Providing real benefits for society and the planet – Part 3

Category: ethicalinvesting

It looks like we will shortly be seeing a resumption in fracking, together with more exploration and drilling for oil and gas in the North Sea. This is apparently with the intention of lowering costs in the short term and providing greater energy security for the UK in the longer term.

These are undoubtedly worthwhile objectives, but it’s not all clear how these changes will do this – particularly the former, when even the founder of one of the world’s leading fracking companies now believes it will not be possible on any meaningful scale. With the latter, it is estimated to take at least 25 years before any benefit will be felt. But what is clear is that these plans will blow a massive hole in the UK government commitment to net zero CO2 emissions by 2050.

We believe there is a better way to achieve these objectives and continue to support the EQ Positive Impact portfolios which invest in companies that are decarbonising our economies by increasing the share of renewables in the global energy mix.

Globally, energy generation and consumption account for over 70% of greenhouse gas emissions. Shifting the global economy’s dependence on fossil fuels to clean energy sources is key to limiting global warming to 1.5 degrees. Our portfolios invest in businesses that provide renewable energy technologies, harnessing geothermal, solar, wind and hydro energy. These companies are helping to generate clean, green electricity into grids worldwide and actively increasing our installed renewable energy capacity. We also invest in electricity transmission and battery storage to support the greening of grids and electrification of other sectors.

One of these companies is Vestas Wind Systems, a Danish renewable energy solution company that produces, designs, installs and services wind turbines across the world. This is their core business activity – 84% of the company’s revenue is from the sale of wind turbines and blades, with 16% derived from servicing this equipment.

Vestas has installed more than 129 GW of wind turbines in 85 countries, more than any other company. In 2020, the company added an additional 15.5GW of new turbines, giving it 50% of wind turbine market share outside China.

Wind now is on a par with solar power as one of the cheapest alternatives to fossil fuels. In 2020, Vestas wind turbines generated 435 million MWh of renewable electricity, avoiding 186 million tonnes of carbon emissions – about the same as taking 40 million passenger cars off the road last year.

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