourages investor interest and when done well can boost your valuation…LISTEN TO THE WEBINAR

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CellCube (Enerox GmbH) is a pioneer and technology leader in the development and deployment of off-grid Vanadium Redox Flow Batteries (VRFB). CellCube’s product addresses volatile supply in renewable generation. The company has recently signed a set of cross sector construction and distribution agreements in the US, Australia and Africa. VRFB is a promising scalable energy storage technology. Redox flow batteries lend themselves to microgrids, utility-scale storage projects, renewable energy integration and blackout prevention. Moreover, VRFBs are better placed than Li-ion or other solid-state batteries to serve …READ CELLCUBE CORE INVESTMENT CASE

The ESG FinTech summit hosted by London in the UK, on Tuesday the 14th of June, was an event that brought together senior financial professionals all working towards implementing sustainable best practices.

Everyone agrees that ESG is important for business operations and for access to capital (this is particularly relevant for small and mid-caps). However, everyone is also of the view that the lack of standardisation of ESG guidelines and metrics are a source of confusion.

Because of this lack of standardisation, regulatory authorities, e.g. the US Securities and Exchange Commission (SEC), are cracking down on corporates. The regulators are doing this on the basis of suspicion of …READ THE PROBLEM WITH GREENWASHING

Reducing greenhouse gas emissions on a global scale is not an easy task – green hydrogen is one of the keys to a low emissions global economy. As a result of anti-natural gas bans in California and New York, over the past two years the US natural gas utilities have launched 24+ hydrogen projects. Where substituting hydrogen for fossil fuels is an obvious choice for a cleaner carbon-free future, the controversy lies in the high costs of production of green H2. What is key is recognizing the long-term goals for atmospheric pollution / temperature change and the…READ HYDROGEN CONTROVERSY

Electric vehicle (EV) battery makers continue to explore the replacement of cobalt in lithium-ion battery cathodes in 2022 just as they did in 2021. EV manufacturers are concerned about labour practices involved in cobalt extraction, its volatile supply chain structure, scarcity, and its price changes. Investor ESG focus has also caused EV manufacturers to review cobalt sourcing practices. Apart from instability within the supply chain, there are also manufacturer and global governmental strategic metals concerns..READ EV BATTERIES’ SLOW MASS MOVEMENT FROM COBALT

The World Bank launched its Climate-Smart Mining fund in 2019 – the first of its kind dedicated to mining. Climate-Smart Mining assists and supports countries in implementing sustainable strategies in mining operations. The global economy is in the process of transitioning to low carbon technologies such as wind turbines, solar panels and battery storage, much of which is driven by the need to fight climate change. However, these technologies require large amounts of metals and minerals..READ THE WAY FORWARD: CLIMATE-SMART MINING

Cleantech investments in start-ups were very popular among the Venture Capitalists (VC) 10 years ago – the VC community, in particularly in Silicon Valley, was looking for something exciting and new following the aftermath of the Dotcom Bubble.

Unfortunately, given the capital investment scale of renewable technology infrastructure and the nascent nature of the sector at the time (the term “cleantech” was relatively new), these companies were, in the end, unable to deliver the necessary returns for VCs. During the period of VC funding between..READ A NEW INVESTMENT THEME FOR CLEANTECH IS TAKING HOLD

Activist funds are making a comeback after a retrenchment in 2020 due to Covid-19.  Smaller companies are particularly vulnerable. The resurgence in activist strategies and the growth in new players in this space is driven by two factors – sustainability/ESG and a frustration with passive investment strategies. In companies above $500m MCAP activist campaigns often raise legitimate concerns, but they tend to destroy Total Shareholder Return (TSR) for 12 months. 50% of CEOs subject to an activist campaign end up moving roles, according to…READ ACTIVIST ESG FUNDS – SMALLER FIRMS ON THE RADAR

A green boom is emerging as green firms outperform major indices in 2019 due to higher EVAs created by greater internal discipline in companies embracing sustainability (ESG with metrics). However, when checking ‘under the hood’ of companies, we are seeing a problem with greenwashing, so are governments (e.g. UK’s GTAG initiative) and other authorities (e.g. SASB).

The ESG Risk Rating measures what kind of exposure a company has to ESG breeches that can lead to billions in fines and a risk of severe sanction for those in executive roles. Increasingly, it is also an indication of a company’s probability of accessing future capital, and so future growth and total shareholder return…READ GREENWASHING SUSTAINABILITY? INVESTORS ARE WATCHING

After a booming start to the year, IPOs have fallen noticeably in 2Q21. IPOs are subject to the vagaries of capital markets and as a result some companies have chosen to delay their IPOs. Perhaps a necessary precaution in certain circumstances – such as price competition or inflation pressures. On the other hand, waiting too long for the ‘perfect’ market condition is not necessarily the optimal solution either.

