Interview with Duncan Grierson: Founder and CEO of Clim8 Invest

Our blog recently covered green finance and the necessity for corporations to take on responsibility for managing the climate crisis. In addition to established organisations such as Goldman Sachs allocating dedicated budget to ESG issues, a number of fintechs are setting out to revolutionise the financial service industry and ensure a commitment to sustainable economic development across the world.

Backed by the British Business Bank, one such fintech, Clim 8, helps investors put their money into a targeted portfolio of clean energy and sustainable companies. FSP caught up with CEO Duncan Grierson to learn more.

1.      What are your short and long term goals for Clim8?

In the short term, our goal for our investment platform Clim8 Invest is to offer consumers an easy way to invest in companies that are making an impact on climate change. In the long term, we aim to build out our community to hundreds of thousands of people who are able to make an impact on climate change with their savings.

2.       How has sustainable investment developed over the last 10 years?

Over the last 10 years, interest in sustainable investment has increased dramatically, in particular in the last couple of years. We are already seeing the potential for ordinary people to be a powerful voice and force for change, which has been championed by influential spokespeople like Greta and David Attenborough.  

We are seeing more and more products and services facilitating sustainable investing in the right kind of markets.  Society is more than ever before aware of its responsibilities, hence why  the impact of environmental, social and governance issues, delivered via long term sustainable investing is becoming an increasingly important consideration.

3.      With the UK’s concern over climate change at an all-time high, why do you think there is still some hesitance regarding consumers investing sustainably?

Historically, people have associated sustainable investing with a lower rate of return. However we believe the opposite can be true. Those companies working to avert climate disaster, which are well run and have the right governance are seeing tremendous interest.

As more companies focus on averting the climate crisis and society moves away from polluters, investment activity is likely to increase. As more people use these more sustainable products, then it seems inevitable that these companies will also be great investments and only go one way. Up.

The threat of climate change requires realigning investment profiles towards sustainability. There’s always an element of risk when investing. Right now sustainable investments are performing well and it’s difficult to see that trend changing. If my money was in portfolios that included highly polluting industries, I would be concerned.

4.      How can we better educate the public regarding the impact of their financial decisions?

We need to do a better job of educating people about the impact of where their money is invested. This can be done through the media and online platforms, providing high-quality and transparent articles that inform consumers.

5.       What steps do the banking industry need to take to meet their ethical and environmental responsibilities?

Historically, banks have heavily funded the fossil fuels sector, however they are starting to move in a more sustainable direction. In addition, the fund management sector is incredibly opaque and it is very difficult to find out exactly where your money is invested. The biggest initial step would be to increase transparency of where banks and financial institutions are investing money. 

6.       How can we combat the harm caused by greenwashing?

Some companies claim to have green credentials but do nothing to deliver a positive impact. Ultimately, these companies will come unstuck as people see through the facade and move on to genuinely sustainable options.

People who want to assess how sustainable a company is should look beyond the words and focus on the actions of the business. How do they operate and what is their supply chain? What are they doing to combat climate change? Consumers can have an impact by asking questions.

As sustainable investing continues to gather momentum, companies without a sustainable strategy should be worried about their long-term future. 

7.       Which countries do you think are leading the way when it comes to green finance?

Europe has been leading the way on green finance by creating an ESG framework and taxonomy that will deliver a practical set of guidelines. Something that we’re working towards in the UK.

8.      How do you think the pandemic has altered the public’s interest and priorities in sustainable finance?

The pandemic has accelerated public interest as we have all been forced to work from home and think about how we live and what we consume on a daily basis. Consumers are reflecting more deeply about being environmentally friendly. Eating less meat, walking and cycling, using public transport, reducing flying and staying away from fast fashion are all clear trends.  Consumers are more aware of where their money is being used and we are seeing more and more products and services facilitating sustainable investing in the right kind of markets.  

9.      What do you consider to be the primary obstacles in green finance innovation?

We are at an early stage of our sustainable future and as such measuring the true impact of individual companies is difficult. Providing good data and ratings around impact are important. 

10.    What companies do you think will be worth investing in?

Many companies continue to exploit the Earth while others are trying to fix the urgent environmental issues we are all facing. It’s important to take a closer look and make an impact by investing savings in these sustainable companies. 

Think carefully about the types of companies and industries that you want to support. Do you care if they are a force for positive change in the world? And from an economic perspective, are these businesses likely to grow in coming years or die out as industries focus on becoming sustainable? You should also consider diversification (i.e. different assets, geographies, etc) when considering where to invest your money.

For example, there is a tremendous opportunity to invest in the electrification of transport, as the world moves away from polluting combustion engines for cars and trucks and other forms of mobility. This is a megatrend which offers outstanding long term growth opportunities as the entire supply chain moves to electric.

To learn more about Clim8 Invest, head to the website here.