What is World Tree?

If you had the opportunity to fight climate change, inequality and poverty all at once, would you take it?

What if that opportunity also included the potential for profit?

If you think that sounds too good to be true, it’s time for you to meet World Tree and their Eco-Tree program.

World Tree

World Tree was founded by Wendy Burton in 2015 as a way to promote the benefits of the Paulownia tree, also known as the Empress Splendor tree. This particular tree boasts some very impressive stats: it’s the world’s fastest growing hardwood tree, matures in only 10 years, and can regenerate up to 7 times after harvest. The Empress tree is also non-invasive and produces some of the lightest hardwood lumber.

World Tree’s objective is to use the Empress Splendor tree to meet the growing global demand for timber in a more sustainable way. The World Tree Eco-Tree Program unites investors and farmers in making an environmental and economic impact on the world. Here’s how:

The World Tree Eco-Tree Program

World Tree grows the Empress tree with their network of farmers in North and Latin America. The farmers provide the land, labor and care of the trees, with World Tree’s guidance. The Eco-Tree Program is funded by investors, where every $3,000 invested allows World Tree to plant 1 acre of trees (about 100 trees).

After approximately 10 years, World Tree harvests these trees and sells the lumber. The profits of the sales are then split 3 ways, with 25% going to World Tree, 25% going to the investor and 50% going to the farmers.

Over 100 farmers and 1000 investors have joined the Eco-Tree Program since its inception.

Making an Impact

An investment in World Tree impacts many different corners of the world. Here are just some of the ways you can make a difference with the World Tree Eco-Tree Program.

  • Reduce your carbon footprint. The average amount of carbon emissions generated by one person in the United States is 16 tons per year. The Empress Splendor sequesters carbon at a rapid pace, helping investors to offset their carbon footprint with only one acre of trees.
  • Support farmers. World Tree provides farmers with the Empress trees, along with training and support, at no cost to the farmers. The farmers receive 50% of any profits from the harvest. After the harvest, the trees regenerate and regrow without replanting. This provides farmers with an ongoing source of income that can last for up to 70 years.
  • Support nature. The Empress provides soil with a natural fertilizer. Additionally, its flowers provide nectar to honey bees; one acre of trees will help produce 100 jars of honey per year.

Getting Involved

Schedule a time to talk using the World Tree meeting type here:



This is neither an offer to sell, nor a solicitation to buy, a security, which can be made only by the prospective investors if it is preceded or accompanied by the Offering Circular, which contains various and important risk disclosures. This material does not purport to be complete and should be read in conjunction with the Offering Circular. All potential investors must read the Offering Circular and no person may invest without acknowledging that they have received, read, and fully understand the Offering Circular. The Offering Circular can be read by clicking here. 

What we’re doing internally and the importance of planning

In the spirit of full transparency, we thought it would be worth taking a minute to discuss how Common Interests has prepared for emergencies.

  • Our first priority is the security of our clients’ accounts and our ability to provide access and up-to-date information in times of crisis. To this end, we have conducted rigorous due diligence on our partners, and have evaluated their business continuity plans. We invite you to read the business continuity plans for our key partners here:
  • Our second priority is making sure that our firm is protected so that we can continue to serve our clients. Too many people rely on us for us to get sick. Here are the steps we’re taking:
      • Our office functions almost entirely on cloud based systems. Our phones, trading system, meeting platforms, website, and client files are all hosted on separate secure cloud servers with redundant backups. We converted to these systems in the wake of Hurricane Sandy, and have been training and preparing for the next disaster since then. We have relied on these systems to continue working from the road at conferences in the past, and have full confidence in our ability to continue to serve our clients from anywhere with a stable internet connection and a power outlet.
      • We re-configured our scheduling tool to provide additional clarity and make additional options available to our clients, while restricting non-client meetings. Our firm has offered Virtual meetings for years, and we’re extremely comfortable meeting over video chat with screen-sharing. To protect both ourselves and our clients, we are encouraging everyone to meet with us virtually or over the phone.
        • Give the new configuration of our scheduling tool a spin below! We’re here to talk. Please feel free to use it to find a time to chat, even if you only have a quick question (there’s an option for that!)