Capital markets are volatile and market behaviour is unpredictable. In that regard, if companies prepare meticulously for their first ‘coming out’ onto the market and if thorough due diligence is conducted, companies will have more opportunities for a successful raise and leave an exceptional first impression…READ IS THE IPO MARKET COOLING OFF

Environmentally supportive business models are increasingly popular with both institutional and retail investors (ESG). The strong and growing emphasis on ESG within the investment community means the waste-to-energy sector is picking up political, legislative and capital concessions and opportunities. These drivers, in turn, lead to a more aggressive growth profile for the renewable energy/cleantech sub-sector, which should increase investors…READ RECYCLING OUR WASTE INTO ENERGY

Protecting our ecosystem is not only a collective effort but also a creative and strategic effort. We maintain a level of realism/pessimism about the rate of innovation in this area – which is that carbon emissions are not going to disappear overnight and we are not going to adopt, en masse, a carbon emissions free way to manufacture concrete/steel/glass tomorrow. However, there are options to offset these emissions in the meantime.

But what does this mean for nano to smaller companies? What does this mean for companies whose business models don’t necessarily emit a significant amount of carbon? How can they get involved?…READ PRICING NATURE & CARBON CREDITS

Hydrogen is one of the top candidates to help the UK economy to lower emissions and reach the climate goals set out in the Paris Agreement to limit global warming to well below 2 degrees Celsius, and preferably limit warming to 1.5 degrees Celsius, compared to pre-industrial levels.

In the UK it is estimated that ~85% of homes and 63% of commercial properties are heated by natural gas – a carbon emitting fossil fuel. As a result, buildings are the third largest emitters of greenhouse gas emissions in the UK, behind industry and transport. Replacing natural gas with hydrogen is a potentially…READ THE HYDROGEN SOLUTION – AN INVESTOR SIGNAL

Investor’s growing interest in ESG is driving funds into sustainable investments. Companies must develop sustainable policies now or risk falling behind. S&P Global forecasts that assets in sustainable investment products in Europe will reach €7.6trn over the next five years. At this rate they will outnumber ‘conventional’ funds. ACF estimates that globalESG filtered funds will reach $25 trillion by YE20. A recent report from the Forum for Sustainable and Responsible Investment (US SIF) found US AUMs using sustainable investment strategies expanded by US $17.1trn in 2019, up 42% from US $12trn in 2018…READ ESG INDICES OUTPERFORM

SmartFish H2020, a recent Norwegian initiative, reduces the fishing industry’s impact on marine life. SmartFish creates smart nets and scanners. Smart tech is saving fish one environmentally friendly net at a time. SmartFish H2020 is an EU funded project led by SINTEF Ocean (a Norwegian company focused on environmental technology).  Everyday 1000’s of fishing trawlers take to the seas and release miles and miles of nets. Over the last few decades this has led to overfishing…READ SAVING FISH ONE SMART NET AT A TIME

Global markets are transitioning to an environmentally friendly arena. Environmental Social and Governance (ESG) metrics are the key drivers, as they are increasingly used by portfolio managers as the first filters for investment opportunities. The way in which the ESG filter trend is gaining momentum suggests to us that there will be a flipping or tipping point. If there is an ESG filter tipping point, we suspect it will catch many smaller and mid-cap companies off guard and this could be fatal to them. ESG is positive for mining companies and the communities where the mining companies are based…READ NEWMONT’S ESG GOLD GOOD FOR MINING

The use of urine for commercial use dates back to the first century AD when Roman’s used urine in tanning and imposed the Roman Pee Tax. Soaking the hide in urine helped dissolve fatty tissues, which were then subsequently removed, producing a softer wool product. Finding alternative uses for waste products is not a new phenomenon. We have seen this with plastics, paper, cardboard and even food waste. So why not urine?

The ammonia that is generated in current commercial fertiliser manufacture extracts nitrogen from the atmosphere, via the Haber Process. The Haber Process is very energy intensive…READ URINE – LIQUID GOLD FERTILISER

Although the concept of ESG investing is not a new one, the ESG ETFs market is still in its infancy in terms of translating interest to actual AUM. Notwithstanding this, our long-term view of an accelerated ESG adoption across all traditional carbon intensive industries – such as coal, oil and gas – still remains intact. We infer that the renewable energy sector is a direct beneficiary of the growing demand for ESG optics. Investors are starting to direct their portfolios to alternative (i.e. renewable) energy sources…READ IS ESG DRIVING RENEWABLES

Tim De Chant, a climate journalist and lecturer at MIT, reported in Undark on the 20th of August how households in the US use up almost 2x the amount of energy as households in Europe.

