This article features as part of IFA Magazine’s celebration of World Earth Day.
World Earth Day has a different meaning to everyone and in the financial services community, peoples opinions on what it means to ‘invest in our world’ differ greatly.
There are some who argue that ESG and sustainable finance are not of interest to their clients, whilst other believe investment in sustainable projects is the way to support the worlds needs.
The concept of investing in sustainability is a passion that the Chief Investment Officer at SFC Capital, Joseph Zipfel is throughly behind. However, he believes that we need to go a step further to see truly positive results.
He said: “Our species faces many challenges – from habitat loss to fossil-fuel usage to food insecurity. We’ve known about these issues for years, but change has been slow. Now, we’re tasked with making radical changes in a short space of time to stop things from getting worse.
“We can’t just rely on government action or public initiatives to solve these problems. We need the financial industry to step up.
“That’s what #investinourplanet means to me – but there’s an important nuance to make. It’s not just about investing in businesses that say the right things. We need action – that means backing companies that put sustainability at the core of their culture and business model.”
Zipfel’s belief is that sustainable investment can only be achieved, and thus be beneficial to the planet, if sustainability is at the core.
Financial and investment advice professionals have the power to ensure this is the case and Zipfel believes that backing sustainable, emerging technologies is the way to achieve a greener society.
He said: “I think one of the best ways the industry can drive change is by backing new and emerging technologies. By driving this change, we are giving individuals the tools to take responsibility for their impact on this planet, making them part of the wider solution by giving them the tools to change.
“That’s why we make sustainability part of every investment decision we make. We ask ourselves, how does this company fit into the future? How does it contribute? What role does it fulfil?
“That could result in investments that are directly geared towards tackling sustainability challenges, like Quantum Waste, which is making waste management more environmentally friendly.
“Or it could be a company like The Seam, which is an online platform for clothing repairs and alternations. That’s got a very practical use case – but has the added benefit of reducing fashion waste by encouraging people to repair things instead of throwing them away.”
The advice to back emerging technology and invest in sustainability is a mantra that Zipfel not only preaches but also attempts to execute in his own work.
SFC capital have taken to investing in early stage businesses that encapsulate the sustainability ethos that they wish to project.
He said: “We invest in early-stage businesses. That can quite literally mean extremely talented, smart people with very limited resources working out of their basement, or it could mean a more established University spin-out. The unifying factor is that we believe every single one has massive growth potential.
“We work with those businesses, mentor founders, and draw on our network to help them grow. At a certain point, we will sell our investment to a later-stage venture capital firm, private investor, or otherwise. But while the details will depend on the deal, the bottom line is that we’re playing the long game.
“That timeframe means sustainability must be a part of every single investment decision. We have to be confident that a business model is compatible with a more sustainable future, otherwise where’s the value for our investors?”
The attempt to invest in sustainable and environmentally friendly businesses is a stepping stone to achieve net zero which many companies are striving for.
This move to net-zero has lead to changes in the way SFC Capital operate with attempts at lowering their carbon footprint being made but Zipfel understands bigger changes need to be made at the highest level in order to achieve a true impact.
He said: “As a ‘virtual-first’ business our carbon footprint is minimal. When we do meet in person, many team members cycle rather than driving or catching the train. Still, like many people today, I’m acutely aware of the waste we produce and my own impact on the planet.
There’s a lot we can do as individuals, but ultimately, we’re going to need clever companies to come up with mass-market solutions if we want to tackle the biggest issues.”