Profile Clim8 Optimistic investor Sustainable investment is big business, yet not all environmental, social and governance funds are born equal. Jane Simms meets Clim8 founder Duncan Grierson to talk about how ordinary people can invest to make a positive difference C lim8, the sustainable investing platform launched in April last year, has a deceptively simple proposition. Hannah Fry, mathematician, science presenter and bestselling author, summed it up in her voice-over for the companys advertising campaign that aired on Channel 4 in the spring. In breaks between prime-time programmes, such as Gogglebox, Grand Designs and Peep Show, viewers were treated to this succinct pitch: When it comes to investing, you dont have to choose between your head or your heart between success or happiness between your future or the planets future. With Clim8, you can invest with your finances and the climate in mind. This ringing endorsement by such a high-profile advocate of sustainability is pure marketing gold, as Duncan Grierson, founder and chief executive of Clim8, acknowledges. We are thrilled to be working with Hannah. With her scientific background, knowledge of the climate crisis and personal passion to make a difference, she is a perfect fit for Clim8, he says. Clim8, described by Fry as a force for good, is on a mission to dispel the myth that financial benefits and climate benefits are mutually exclusive. Yet so-called ESG (environmental, social and governance) investing is big business so dont lots of ESG funds offer this win-win option? They offer it, says Grierson, but many of their assertions amount to greenwashing a marketing tactic underpinned by no clear evidence of the benefits they claim for either the climate or the investor. Indeed, the scale of the problem is mind-blowing, he maintains. The worlds 20 largest ESG funds hold, on average, 17 fossil-fuel stocks in their portfolios. They also, by the way, hold gambling, tobacco, alcohol and weapons stocks. If you see yourself as a green or ethical investor, you might feel quite disturbed at the thought of that stuff being in your ESG fund. While the tsunami of money that could, ironically, pose a major threat to the planet, it is a clear opportunity for Griersons business. In September 2020, Clim8 research with 2,000 British consumers found 61% of respondents citing climate change as their main concern, with a similar proportion concerned about saving for the future. Yet 67% invested in savings accounts or pension funds that funded companies that damage the environment. Grierson describes consumers as potentially being hit by a double whammy. Not only are they unwittingly funding the very thing they are concerned about, but they are also likely to reap increasingly poor returns as investors begin to turn to genuinely green alternatives. In fact, when asked about obstacles to investing sustainably, 59% of respondents cited lack of knowledge, and 30% confusing terminology. The research gave Clim8 the mandate it needed. It put education, simplicity, and empowering ordinary people to make a difference through where they invest their money at the heart of its proposition. Users of the platform access it through an easy-to-use app, which, among other things, shows the carbon emissions and clean energy generated by the companies in their portfolio. Grierson explains: We could include other metrics such as tonnes of plastic being recycled, because we have lots of plastic recycling companies in our portfolios but, for the moment, were keeping it simple. Over time, we will add in more features. A key differentiator between Clim8 and other funds is that Clim8 is pure play, investing only in the E of ESG. Grierson believes the very term ESG is damaging: Sticking them together makes no sense, because they are all trying to do different things. It is a hazy and unregulated definition. He thinks the way forward is for each company to have a climate-impact rating, which would be administered by a third-party ratings agency. Rather than simply screening out damaging companies, Clim8 proactively seeks out businesses whose core products and services have a positive impact on climate change and sustainability. It focuses on six categories or megatrends, as Grierson calls them: green energy, clean mobility, climate technology, sustainable food, water systems, and the circular economy. Examples of investee companies are leading wind-turbine manufacturer Vestas; rsted, a Danish energy company that has switched from fossil fuels to renewables; and Schneider Electric, 18 Impact ISSUE 39 2022_pp18-21_Profile.indd 18 23/09/2022 14:57