The lazy way to profit from global warming

Here’s a not so political email after the US elections. I was never very good at scary movies....

Speaking of scary things in our future – perhaps the scariest phenomenon confronting human beings is global warming.

Global warming with its temperature increase and ensuing sea level rise threatens to change the way we live and conduct business, the very climate we exist in.

Governments have been slow to act around the world and will get slower still, but businesses either sensing threats to the way they work now or seeking opportunities for future profits have been moving research and talent into taking economic advantage of global warming.

There are basically two ways of making money via global warming…. The first is to deploy technologies and services that mitigate or reduce carbon emissions. The second is to develop products and services that help adapt to global climate change. A solar cell company would be in the first category – helping reduce carbon emissions while a company selling desalination services to produce drinking water in areas that face increased droughts would be an example of adaptation.

Now my lovely California/ Santa Clara county ballot arrived in the mail. Other than the obvious Clinton/ Trump choice (I was with her – obviously) there were a multitude of other choices to make for state and district level position, Palo Alto school board positions and then a host of California propositions to vote on – heavy issues such as the death penalty.

Not having lived in California in years I don’t know the issues like I used to. So I used a convenient cheat sheet - I went to the local papers I trust and saw what they suggested. I figure that they’ve spent quite a lot of research and thought into establishing those positions and it makes sense for me to vote along those lines.

What if we had a similar cheat sheet for companies that were doing well in regards to climate change – in positioning their products and services to the market. The cheat sheet didn’t have to be 100% right just updated regularly and consistently.

Well, luckily we have products like this on the market. Research houses such as MSCI have come up with low carbon and most sustainable company indexes with a basket of global warming friendly companies that you can buy with one sweep by buying the ETF associated with it. They update the companies in the index quarterly, so you won’t have to do the work of keeping up. Here’s a link to one example:

https://www.ishares.com/us/products/271054/ishares-msci-acwi-low-carbon-target-etf

I hope that gives you an easy way to invest in the opportunities thrown up by global warming.

This is a subject close to my heart so do email me if you have questions.

Best,

Mallika

Disclaimer: I have no affiliation with BlackRock. I am a past employee of MSCI (until 2014) but have no current affiliation.