A fund for the climate
The Big Issue Group and Aberdeen Standard Investments are launching a new kind of fund: one that will invest only in companies whose core purpose is to build the technologies that will solve the climate emergency and create a cleaner, more sustainable, world.
From renewable energy and electric vehicles to green buildings and remote working technologies, the Multi-Asset Climate Solutions (MACS) Fund puts your savings to work financing the solutions to climate change.
It’s a fund focussed on what we can do, rather than what we should stop doing.
“We are at a unique stage in our history,” Sir David Attenborough says in BBC documentary A Life On Our Planet. “Never before have we had such awareness of what we are doing to the planet, and never before have we had the power to do something about that.”
Aberdeen Standard Investments shares The Big Issue Group’s vision for a fairer, more inclusive financial system that makes a positive impact on the planet and society.
Nigel Kershaw OBE, chair of The Big Issue Group, says: “We created the MACS Fund to put the power of finance behind the youth climate movement. It makes it possible for anyone with savings – of any age – to invest not only for a financial return, but an environmental one too.”
The fund is focussed on finding companies that will make the biggest difference to climate change. Crucially, ASIsearches for companies where more than 50 per cent of their revenues come from climate solutions. Currently less than five per cent of the world’s listed companies fit the bill.
This makes it very different from most ‘ethical’ or ‘sustainble’ funds in the market. They hold ‘greener’ mainstream companies like retailers, banks and tech companies. This fund is strictly aimed at activities directly involved in solving the climate emergency.
Fossil fuel free
It also has strict ‘exclusions’. It won’t invest in any companies involved in destructive activities such as fossil production, nuclear power, cement and steel production, meat and dairy production, or which have high carbon emissions.
While the fund is designed to drive environmental change, it recognises that the health of the planet and the people who live on it are linked. Therefore, it seeks to avoid investing in companies involved in activities which harm society such as child labour, breaches of human rights, and the production of weapons or tobacco.
What about the financial returns of social investing?
The latest Good Investment Review shows that sustainable funds have outperformed the market average over the last 10 years and particularly throughout the coronavirus crisis.
As the world races to meet the commitments of the Paris Climate Agreement – which aims to avoid the most devastating effects of climate change by keeping warming below 2οC – the companies providing the solutions are expected to grow.
The environmental and financial performance of the MACS Fund benefits from a new independent Climate Advisory Group. It is made up of respected environmental, academic, policy and finance experts as well as representatives from The Big Issue Group and Aberdeen Standard Investments.
One of its members is 24-year-old Jouja Maamri, an impact investing specialist and climate activist. She says: “This fund allows individuals to take targeted action. Your money is your vote. By choosing to invest in green companies, you’re saying you’re not OK with the status quo.
“You don’t have to be a big investor, just have some savings. You are part of a bigger collective – when lots of people mobilise whatever money they have for good, it can bring about change on a corporate level.”
As pure as possible
John Fleetwood, of fund research specialists 3D Investing, helped to develop the fund’s methodology. He says: “It aims to be as pure as possible, something that makes it stand out in the world of sustainable investing. It invests in areas that will actually make a difference towards climate change like renewable energy, green buildings and technologies that reduce energy consumption.
“It also goes much further than other ‘ethical’ funds in ruling destructive industries out. For example, not only does it avoid direct exposure to fossil fuels, it also excludes any companies that provide more distant support services such as drilling equipment or oil rigs.”
‘Be part of the solution not the pollution’
The fund follows the launch of The Big Exchange, which – co-founded by The Big Issue Group – is the UK’s first online investment platform to only invest in funds that make a positive impact on the planet and society. It aims to create a new financial ecosystem that is fair and accessible to all.
Kershaw says: “I saw the passion of the young people protesting against inaction on climate change and thought, ‘there needs to be a way that they can take action themselves.’
“I stayed up all night writing down ideas for a fund focused solely on combating climate change. The MACS Fund wasn’t part of a big strategy. It was simply an instinct and I knew we had to make it happen.”
He added: “One of the banners a young person was holding up in the climate strikes really struck a chord with me. It said: ‘Be part of the solution, not the pollution.’ That sums up the aim of this fund so well.”
The fund is also rooted in the same philosophy as The Big Issue’s #TodayForTomorrow campaign. Led by Big Issue co-founder Lord John Bird OBE, it is pushing for a Wellbeing of Future Generations Bill to be passed into law. The bill aims to help tackle threats such as the climate crisis, poverty and pandemics, with the needs of future generations in mind.
Doing multiple good and social investing with your money
A fifth of the net revenue from the MACS Fund will be reinvested back into The Big Issue Group to help support its social mission.
Risk warning: Capital at risk. The value of your fund can go down as well as up. Tax treatment depends on an individual’s circumstances and may be subject to change.