In this content I am presenting my personal opinion as an active private investor. This content is not intended to provide investment, financial, accounting, legal, tax or other professional advice and should not be relied upon or regarded as a substitute for such advice.
10 books to read if you want your money to work for the climate
“Impact investing”, “ESG investing”, “Socially responsible investing”, “Sustainable investing”… An alphabet soup of buzzwords – or better yet, buzz concepts. But what do these terms really mean? Are they really distinct from one another?
If you want your money to work for the climate and the planet, you might find yourself overwhelmed trying to figure out where and how to start. A good first move is to get informed about the climate change process, then to learn about the investment opportunities that could counteract society’s negative contribution to a warming planet. But, as the number of books about climate change and sustainable investment steadily grows, one can easily get lost amidst an unending stream of information.
In this blog, we highlight 10 books that can help you understand the what, why, and how for investing in a better planet (and better returns).
Understanding climate change and how to face it
Let’s start with books on climate change itself.
- The Water Will Come: Rising Seas, Sinking Cities, and the Remaking of the Civilized World by Jeff Goodell
The Water Will Come is an absolute must-read for anyone who cares about the climate crisis, which is already having a massive impact on investments. This book outlines the relationship between climate change and rising sea levels, and it highlights the extreme and urgent need for action. Frontline reporting from Goodell, a renowned and well-informed environmental journalist, makes the book a lively read.
- The Future We Choose: Surviving the Climate Crisis by Christiana Figueres
In this book, Christiana Figueres and Tom Rivett-Carnac—both of whom led negotiations for the United Nations during the historic 2015 Paris climate accord—bring to life two distinct scenarios for our planet. In one scenario, they paint a picture of what life would look like by 2050 if we fail to meet the Paris climate targets. In their more optimistic scenario, they describe how a carbon neutral and regenerative world could come to be. How we address the climate crisis — arguably the most urgent issue humankind has ever faced — will determine in which of these future scenarios our children will live. The Future We Choose provides various options and actions for governments, corporations, and individuals to confront the climate crisis head-on.
- How To Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need by Bill Gates
In this best-seller, Bill Gates explains in everyday language the climate problem, its consequences, and its possible solutions. The founder of Microsoft and billionaire philanthropist identifies key actions to help reduce the world’s annual 51 billion tons of carbon emissions. Gates describes his climate-action investing journey, shares his blueprint for big-picture solutions and “green premiums,” and explains how to work towards net-zero goals now.
Since 2016, Gates and investors like Jeff Bezos, Michael Bloomberg, and Richard Branson have funded Breakthrough Energy Ventures, an organization that seeks new approaches for stopping climate change—whether through new nuclear technologies, carbon capture from concrete, or modeling of the energy grid.
The intersections of climate and finance
With a baseline understanding of climate change, a savvy investor might then want to go further into learning about climate-specific investment. To ground climate change in economics and investing for profit, the following books are must-reads.
- Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Ratworth
Unlimited growth is a standard rule for many financial and economic models. But can society and the environment actually absorb such unfettered growth? Kate Ratworth argues that traditional economic frameworks need to undergo a fundamental shift, moving from wasteful extraction to more sustainable, regenerative, and equitable systems. In her book, the renowned Oxford economist provides groundbreaking ideas for how to implementing change while generating profit in the 21st century. Through an amusing and resource-rich narrative, Ratworth drills down into complex economic concepts with simple explanations, and she shows how society could achieve financial profits without exhausting natural resources and ruining the planet. Using a doughnut metaphor – with concentric circles that represent Earth, society, and the economy – her model strives for balance and explains how a modern society can fulfill its needs while maintaining a stable climate. Ratworth’s suggestions are backed by practical examples and statistics, and she offers a powerful and creative explanation of modern impact investing.
- Impact: Reshaping Capitalism to Drive Real Change by Sir Ronald Cohen
Sir Ronald Cohen’s book is a fantastic option for anyone seeking a detailed explanation of the impact investing concept, and how it differs from Environmental, Social, and Governance (ESG). Cohen, the father of British venture capital and founder of Apax Partners, a successful private equity firm, is one of the world’s best-known impact investors. In Impact, he describes his journey through investing, as well as the role investments can play in driving social and environmental change. With anecdotes and case studies from all over the globe, Cohen highlights how impact investors can strive for positive change in their actions. (Additionally, if you buy the book, all royalties are donated to impact charities.)
- Pure Climate Stocks in China: Once in a lifetime opportunity or poisoned pill?
- Getting the timing right on inflation protection
- Real Impact: The New Economics of Social Change by Morgan Simon
Morgan Simon is both the founder of the impact investor network Toniic and the founding partner of Candide Group. Drawing from her experience, she wrote Real Impact to explain the world of impact investing and her personal journey through it. Simon highlights the key problems she sees in the impact investing, charity, and conventional finance worlds. Then, she goes on to propose a framework to help investors ask the right questions. Simon’s book is both very inspiring and an easy read.