 

Nobody expects the Spanish Inquisition

It’s been an especially brutal week so far in the markets, which reminds us of a classic Monty Python sketch.

Nobody Expects the Spanish Inquisition.

We can’t claim to have seen the new Coronavirus, COVID-19 coming. That’s kind of the point. Outbreaks happen suddenly and without warning. There are no ‘catalysts’ for an event like this, and as investment managers and Financial Advisors, the past few days have been difficult, to say the least. Bob and I have been on the phone with clients constantly, and expect to hear from more in the coming days. There are a few common threads to these conversations:

The Chief Weapon is Surprise… Surprise and Fear. Fear and Surprise

Like the Spanish Inquisition, the COVID-19 virus plays on our fears. As investors, we have to balance what we see and read against the goals we set and our timelines. We’ve been devouring as much information about the current outbreak as we can, attending webinars from our partners at MSCI (based on research they published a few weeks ago), reading the thoughts of managers that specialize in investing in the asian markets, and talking with clients about their goals, their timelines to meeting their goals, and whether our current strategy is still appropriate. I’m thankful that we started having these conversations at the beginning of the year, and that we’ve focused on how much risk is appropriate to take.

The truth is, nobody knows when something like this will hit, how bad it will get, or where the ‘bottom’ will be. All we can do is think through the amount of risk we’re willing to take, and stick with that strategy, having faith that this too shall pass. We invest for a reason, whether that’s saving for a house, college, retirement, travel, or any of the other reasons we save, there is always a reason. I encourage you to think beyond the short term fluctuations of the markets, and evaluate your overall strategy. Are you taking the right amount of risk for you?

We recommend some comedy to get you through the week.

And Bright Red Uniforms:

If you would like to meet with us to review your risk tolerance, here’s our scheduling tool:

 


Max will be speaking at the United Nations on December 5!

I’m very pleased to announce that my partner Max will be speaking at the inaugural InvestmentNews ESG & Impact Forum on Dec. 5 at the United Nations.

While we specialize in Sustainable, Responsible and Impact investing for our clients, we also believe that we have a responsibility to educate and help other advisors adopt these techniques. That’s why Max has agreed to be on the advisory board for this event and give his time to speak. The panel he’s on will be moderated by Jon Hale of Morningstar (read his blog here), and will feature Colleen Denzler of Smith Capital Investors and Marguerita Cheng, the CEO of Blue Ocean Global Wealth.

Here’s what they will discuss:

As the demand for impact investment opportunities continues to grow, so does the increased responsibility on advisers to develop stronger investor education programs, increase transparency and adopt more precisely-defined metrics for measuring impact. ESG and impact investors, primarily motivated by moving the needle on specific environmental, social and governance issues, while also pursuing financial returns are increasingly flexing their purchasing power with advisers. It’s important therefore for investment advisers to understand that each client has views that are unique and diverse, requiring flexibility and customization to support each client’s goals. This panel will explore best in practice communication strategies for a more meaningful and effective client engagement experience.

As you can see, this conference is focused on Financial Advisors and other financial professionals. Click Here to register. And when you use code ESGFRIEND you can get a $50 discount. Please feel free to share this using the links below if you know anyone who would be interested in attending, and use the hashtag #INimpact so InvestmentNews knows you’re coming!

Record 515 institutional investors managing $35 trillion in assets urge governments to step up ambition to tackle climate change

Ahead of next week’s United Nations Climate Action Summit, a record 515 institutional investors managing $35 trillion in assets urged governments worldwide to step up action to tackle climate change and achieve the Paris Agreement’s goals.

The Global Investor Statement to Governments on Climate Change, developed by the seven Founding Partners of The Investor Agenda, calls on governments to phase out thermal coal power worldwide, put a meaningful price on carbon pollution, end government subsidies for fossil fuels, and update and strengthen nationally-determined contributions to meet the emissions reduction
goal of the Paris Agreement no later than 2020.

“The global shift to clean energy is underway, but much more needs to be done by governments to accelerate the low carbon transition and to improve the resilience of our economy, society and
the financial system to climate risks,” the investors wrote. They warned the current government commitments leave an “ambition gap” that will not prevent global average temperature from rising
beyond the 1.5 degree threshold that scientists warn could trigger catastrophic and irreversible effects of climate change.