US homes produce approximately one-fifth of the US’s greenhouse gas emissions (GHG) – this number is expected to have increased as a result of Covid. These high emission levels are due to most homes averaging an age of 37 years and continuing to be heated and powered by fossil fuels. This is why fossil fuels make up 80% of the country’s overall energy use…READ CLIMATE FRIENDLY HOUSING

Conventional energy sources such as coal, oil, natural gas, and nuclear material have a substantial effect on the environment via the release of harmful greenhouse gases (GHG). Carbon Dioxide (CO₂) and Methane (CH₄) account for over 90% of gases emitted into the atmosphere. GHGs also cause water pollution, wildlife and habitat loss, and require significant land and water use.

Renewable (non-conventional) energy is considered to be less harmful and energy efficient because it does not deplete the earth’s natural resources (directly). However, numerous studies have shown that…READ GREEN ENERGY’S HIDDEN IMPACT ON THE ENVIRONMENT

A report from State Street Global Advisors (part of the trillion dollar club of leading asset managers that set terms for the rest of the investment industry) published towards the end of last year made some interesting points about ESG for the fund/portfolio management and beneficiary communities. There are equally interesting read-throughs for small and mid-cap corporates related to volatility, valuation and so research.

In our view, the report’s target audience is organisations with AUM (assets under management) greater than $50bn, however we have pulled out the key points that provide some useful insights for smaller and mid-cap companies looking for stable high quality investors, improved valuation and lower…READ ESG – 12 MONTH READ-THROUGH FOR SMALL AND MID-CAPS

The evolution of renewable energy over the past decade has been impressive, with growth rates of capacity and production accelerating significantly. Costs of production have fallen and the level of investment has increased. As with any growing sector, consistency among all players is key, particularly if there is an interest in creating an homogenous market across all countries and sectors.

The key to achieving this consistency in players and a flat competitive market is regulatory policy. In matters of this scale and importance, it is our view that regulation has an instrumental part to play. Regulatory policy is needed to…READ HOW REGS HAVE HELPED TO STIMULATE THE RENEWABLE MARKET

Global energy consumption has grown over the last 14 years, reaching 561.3Mtoe (millions of tons of oil equivalent) in 2018 up a staggering 583% from 82.2Mtoe in 2005 (BP, 2019). In US dollar terms, global investment in renewable energy grew to 288bn in 2018 up 84% from 45bn in 2004 (Frankfurt School-UNEP Centre/BNEF, 2019)

The world has relied heavily on fossil fuels, like coal and gas, as a primary source of energy. However,  with increasing negative externalities (these are the hidden costs not represented in fossil fuel market prices, such as global warming emissions and air pollution) associated with fossil fuels, the world is now shifting towards greener energy sources….WIND ENERGY: PATHWAY TO GROWTH 

Over the last three months the concentration of assets under the largest investment funds (the trillion-dollar club) has increased substantially. The largest 1% of fund manager groups manages 61% of total AUM (assets under management) which is 243 times that of the bottom 50%, compared to 208 times at the end of 2019 and 105 times in 2010.

The expectation is that the industry concentration among the larger members will increase as M&A becomes more attractive to asset managers. Franklin Templeton is in the process of buying Legg Mason which will increase its asset base to $1.5tn and Invesco worked its way into the trillion-dollar club last year after acquiring…READ IS ESG ESSENTIAL TO SECURE INVESTMENT?

ESG can only improve valuation. A sustainability policy (ESG) provides formal access to USD 25.2 trn AUM and far more AUM informally. An ESG (Environmental, Social, and Governance) policy is a set of quantifiable metrics that ‘responsible investors’ use as part of their screening/filtering process to measure a company’s sustainable business activities. The environmental criteria measures the necessary…READ OUR THEMATIC RESEARCH

As governments around the world battle with policy and cultural changes required to meet the Paris Agreement climate change targets, the pressure to expand renewable energy technology production is significant. Renewable energy share of total world energy consumption and electricity generation is forecast to continue growing rapidly, hitting almost 50% of global electricity production by 2050. The environmental, political and financial benefits are clear, and these are driving the expansion, but what are the environmental impacts?…..READ MORE ON RENEWABLE ENERGY PRODUCTION – PART 2 

As governments around the world battle with policy and cultural changes required to meet the Paris Agreement climate change targets, the pressure to expand renewable energy technology production is significant. Renewable energy share of total world energy consumption and electricity generation is forecast to continue growing rapidly, hitting almost 50% of global electricity production by 2050. The environmental, political and financial benefits are clear, and these are driving the expansion, but what are the environmental impacts?…..READ MORE ON RENEWABLE ENERGY PRODUCTION- PART 1