How the energy crisis has shifted the world of investments towards a greener future
30 Nov 2022
The energy crisis striking nations worldwide has taken over news outlets in recent months. Whether on the TV, on social media, or even on your electricity bill - this topic is hard to escape, being the talk of the town since the first quarter or 2022.
The ongoing Russia-Ukraine war has left the energy industry in shock, seeing natural gas prices soar, hitting aworldwide 893.1 index points in August 2022: a staggering increase in comparison to one year earlier which saw August 2021 at 244.22 index points, at 3,5 times higher.
Unfortunately, an increase in living utility expenses is only a fraction of what the energy crisis is impacting. The domino effect of this has seen the increase in prices of basic commodities worldwide, as well as the resurgence ofcoal-fuelled energy, which seems to be the most cost-effective solution at this point in time.
Putting aside the extreme economic strains that have come along with this energy crisis, the impact that it is having on the environment is colossal, with some going as far as calling this an “existential” threat to our planet. Looking to use coal as an alternative energy source seems to be backtracking from the hopes of a greener future. However, as gloomy as this potential shift to alternative energy may seem - green focused investment funds have been on the rise, with opportunities in the solar, wind and hydro sector booming like never before.
ESG Investments - What Exactly Are They?
Environmentally focused investing, often labelled under ESG (Environmental Social Governance) has emerged as a popular investment approach, which focuses on investing in companies that fit under the ESG umbrella. Companies that rank high on aligning their best practices with environmental and social aspects are increasing in popularity as more investors are seeing the value that they add. The three main aspects that are considered when ranking companies on the ESG front are:
● Environmental: How a company pursues an environmentally friendly approach, considering ways in which they can lower their negative impact on the environment, whether decreasing their carbon footprint or switching to paperless solutions.
● Social: How social matters are supported both within and outside of the company and what measures are being taken to promote diversity, inclusivity and support of struggling communities.
●Governance: The way in which the company's board and management is structured, including diversity and the greater interactions with shareholders.
Enter SJ Global Investments
Positioning their vision on creating a sustainable future - SJ Global Investments is what may be considered an environmentally-friendly investment fund, focusing their efforts on investing in ESG centred companies. What makes SJ Global stand out from other green funds is that social inclusivity starts from within, with the team coming from across the globe, bringing about diversity into each department and sector of the business.
SJ Global has taken a number of exciting projects under their wing, ranging across different environmental and social initiatives. With a great focus on helping less fortunate nations to receive funding, a notable project that SJ Global Hong Kong has been involved in is within the Zimbabwe mining industry. The 500 Million Euro project will inject funds into the sustainable mining of Zimbabwe’s resources, including gold, chrome, lithium, platinum and tantalite.
Global Green Fund
The Global Green Fund, a new venture founded by the SJ Global team is a project that is taking green investment initiatives to the next level. The Global Green fund follows a strategy to develop and support global initiatives and to push for sustainable projects through collaborations with strategic partners and portfolio firms.
Financial and strategic assistance will be provided to project developers throughout the project cycles, in the hopes of creating value within the green energy space while attracting new investors.
With the Global Green Fund successfully taking off, a number of objectives have already been outlined. A few objectives include partnering with and developing carbon neutral technologies globally, developing a cumulative pool of 10 Million hectares of agri-forests globally, participating in reducing carbon footprint of 300 Million tons through industrial projects and more.
Is The Future Green?
As daunting as the energy crisis may be on businesses, individuals and the environment - there seems to be a glimmer of hope and a new opening of opportunities in the form of green investments. Whether focusing on reducing energy usage or shifting to alternative power in the form of solar, hydro or wind, the energy crisis could in fact be accelerating the push towards greener energy.
With investment funds such as SJ Global focusing on ESG-based investment opportunities, as well as their new venture in the form of Global Green Fund, investors looking to make a difference in the current crisis can now do so with the help of these funds. Thanks to these initiatives, the future is in fact looking greener than ever.