Climate impact investing

Many companies still aren’t serious about climate change.

Even though the Paris Climate Agreement now dates back almost seven years to 2015, many companies hardly make an effort to cut emissions.  Our data analysis shows that over the time period 2017 through 2021 on average around one-third of publicly traded US companies saw the carbon intensity of their operations increase from one year to the next. In essence, these companies not just fail to cut overall emissions, they actually emit more for each $ of sales or revenue.

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Companies with a market capitalization greater than $100m. Analysis based on data provided by Impact Cubed.

Track record vs. targets

As more and more companies publish targets for emissions, these targets stand in stark contrast to the track record of recent years. The level of emissions of publicly traded US companies is essentially flat over the period 2017 through 2021. With travel for work or pleasure being brought to a virtual standstill in 2021 due to Covid-19, there is little doubt that a “normal” the year 2021 would have seen significantly higher emissions.

Many companies still aren’t serious about climate change.

Companies with a market cap > $100m. Analysis based on data provided by Impact Cubed.

A lot of hot air

As climate change hits home with ever-increasing vigor through heat waves, wildfires, and flooding, we are fed a continuous flow of pledges and statements from companies that provide for short bouts of optimism. But checking these pledges against actual numbers makes for a harsh reminder of the monumental task at hand.

Here are just a few examples:

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It’s all about transparency…

As we write in our manifesto, private enterprise is by far the biggest lever to tackle climate change. Yet, for and within corporations there are difficult equations, and conflicts of interest abound. How to best serve various types of stakeholders? How to drive profit and value creation while maximizing efforts to cut emissions? And top managers ask themselves how to achieve the best possible standing with the Board of Directors.

…and accountability

Stakeholders, and especially shareholders, must step up to the task. They must demand management to deliver on transparency, devise ambitious emission reduction goals, and establish accountability. Ziggma’s mission is to support shareholders in this endeavor.

Naturally, as professional analysts, we do not claim to have a crystal ball to call the time of a price bottom. But we will venture to say that unless things get really ugly, there is a high probability that we are close. Prudent investors will invest sequentially to benefit from cost-averaging in the event that the price of the ETF falls further.

We seek to make a sizeable contribution to empowering shareholders to drive action on climate change. Here’s how we do this:

  1. Analysis: Climate Score on companies
  2. Transparency: Present companies’ track records and goals
  3. Accountability: Check progress against targets over time
  4. Action: Help shareholders stay informed on shareholder votes on climate change measures

Sign up to Ziggma to invest with an impact on climate change.

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