The investors’ call to action published today comes as UN Secretary-General António Guterres is asking all leaders, from governments and the private sector, to present plans – at the UN Climate Action Summit on September 23 or at the latest by December 2020 – to cut greenhouse gas emissions 45% by 2030 and reach carbon neutrality by 2050. “I am also asking all investors to scale up green ventures, to increase lending for low-carbon solutions and to stop, in effect, financing pollution,” Secretary-General António Guterres said at a preparatory meeting for the
Summit.

Signing the Global Investor Statement to Governments on Climate Change is an action item in the Policy Advocacy focus area of the The Investor Agenda. Launched in September 2018 by seven Founding Partners — Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative — The Investor Agenda is a collaborative initiative that aims to accelerate and scale up the investor actions worldwide that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping global average temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions
that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy.

The Founding Partners also announced today the release of The Investor Agenda Annual Progress Report, which found that nearly 1,200 investors have taken action in one or more of the focus areas of The Investor Agenda. More than 750 investors have engaged with or directly influenced portfolio companies to act on climate change, more than 400 investors have stepped up their own disclosure on climate change, and more than 260 have set a climate target.

“Investors are stepping up their response to climate change and increasingly aligning their investment with the goals of the Paris Agreement,” said Rebecca Mikula-Wright, Director, Asia Investor Group on Climate Change (AIGCC). “The Investor Agenda has a pivotal role to play as a platform for supporting investors to lead ambition and catalyse sustainable investment, whilepromoting engagement across all regions and jurisdictions.”

“The Investor Agenda provides an unprecedented global forum for investors to accelerate action on climate change and drive transformation of capital markets to deliver a 1.5-degrees Celsius economy. To do that investors need to take further action themselves, but also require stronger incentives from governments” said Paul Simpson, CDP CEO.

“The global reach and potential impact of The Investor Agenda and the global collaboration of the seven organizations are quite extraordinary,” noted Mindy Lubber, Ceres CEO and President. “With the immense power and influence that investors hold in our global economy, they have a tremendous opportunity and responsibility to act at the urgent pace and scale required to keep average global temperature rise to no more than 1.5-degrees Celsius.”

“By working with our peers globally and across the regions, we can scale up ambition and action to tackle climate change and deliver on the promise of the Paris Agreement,” said Emma Herd, Chief Executive Officer, Investor Group on Climate Change (IGCC). “Collaboration is the key to success, and investors must play our part. The Investor Agenda is the platform we need to drive real investor action at this crucial point in time.”
Climate change poses an unprecedented threat to the global economy,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC). “Investors representing nearly half the world’s invested capital are sending a clear message that they need to see far greater ambition from governments in addressing the climate crisis. A considerable number of countries have already committed to delivering net zero emission economies by 2050. Investors are asking that others now follow their lead.”

“The Investor Agenda has a critical role to play in compelling investors to act and bring about lasting change around climate,” said Fiona Reynolds, CEO of Principles for Responsible Investment (PRI). “Ambition and meaningful action from governments, business and the financial sector is imperative to curb the current trajectory of global warming. These groups must act now to curb the climate emergency the world is facing by reaching the goals of the Paris Agreement to realise 1.5-degrees Celsius.”

“There is a growing urgency for investors and corporations to act on climate change goals. As of today, temperatures have risen 1-degree Celsius above pre-industrial levels,” said Eric Usher, Head of UNEP Finance Initiative. “To keep the rise to within 1.5-degrees Celsius globally, leadership from within the investor community will be key. The Investor Agenda is one critical platform in supporting investors in their individual actions.”


About The Investor Agenda
The Investor Agenda is a collaborative initiative to accelerate and scale up the investor actions that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping average global temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. It has been developed by seven Founding Partners: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative. Visit www.TheInvestorAgenda.org for more information.

Climate Risk in Passive Investing

We’ve been seeing a lot of articles recently about a “bubble” in passive (index) investing. We haven’t commented much on this trend, as we’re big fans of low cost index funds in our portfolios. However, an article came out yesterday in Forbes that makes a point connected with this debate that we agree with wholeheartedly. Jeff McMahon writes in his article “Index Funds Face Heightened Risk From Climate Change” that Index funds are uniquely exposed to the systematic risks faced by climate change, and specifically to the inevitable policy response to climate change.

