Environmental impact investing and Granite Asia

Ultimately, it all boils down to what we choose to do to save our homes. And this is where environmental impact investing comes in as a critical vehicle to drive this change. Also known as sustainable investing, environmental impact investing is how we funnel our investor dollars towards a better future for the world.

Here’s an overview of what we will cover in this article:

• What is environmental impact investing?
• The state of the planet today
• Granite Asia and sustainable investing

What is environmental impact investing?

In a nutshell, environmental impact investing is an investment strategy that aims to generate environmental benefits alongside financial gains. Environmental impact investing utilises money and investment capital to effect positive environmental results.

Forming the “Environment” pillar of Environment, Social, and Governance (ESG) investing, environmental impact investing prioritises the environment as a key consideration factor in the analysis process to identify material risks and growth opportunities.

Below is a list of environmental factors that inform the investment process:

• Climate change and carbon emissions
• Air and water pollution
• Biodiversity
• Deforestation
• Energy efficiency
• Waste management
• Water scarcity

With this understanding of environmental impact investing, let’s review the core problem it aims to address: climate change.

The state of the planet today

Climate change has become especially ferocious in recent years. As of May 2022, the United Nations (UN) reported a 50:50 chance of the average global temperature reaching 1.5 degrees Celsius above pre-industrial levels in the next five years.

The 1.5 °C threshold was established during the Paris Agreement, indicating the point at which climate impacts will begin to be harmful to people and the rest of planet Earth. Since 2015, the chance of temporarily exceeding this threshold has been increasing yearly – 10% in the past five years and nearly 50% from 2022 to 2026.

The culprit behind this steady increase? The global emission of greenhouse gases by many countries worldwide. According to World Meteorological Organisation (WMO) Secretary-General Petteri Taalas, the increase in global temperatures triggers a snowball effect:

Over in Australia, the country’s environment is in a “poor and deteriorating state”, its land and water ailing from increased land clearing, urban expansion, and invasive species.

India recorded its hottest March in 2022, which sparked a series of heatwaves that plagued the country until May.

Europe has also been experiencing extreme heatwaves, which have evolved into huge wildfires in Spain, Greece, and France.

You get the drift. The world is collectively experiencing the gruesome impact of climate change. But all hope is not lost. We can prevent the world from spiralling out of control. And this begins with investors like us – we must devote our investor dollars towards causes that promise to safeguard the environment and our home.

Granite Asia and sustainable investing

Over at Granite Asia, we believe that a better world is something worth investing in. That’s why combating climate change has long been a top priority for us, as reflected through our investments in companies that use technology to better the environment.

Environmental impact investing will save the world

Climate change is a longstanding problem with no easy, quick-fix solution. Yet it’s still possible to mitigate some of its more damaging effects, and this is where investors like Granite Asia play an essential role in identifying the drivers of change.