Strategies for the retail investor
The books above can help readers understand how climate and finance are interconnected. Moreover, they provide critical context for understanding impact investment, arming investors with the knowledge to know which questions to ask.
For this next section, the selected books contain a variety of tips, tricks, and anecdotes that investors can enact to give their money a greater positive impact.
- The Clean Money Revolution by Joel Solomon
In The Clean Money Revolution, entrepreneur and impact investor Joel Solomon argues that money can be a powerful tool for good in the world. The book explains his “mission-based” approach to investing. It’s a memoir full of personal anecdotes, describing Solomon’s fascinating life and his history of investment in successful brands such as Stonyfield Farms.
- Activate Your Money: Invest To Grow Your Wealth and Build a Better World by Janine Firpo
Janine Firpo has worked for Hewllet Packard, Apple, the World Bank, and the Bill and Melinda Gates foundation, deploying projects for positive social change in Africa and Asia. As an impact investor, she supports women-led businesses. Leveraging her impressive background, Firpo wrote Activate Your Money as a women-centric guide to investment with positive impact. This book, however, stands as an important reference for every impact investor, regardless of gender. The author guides her readers through impact investing options across asset classes, whether portfolios, green bond ETFs, or venture funds. She also discusses methods for picking a financial or robo-advisor that specializes in ESG. As if the book were not enough, it’s accompanied by a website full of useful templates, worksheets, and links to social-media-friendly fireside chats on Zoom and Facebook.
Firpo’s book will educate, engage, and empower, whether you’re simply putting a toe in the water (1% ESG), running a head-to-head portfolio (50% ESG), or diving into the deep end of a truly focused portfolio (100% ESG).
- Making Money Moral: How a New Wave of Visionaries Is Linking Purpose and Profit by Judith Rodin and Saadia Madsbjerg
In Making Money Moral, Judith Rodin, the first woman president of the University of Pennsylvania, and Saadia Madsbjerg, a former managing director at the Rockefeller foundation, explore how the impact investing movement has grown. The book highlights various impact investment case studies and innovations, and it is rich in examples — from the first $15 million sustainable-oceans “blue bond” issued by the Seychelles, to new exchange-traded funds focused on gender equality and racial equity, to the nonprofit Low Income Investment Fund’s $100 million municipal bond issue. Rodin and Madsbjerg also include interviews with impact investment thought leaders, entrepreneurs, and investors from families, and institutions like Amundi. Importantly, this inspiring read includes eye-opening evidence that ESG is a stronger indicator of bond performance than credit ratings.
- Invest for Good: A Healthier World and a Wealthier You by Mark Mobius, Carlos von Hardenberg and Greg Konieczny
Published in 2019, Invest for Good outlines a modern take on impact investment. The authors have managed to craft a fun and informative read, juggling the difficult balance of explaining complex concepts in simple language while also making readers laugh. A key takeaway from Mobius, Hardenberg and Konieczny is that socially responsible investments are the future of all investment techniques. With this in mind, they provide a practical guide for productive investment ideas, mapping a path for simultaneously earning money and contributing to a meaningful cause.
As a bonus, don’t forget to read our previously published review of Alice Ross’ book: Investing to Save the Planet.
Summing it up…
Although a single, unified guide for investing in stocks that benefit the planet unfortunately still doesn’t exist, these books – which include impact, ESG and SRI investing approaches – can offer investors valuable insights. However, it is crucial that investors remain highly critical about environmentally-friendly claims, to ensure that any investment thesis and portfolio truly contributes to a cooler planet. With this goal in mind, Pure Climate Stocks methodology was based on climate science, and it focuses on channeling investments into industries and solutions that are critical for building a net-zero future.
*If you want to learn more about how Pure Climate Stocks might be the climate impact investing solution you’ve been looking for, come and join us in one of our free webinars.
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Array Technologies is a crucial part of the global solar energy project value chain. The US company is the second-largest supplier of solar tracker systems worldwide. Array had a place in the sun after it went public in October 2020 and delivered solid profits throughout 2020. But the supply chain disruptions following the post-COVID recovery first slashed revenues and in a second wave shot up material costs and left the company in the red. The consequence: the company is still burning cash and the stock price crumbled.
The company is accordingly on the ground, even if the first rays of hope appear: The pandemic is not over, but Array had a capital infusion from Blackstone, acquired a competitor, and has taken measures to increase margins.
Nevertheless, the Array share remains primarily a bet on whether Array will find its way back to its old strength or whether it might not survive this crisis.
But that is exactly the reason why the Array share could be interesting: the turnaround.
With decreasing costs and fewer delays in shipping, the stock could also rise again. The stock is currently valued at around 1.6x Array’s sales, which is a quarter of the price-sales ratio one year ago.
So let’s find out whether an investment could currently be worthwhile. Is the Array share too expensive? Or should one buy Array shares right now? I try to approach these questions.
You will find out how the business model works and how good it is, how solvent Array is, what the current strategy looks like, what the opportunities are and where the risks lie. Have fun!
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