The Principles For Responsible Investing (PRI) (of which we are a signatory) has been doing a lot of research on this (see here for more information, or click here to view the slides from a recent event we attended with the PRI). We have incorporated this viewpoint into our portfolios, and the way we’ve done it speaks directly to McMahon’s article from yesterday.

McMahon points to the recent testimony before Congress from Alicia Seiger, the Managing Director of Stanford’s Sustainable Finance Initiative, who argues that investors are less able to manage climate risk because they are less able to monitor it (you can read her entire testimony here). We completely agree with this for the vast majority of index funds on the market today, but in our practice we have discovered that there are a number of ESG approaches that can be used to manage this risk (see this blog post from earlier this year for more information). Further, by looking at the PRI’s research, we believe we can identify the most likely policy responses and manage these risks within our portfolios.

The most likely policy levers to secure an accelerated and just transition Source: UNPRI (https://www.unpri.org/climate-change/what-is-the-inevitable-policy-response/4787.article)

By mindfully choosing investments that incorporate Environmental, Social and Governance data in their investment process, we believe we can manage these risks. However, there are a number of different approaches emerging within the investment community, and they do not all have the same results! If you are interested in what we’re doing to manage these risks in our portfolios, or if you would like us to analyze your investments to see how exposed you are to these risks, click here to schedule an appointment!

President Macron of France addresses PRI In Person 2019

This week marked PRI In Person, the United Nations-Supported Principles for Responsible Investing’s (PRI) annual meeting. We weren’t able to attend since it’s hard to justify a Paris trip, but we wanted to share the remarks that President Macron made to open the meeting. We’re proud to be a signatory of the PRI, and to help our clients align their investments with the issues they want to work on.

If his remarks speak to you, and you want to get involved to add your voice and investments to the global effort to combat climate change, we’re here to help.

The role of Business in our society

The sustainable investing world has been on fire this week, after the Business Roundtable made a groundbreaking statement on the Purpose of the Corporation in modern society. For the first time, corporate leaders at the highest level are changing how they think, replacing the mantra of “maximize profits at all costs” (you’ll see the words ‘shareholder supremacy’ thrown around a lot) with ideals that acknowledge the impact businesses have on more of their stakeholders: customers, employees, suppliers, the communities they work in, and their shareholders. Read more

Igniting Impact

The new trailer for the film Igniting Impact debuted last week at the United Nations! If you would like to screen the full version of the film at an event, click here for the Igniting Impact Screening Info, or visit http://impactu.film/ to learn more.

Common Interests Supports the Investor Agenda on Climate Change

Common Interests is proud to be a part of the global investor network, including Amundi, California State Teachers’ Retirement System (CalSTRS), Legal & General Investment Management, Natixis Investment Managers, Mitsubishi UFJ Financial Group, and Sumitomo Trust Mitsui Asset Management, making up a record number of signatories to the Global Investor Statement to Governments on Climate Change.

Today, we are joining with investors from around the globe to urge world government leaders to step up their ambition on climate change and enact strong policies by 2020 to achieve the goals of the Paris Agreement, including phasing out thermal coal power and pricing carbon. 477 investors with $34 trillion (USD) in assets, a record number of signatories, are behind the urgent call-to-action to limit average global temperature rise to no more than 1.5-degrees Celsius.

“As institutional investors with millions of beneficiaries around the world, we reiterate our full support for the Paris Agreement and strongly urge all governments to implement the actions that are needed to achieve the goals of the Agreement, with the utmost urgency,” the investors wrote in a Global Investor Statement to Governments on Climate Change.

The statement comes as world government leaders gather at the Group of Twenty (G20) Summit in Osaka, Japan and as the United Nations Secretary-General António Guterres calls on “countries to build no new coal power plants after 2020.”

“Climate change affects all sectors of the economy and all countries,” said Christiana Figueres, Convener of Mission 2020 and former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). “It is the biggest and most urgent challenge currently facing the world. As we face a true climate emergency, limiting temperature increase to 1.5-degrees Celsius is necessary for survival, and achievable!”

