Green Dream with Triple Point: Supporting companies in energy efficiency

Jonathan Hick and Lindsay Smart discuss net-zero roadmaps and renewable energy

Companies have ceased trading due to higher energy costs but that doesn’t need to be the case, according to Jonathan Hick, investment director, and Lindsay Smart, head of sustainability, at Triple Point.

In this Green Dream video interview, the pair discuss how they help fund holdings with net-zero roadmaps and improving energy efficiency amid increased cost-of-living.

Watch the full video interview above and read the transcript below.

NK: Hello and welcome to the Green Dream. I’m Natalie Kenway, global head of ESG insight at ESG Clarity. And today, I’m delighted to be joined by Lindsay Smart, head of sustainability, and Jonathan Hick, investment director at Triple Point. Thank you both for taking the time to speak to me today.

LS: Nice to see you, Natalie.

JH: Pleasure to be here.

NK: It’s great to have you here. The first thing I wanted to ask is: The UK has this goal of decarbonising energy systems by 2030. How do you think we can achieve that?

LS: I think, in addition to the sort of energy opportunity which our Energy Transition Fund offers, and that’s obviously a very direct play in a specific opportunity for investors, we, as an investment house, have other strategies as well. Our approach when thinking about this is to look at our own net-zero roadmap and how that applies to our financed emissions.

So then it’s thinking about how across all of the investments we make, we can look down into the companies that we are selecting to invest in or lend to, and think about what role do they play within the net-zero transition, and the net-zero roadmap that we all have to take – we, as investors and as a company, the decisions we take around which companies we choose to invest in.

When we go through that process in terms of asset selection, it’s about how we as investors are starting to interrogate and understand in more detail how the different assets at companies that we take exposure to have their own approach to net zero. And lots of those companies that are not energy companies per se who are embedded within the energy system, but they’re obviously users of energy and so it’s looking at how they intend to reduce their energy use over the long term and what their plan is, and how they will change their business model over time in order to become more efficient.

NK: We are in the middle of a cost-of-living crisis around the world but in the UK particular. How can these investments or these businesses help in terms of lowering bills?

JH: I think one of the key areas investors can help with, and the key area for reducing bills, is around decarbonising, which is also kind of saving money. If you are a business today, you’re probably paying somewhere north of 60p per kilowatt hour for your electricity, in your energy.

We’ve seen many businesses go bust and cease to trade as a function of that. If they had solar on their roof, which investors such as our own could invest in, and then sell power back over a long period of time, they could be buying around 10-12p. So you commit considerable savings and contribute to the transition to net zero by generating a lot of the energy requirement on site.

And you’ve got the idea of reducing your absolute demand and that doesn’t have to be that painful. LED lights, for example, are a great way to reduce by up to 20-30% of your electricity demand. That’s retrofitting buildings, that’s heat pumps… There’s a range of different things that can actually reduce bills and contribute to net zero.

And, as investors, we’re looking to finance those solutions, to provide that infrastructure, for people and for businesses that enables it. And again, the second point I would make is on battery storage, which is helping balance the system. A big part of wind energy is that it is some of the cheapest electricity energy that we have. When it’s wasted that means buying gas instead and gas is at a much higher price, it’s obviously going out to the country in terms of economic development, which isn’t positive. And so, again, we would see that having a more renewable-based system, both lower costs and also enables people, therefore, to benefit from reductions.

NK: Okay, great. The last question, and we always end the Green Dream with this one: What is your favourite sustainable drink or snack?

LS: Are you handing that to me Jon?

JH: I would do a brief shout out for Toast Ale. I don’t know if people mention that one all the time, but that is a beer, or IPA, that is made using waste bread and they donate all their profits to charity. So that’s my favourite one and I’ve got a few cans sat in the fridge.

LS: I’m terrible. I would be really boring and I think my most sustainable drink would be some water in a clean canteen that I carry round, not in a plastic bottle, and maybe a banana, because I think that’s your ultimate sustainable snack.

NK: Fantastic. Well, thank you both.

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...