The most obvious way to have an impact on the environment or society is to change our consumption behaviour - from meat lover to vegan, from car to bike, from bottled water to tap water.
We can also use our money through investing to make a change - and the impact of that can be significant. Our mission at Cooler Future is to help investors maximise the positive climate impact of their investments
Company impact is the change that company’s activities have generated through their operations or products.
Direct investor impact means the amount of company impact generated that can be directly linked to the amount invested.
Indirect investor impact cannot be directly linked to your investment, but is essential nonetheless, e.g. in forcing companies to change how they do business
Listed companies generate a majority of global emissions and are therefore key to any decarbonisation effort towards a net zero economy. There are several ways to generate a positive impact as a climate activist investor in public assets.
Cooler Future’s data-driven impact analysis can help you assess the impact of your current investments. We can also suggest improvements to current portfolios with respect to impact, or construct new impact portfolios from scratch.
A public company can change its operations or products to cut down on carbon emissions e.g. by producing renewable energy instead of fossil energy. The company impact is the amount of reduced emission.
When more investors want to buy shares of the company than sell, its stock price goes up making it cheaper and easier for the company to raise capital and therefore reach future climate targets.
The company's impact can be attributed to the investors or shareholders as indirect impact in the amount of their holding. The investor can also generate direct impact as a shareholder by voting and engaging at general meetings.
Divestment is the withdrawal of capital in certain companies or sectors by selling equity making it harder for these companies to raise new capital and fund projects.
Collective engagement can put pressure on public companies to change their processes, measure and address their emissions or set more ambitious climate goals.
Depending on the sector and company, different strategies can lead to higher impact.
Whereas for very carbon-intensive sectors like fossil fuels, divesting and investing in renewables can have an immense impact.
For other sectors, collective engagement in traditional companies, e.g. in the form of a fund where asset managers follow ESG policies might lead to bigger impact.
Direct green projects are financed with project finance, which is the long-term financing of infrastructure and industrial projects. Direct projects have a clear beginning and end like building a wind farm or a solar power plant.
Compared to public assets, investing in direct green projects is also more risky and less liquid (typically a 3-5 year investment to develop the project).
Stay tuned! 💡 Cooler Future is currently looking into this asset class, and will offer impact analysis services within the near future. Please contact us for more information
When building a new solar park or wind farm in a region, the company impact would be the reduced emissions when switching from fossil fuels to renewables in the regions energy production.
In contrast to investments in public assets, the invested capital directly flows into the project and entitles you with a % holding of the project. The investor impact is therefore direct based on your share of ownership.
Direct green projects usually don't enable you to vote or engage in the project directly other than through your capital. The investor impact is therefore solely based on the investment.
In private assets, impact per invested amount can be even greater than in publicly traded assets. Private companies are on average smaller than listed ones, and investors have greater possibilities for direct communication with management. Also, in many cases the co-operation between investor and company begins at an early stage, when the invested capital has a significant effect on the development of the company
The difficulty with assessing impact of private companies is the availability of reliable data. However, the data is constantly improving, both in terms of quality and availability
Stay tuned! 💡 Cooler Future is currently looking into this asset class, and will offer impact analysis services within the near future. Please contact us for more information
Similar to a public company, a private company's impact is generated within its existing business or through new technologies that e.g. reduce carbon emissions. The company impact would then be the amount of reduced emission.
Different to investments in public assets, investing in private companies usually means buying shares directly from the company. The additional capital can then be used by the company to achieve its climate targets.
The company's impact can be attributed directly to the investors according to their holdings in the company or fund. The ability to engage actively depends on the form of the company and the amount of the investors holdings.
We know that the world of sustainable investing is changing fast and keeping up to date with everything can be tough.
That's why at Cooler Future, we aim to stay on top of the latest on sustainable finance so we can serve you better in your impact measurement and actions.
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