Figueres added, “Investors have a vital role to play in providing the trillions in capital required to support the transition to a low-carbon and climate-resilient future. It is therefore hugely encouraging to see so many investors unite around such a clear and powerful statement to governments. They are showing a sentiment shared across the global community: exponential scale-up and acceleration of climate action is not a choice but a requirement, and represents our best opportunities for financial stability and economic prosperity.”

“As an investor in global markets, we are exposed to the increasing risks and opportunities that climate change presents to our portfolios, especially in Asia where the physical impacts of extreme weather events will be the harshest and of the greatest cost,” said Seiji Kawazoe, Senior Stewardship Officer, Sumitomo Mitsui Trust Asset Management. “To enable us to effectively invest in the necessary transition to net-zero carbon economies around the world, we have signed this statement to urge governments to take the actions needed to set us on the course to limiting global warming to 1.5-degrees Celsius.”

In particular, investors are asking world government leaders to:

Achieve the Paris Agreement’s goals

  • Update and strengthen nationally-determined contributions to meet the emissions reduction goal of the Paris Agreement, starting the process now and completing it no later than 2020, and focusing swiftly on implementation
  • Formulate and communicate long-term emission reduction strategies
  • Align all climate- related policy frameworks holistically with the goals of the Paris Agreement
  • Support a just transition to a low carbon economy.

Accelerate private sector investment into the low carbon transition

  • Incorporate Paris-aligned climate scenarios into all relevant policy frameworks and energy transition pathways
  • Phase out thermal coal power worldwide by set deadlines.
  • Put a meaningful price on carbon
  • Phase out fossil fuel subsidies by set deadlines

Commit to improve climate-related financial reporting

  • Publicly support the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) recommendations and the extension of its term
  • Commit to implement the TCFD recommendations in their jurisdictions, no later than 2020
  • Request the FSB incorporate the TCFD recommendations into its guidelines
  • Request international standard-setting bodies incorporate the TCFD recommendations into their standards.

“As shareholders, we are engaging with companies about their emissions, and how their Boards and their business plans are preparing them for a carbon constrained future,” said the California State Teachers’ Retirement System (CalSTRS) CEO Jack Ehnes. “We need the governments of the world to implement the Paris Agreement and regulate emissions on a clear timeline so that businesses know what the interim targets are and the timeline for their action.”

“Renewables are the cheapest energy source across more than two-thirds of the world today. The direction of travel is clear: the economics of wind and solar will continue improving,” adds Carola van Lamoen, Head of Active Ownership, Robeco, a global asset manager with $203 billion in assets under management. “Renewables are expected to outcompete new coal-fired power plants by 2030 almost everywhere. As investors, in our view the development of new coal power plants after 2020 puts at risk both the return on investment and the world’s chance of limiting global warming in line with the goals of the Paris Agreement.”

“As one of Australia’s largest industry superannuation funds, and a major institutional investor, we believe we have an important role to play in bringing about positive action on climate change to protect the retirement savings of our members,” said Deanne Stewart, Chief Executive Officer, First State Super. “This aligns with the view of regulators in Australia, and internationally, who have identified climate change as a significant material and foreseeable risk and have called for immediate action. While we are responding on behalf of our members, this issue will require a coordinated, collective and collaborate response from governments, business and investors to ensure that critical changes are made now for the long-term interests of our members and the community.”

The Investor Agenda Founding Partners strongly welcomed the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on 1.5-degrees Celsius which emphasised the urgency for average annual sustainable energy investments of up to USD $830 billion to transition to a zero-carbon and climate resilient global economy. The report also said that in order to achieve a 1.5-degree Celsius pathway, global net emissions need to decline by 45 percent by 2030 and reach net zero emissions around 2050.

The statement was drafted through a collaboration among seven partner organisations – AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP-FI – that are the Founding Partners of The Investor Agenda. Launched in 2018, The Investor Agenda calls on investors to step up action on climate change in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. Signing the statement is one of the actions investors can take in line with the policy focus areas of the agenda. The statement is published at www.theinvestoragenda.org.

About The Investor Agenda

The Investor Agenda has been developed for investors to accelerate and scale up the actions that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping average global temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. It has been developed by seven Founding Partners: Asia Investor Group on Climate Change,CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative. Visit www.TheInvestorAgenda.org for more information.