Essay by Eric Worrall

Why aren’t more fund managers following NOAA Chief Scientist Sarah Kapnick’s advice, and getting in on the ground floor of the green investment opportunities of tomorrow?

If your fund wants to stop climate change, why did it buy Microsoft?

Are the “sustainable” investment funds rushing the ASX really different to regular funds?

Aaron Patrick Senior correspondent
Apr 28, 2023 – 5.00am

One of the most sought-after skills in global investing is the ability to uncover the climate economy’s equivalent of the next Microsoft or Alibaba.

But investors hoping to participate in what has been dubbed the greatest business opportunity since the world wide web might be surprised their fund managers are investing in Microsoft and Alibaba, and other stocks-of-yesterday that have little direct connection to climate change.

…

Now chief scientist of the National Oceanic and Atmospheric Association, Kapnick advised investors to seek out technologies at the forefront of science. Her suggestions included soilless farming, the manufacture of jet fuel from biological waste, and the large-scale sequestration of carbon dioxide.

…

Yet, despite the flow of money, the MSCI World Climate Action Index – a list of leading “climate transition” companies – fell 21 per cent in 2022, while the world’s share markets fell 18 per cent overall.

…

Read more: https://www.afr.com/wealth/personal-finance/if-your-fund-wants-to-stop-climate-change-why-did-it-buy-microsoft-20230420-p5d21a

Sarah Kapnick’s advice is available here.

Investing in vertical farming. Yep. That will make me rich.

Most of those items as far as I can tell are only opportunities so long as the government subsidises them. A few, like improved batteries, are intractable problems which are already well covered by existing players.

My question, where is the alleged financial opportunity for investors? For example, what is the financial gain for investors if they finance the construction of infrastructure to “mechanically sequester carbon”?

Such economically useless activities only make sense so long as a gullible politician is paying for them. And that by definition makes such investment high risk, because all it takes to wipe out the value of such investments is the election of a Reagan style government, whose leaders make it a priority to put a big red pen stroke through every scrap of wasteful government expenditure they can identify.