Displaying items by tag: sustainability
Most bitcoin investors know it, but few else do: the bitcoin industry is ultra energy intensive as bitcoin mining takes mountains of electricity. Because of this, the surge in interest in ESG is casting a pall over the bitcoin frenzy. One research analyst summarized the situation very nicely, saying “Many companies have cozied up to Bitcoin in order to associate themselves with the digital currency’s technological mystique … As ESG funds start to flee Bitcoin, its price will begin a downward spiral. Stay away”.
FINSUM: This makes absolute sense. Bitcoin is highly energy inefficient, and therefore the combination of ESG considerations and likely government regulations make bitcoin look quite unattractive over the long term.
ESG has been getting more and more mainstream, and yesterday it likely took the final hurdle to major acceptance...View the full story on our partner Magnifi’s site
Goldman Sachs is entering the ESG market as it plans to sell bonds to finance greener projects this week. This is part of the firm's broader attempts to provide funds to socially conscious investments. In fact GS plans to issue $750 billion in credit by 2030 to this trending area of finance. CEO of Golman Sachs Bank Carey Halio said to expect a steady stream of issuance in ESG, but the size of these initiatives will grow slowly over time. Goldman is just the latest to jump into this segment of the market. Investors may also have the opportunity to invest in alternative currencies in the future as Goldman has indicated a similar rollout could happen in the euro area. GS is just the latest of financial firms moving into the growing ESG arena. Bank of America, Citigroup and Morgan Stanley helped contribute the $118 billion growth in ESG last year.
FINSUM: Financial firms involvement in ESG will only continue as many of these companies will find helpful policies with the new administration.
ESG has been getting more and more mainstream, and yesterday it likely took the final hurdle to major acceptance. A top asset manager with almost $1 tn in AUM announced that from here forward, all its new funds would be ESG. The manager is DWS group, which is majority owned by Deutsche Bank. According to DWS, “Sustainability is more than a corporate topic, it’s a society topic and an industry topic”. The move follows UBS’ recommendation last year that investors choose sustainable investing over traditional investing. However, according to some US financial advisors, these kind of moves will come slowly in the US. “There is too much assets tied up in old money and not enough advisor support,” says Jeff Glitterman of Glitterman Wealth Management.
FINSUM: We have to agree with Glitterman here. While BlackRock has certainly been a leader in the US, there is a reason a lot of these big announcements have been coming from European firms.
Which stocks dominated the 2010s? It is an easy question, not a trick—tech stocks. The FAANGs absolutely ruled in the past decade, but such patterns rarely continue and the best stocks in the next 10 years might be very different. Instead, UBS recommends stocks that focus on sustainable investing, genetic therapies, digital transformation, and alleviating water scarcity. The world and its governments and investors are likely to move towards sustainable tech in the next decade, which should support this nascent space, says UBS. Meanwhile technologies like 5G and gene-based therapeutics will revolutionize the technology and healthcare sectors. The world also has a significant supply and demand issue in water (mismatches between where water is and where it is needed), which will create significant revenue opportunities.
FINSUM: This is quite a progressive view, especially in respect to the water and sustainability forecasts. That said, it does seem like a good thesis.