Four ways to invest in planetary resilience

Tribe Impact Capital says investors can make an impact in circularity, pollution prevention, natural capital preservation and clean water provision

Impact wealth manager Tribe Impact Capital has published a note outlining four key investment areas that allow investors to support planetary resilience and where investment opportunities can be found.

Planetary resilience makes up one of three key areas Tribe Capital consider within its range of resilience-based investment opportunities, the other two being infrastructural and human resilience.

In the note, Tribe highlighted that within the World Economic Forum’s top 10 risks for the coming decade, half are environmental risks, with humanity facing “the twin crises of anthropogenic climate change and unprecedented biodiversity loss”.

“Rather than respecting and operating within nature’s limits, we have been exceeding them and undermining the resilience and regenerative capacity of the Earth system,” the wealth manager said.

However, as investors we have the opportunity now to “build back better” by directing capital and stewardship activities “towards solutions that can drive systems change and transformation”.

When it comes to planetary resilience, Tribe identified four key areas where investors can make a real impact: circularity, pollution prevention and control, natural capital preservation and clean water provision.

Circularity

The first of these, circularity, is centred around the idea of “repairing and refurbishing products, reusing and recycling ‘end-of-life’ materials and diverting organic waste from landfill in favour of composting”.

“By reducing demand for virgin materials and returning nutrients to soils, these kinds of circular practices can help natural systems to regenerate and recover from overexploitation and degradation,” Tribe said.

The wealth manager identified investment opportunities within industries concerned with the reclamation and recycling of plastic, metal, paper and food waste, the production of recycled-content and recyclable materials for use in packaging, construction and textiles, as well as those providing refurbishment or repair services.

Pollution

The second issue of preventing and controlling pollution requires the reduction and better management of waste by industries across the spectrum.

Tribe noted: “Not only does toxic pollution undermine the resilience of sensitive marine and terrestrial ecosystems, according to The Lancet, exposure to contaminated air, water and soil resulted in 16% of all global premature deaths in 2015.”

Investors can support this theme by allocating to companies that offer waste treatment services, environmental remediation, clean-up services and pollution testing services.

Other options include utilities that provide sewerage services, and pollution control technologies like catalytic converters and scrubber systems which help eliminate harmful air pollution from industrial processes and transportation.

Natural capital

The third area, natural capital preservation, is key to avoiding further biodiversity loss, and although investment opportunities are harder to find here, Tribe said there are a number of companies that operate “at the forefront of sustainable land use”.

“Examples include companies involved in sustainable forestry, natural forest restoration and/or regenerative organic agriculture,” it said. “These activities help to regenerate degraded land, support biodiversity and draw carbon down into trees and soils.”

Clean water

Finally, Tribe looks for companies addressing the growing problem of water scarcity by expanding access to safe and affordable water that is sustainably managed and conserved.

Investment opportunities in this theme include the extension and upgrade of global wastewater treatment and water distribution infrastructure, as well as innovative technologies enabling water reuse and water efficiency.

Tribe added: “In addition to sustainable water utilities, technologies like closed-loop water systems for industrial cooling, micro-irrigation technologies to reduce agricultural water use and water-efficient bathroom and kitchen appliances are all investible solutions.”

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Natasha Turner

Natasha is global deputy editor at ESG Clarity, part of the Bonhill Group, and has been a financial journalist for six years. She has been shortlisted for Story of the Year and Investment Journalist of...