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UBS targets three climate themes for growth in next decade (Podcast)

. . . . UBS waded into the sustainable investing waters last week with a special report targeting 10 themes for environmental, social, and governance (ESG) investors, with three leaping out to us. In a Callaway Climate Insights podcast with Robert Powell, Sustainable Investing Strategist Amantia Muhedini of UBS Global Wealth Management said diversity in boardrooms, plant-based meat products, and the electrification of transport will be major drivers of investment and innovation in the next decade, as companies and consumers dramatically change how they operate.

The trend toward electrification in transport, which has been going on for a while, will accelerate, and UBS expects electric vehicles to account for at least 40% of global new car sales by 2030. What’s more, UBS expects growth in pure battery electric vehicle sales to reach a 30% compound annual growth rate to $800 billion to $1 trillion annually by 2030. . . .

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Queen gets glittering windfall from sale of wind farm leases

. . . . She who owns the seabed gets the spoils. Yes, Queen Elizabeth II, because she holds exclusive rights to lease the undersea assets around much of the British Isles, is set to pocket about $140 million after an auction of wind-turbine plots off the coasts of England and Wales, reports The Guardian. The cash, which considerably exceeded expectations, will accrue to the Crown Estate, which manages the 94-year-old monarch’s property portfolio, with another $412 million going to the central government. UK Prime Minister Boris Johnson said in October the island nation plans to power every home with wind energy by the end of the decade, creating several thousand new jobs in the process. The area which reportedly attracted the biggest bids was a section of the Irish Sea between northern Wales and northwest England. Visitors to the area can attest to its breezy conditions. . . .

. . . . While the American government is sending a slew of stimulus checks in an attempt to revive its Covid-crushed economy, South Korea is trying something else: a $43.2 billion plan, mostly funded by corporations, to build the world’s largest wind power plant by 2030. The project, reports Reuters, is a major component of President Moon Jae-in’s efforts to encourage an environmentally friendly recovery from the COVID-19 pandemic. The country’s Green New Deal, initiated last year to curb reliance on fossil fuels in Asia’s fourth-largest economy, aims to make the Far East nation carbon-neutral by 2050. Moon’s office said the project would provide up to 5,600 jobs and help boost the country’s wind power capacity to 16.5 GW by 2030 from 1.67 GW now. Interestingly, the vast majority of the funding is coming from private industry, including companies such as Doosan Heavy Industries and Hanwha Engineering. This type of targeted Covid recovery plan, wrapping clean energy investment into economic recovery, could be a model for the Biden Administration as it seeks expand its climate plans outside of the areas of regulation and executive orders. . . .

. . . . When just making your own climate pledge isn’t enough. Scottish Widows on Monday said it would halve the carbon footprint of its 170 billion pounds ($234 billion) in investments by the end of the decade and achieve net zero by 2050. In a new year in which most of the climate pledges coming in have moved ambitiously to a 2030 time frame from 2050, this one seems more cautious, despite the unit of Lloyds Banking Group loudly claiming it’s the first major UK pensions and insurance provider to do so. The company also called out its competitors, saying a massive, 2.17 trillion-pound gap remains until the entire industry is committed. Scottish Widows said it supported shorter-term goals, such as 2030. But 10 years still seems a long time for going only halfway. Norway’s sovereign wealth fund, for example, said last week it has already sold off all its fossil fuel positions last year, at a big loss. A lot of these pension and investments positions sit in passive funds, so it will take time, for sure. But now that the press release is out, the hard part begins. . . .

. . . . Speaking of sovereign wealth funds, a new report out today from the International Forum of Sovereign Wealth Funds found that only eight out of 34 have more than 10% of their assets invested in climate strategies, such as renewable energy, according to the Financial Times. When you’re talking $8.6 trillion in total assets, that’s a lot of upside. Perhaps a group discount to Callaway Climate Insights? . . .

. . . . And finally, our condolences to the family of George Schultz, the former U.S. Secretary of State and Republican grandee, who passed away over the weekend at 100. Shultz gave an interview to Callaway Climate Insights’ Marsha Vande Berg just three weeks ago, in which he offered President Joe Biden advice on fighting climate change just before his inauguration. Like many, Schultz favored a carbon tax. Like few, he proposed it years ago. Here’s to him. . . .