At the moment, when so many industries are staggered by the coronavirus pandemic, investors are beating the market by putting their money in companies committed to environmental, social and governance (ESG) priorities favouring transparency, diversity and sustainability.
ESG is where profits are, signalling that doing the right thing increasingly is the smartest bet. The iShares exchange-traded fund investing in companies it thinks have “positive environmental, social and governance characteristics”, one of the largest of the type, produced a total return this year that is more than three times the performance of the S&P 500 index.
The convergence of high-mindedness and profit was noted last month by Al Gore, the former US vice president, 2000 Democratic presidential candidate and Oscar-winning environmental documentarian. He told a Bloomberg conference: “It is ever clearer that sustainable technologies are cheaper and better.”
For more and more companies, doing the right thing is becoming as much a business imperative as a social responsibility, especially in the market for renewable energy. Apple, which has appreciated 30 per cent this year, recently unveiled its plan to become carbon neutral across its entire manufacturing supply chain and product life cycle by 2030. Nike is part of the RE100 coalition of companies planning to supply all energy needs from renewable sources by 2025.
“Long term, renewables could emerge stronger than ever, especially if governments integrate support for clean energy into Covid-19 economic recovery programmes,” said a report in May by the Yale School of Environment.
That’s already reflected in the anticipated performance of 38 US-based companies generating at least 50 per cent of their revenue from clean-energy products or clean technology. As a group, their sales are expected to rise 9 per cent this year, 30 per cent in 2021 and 23 per cent in 2022, according to data compiled by Bloomberg.
It is ever clearer that sustainable technologies are cheaper and better
By contrast, the 26 corporations in the S&P 500 Energy Index, a benchmark for fossil fuel, will suffer revenue declines of 29 per cent in 2020, followed by growth of 11 per cent in 2021 and 13 per cent in 2022, according to analyst estimates compiled by Bloomberg.
The phenomenon of ESG stocks outperforming the market is a long-term trend accentuated by the coronavirus. The 38 clean companies produced a 254 per cent total return (income plus appreciation) in the past 12 months, 250 per cent during the past two years and 330 per cent since 2015. Among them, Tesla’s one-year return is 575 per cent, including 130 per cent since March when the coronavirus prompted much of the US economy to shut down.
Enphase Energy, the renewable energy equipment maker based in Petaluma, California, gained 199 per cent over the past year, including 27 per cent since March. Vivint Solar is up 192 per cent over the past 12 months and 107 per cent since March, according to Bloomberg.
Traditional energy companies in the S&P 500 Energy Index lost 35 per cent, 46 per cent and 33 per cent, respectively, for the one, two, and five-year periods. Exxon Mobil declined 38 per cent during the past year, including 13 per cent since March. Conoco Phillips is down 30 per cent over 12 months, including 16 per cent since March. Kinder Morgan, the Houston pipeline transportation and energy storage provider, tumbled 28 per cent during the past year, including 25 per cent since March, according to data compiled by Bloomberg.
Since March, when the pandemic proved its virulence, ESG’s advantage over the market doubled. That’s reflected in the distance between the performance of BlackRock’s iShares Global Clean Energy ETF, one of the largest exchange-traded funds investing in renewable energy and clean technology, and State Street’s Energy Select Sector SPDR Fund, one of the largest ETFs investing in traditional energy companies. The fossil fuel crowd is getting crushed, according to data compiled by Bloomberg.
Anyone who thinks that ESG investors are more lucky than smart, or a trendy cohort of woke millennials, should consider the divergence between Aramco and Tesla. Aramco, the Saudi oil giant that was edged out by Apple on Friday as the world’s largest company, was valued at more than $2 trillion (Dh7.3tn) after its initial public offering in December. Since then, Tesla’s market capitalisation quadrupled to $286 billion passing Toyota Motor to become the world’s biggest automaker. During the same period, Aramco declined 15 per cent to $1.7tn, according to data compiled by Bloomberg.
The gap between Aramco and Tesla narrowed $500bn, a little more than the $467bn value of the world’s 9th-largest company. That would be Berkshire Hathaway, created by Warren Buffett, once the world’s richest man and the avatar of value investing. He’s shown no inclination to move toward ESG. So far.
Matthew Winkler is the editor-in-chief emeritus of Bloomberg News, writes about markets.
* Bloomberg
KILLING OF QASSEM SULEIMANI
Result
Arsenal 4
Monreal (51'), Ramsey (82'), Lacazette 85', 89')
West Ham United 1
Arnautovic (64')
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
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UAE currency: the story behind the money in your pockets
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Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
The years Ramadan fell in May
Killing of Qassem Suleimani
Zayed Sustainability Prize
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Mohammed bin Zayed Majlis
The biog
Name: Salem Alkarbi
Age: 32
Favourite Al Wasl player: Alexandre Oliveira
First started supporting Al Wasl: 7
Biggest rival: Al Nasr
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The years Ramadan fell in May
MEYDAN CARD
6.30pm Al Maktoum Challenge Round-1 Group One (PA) US$65,000 (Dirt) 1,600m
7.05pm Handicap (TB) $175,000 (Turf) 1,200m
7.40pm UAE 2000 Guineas Trial Conditions (TB) $100,000 (D) 1,600m
8.15pm Singspiel Stakes Group Two (TB) $250,000 (T) 1,800m
8.50pm Handicap (TB) $135,000 (T) 1,600m
9.25pm Al Maktoum Challenge Round-1 Group Two (TB) $350,000 (D) 1,600m
10pm Dubai Trophy Conditions (TB) $100,000 (T) 1,200m
10.35pm Handicap (TB) $135,000 (T) 1,600m
The National selections:
6.30pm AF Alwajel
7.05pm Ekhtiyaar
7.40pm First View
8.15pm Benbatl
8.50pm Zakouski
9.25pm: Kimbear
10pm: Chasing Dreams
10.35pm: Good Fortune
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
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Uefa Nations League: How it Works
The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.
The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.
Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.
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Killing of Qassem Suleimani
Mohammed bin Zayed Majlis
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Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
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Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
The Buckingham Murders
Starring: Kareena Kapoor Khan, Ash Tandon, Prabhleen Sandhu
Director: Hansal Mehta
Rating: 4 / 5
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Mohammed bin Zayed Majlis
Traits of Chinese zodiac animals
Tiger:independent, successful, volatile
Rat:witty, creative, charming
Ox:diligent, perseverent, conservative
Rabbit:gracious, considerate, sensitive
Dragon:prosperous, brave, rash
Snake:calm, thoughtful, stubborn
Horse:faithful, energetic, carefree
Sheep:easy-going, peacemaker, curious
Monkey:family-orientated, clever, playful
Rooster:honest, confident, pompous
Dog:loyal, kind, perfectionist
Boar:loving, tolerant, indulgent
KILLING OF QASSEM SULEIMANI
KILLING OF QASSEM SULEIMANI
Five expert hiking tips
Always check the weather forecast before setting off
Make sure you have plenty of water
Set off early to avoid sudden weather changes in the afternoon
Wear appropriate clothing and footwear
Take your litter home with you
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The Birkin bag is made by Hermès.
It is named after actress and singer Jane Birkin
Noone from Hermès will go on record to say how much a new Birkin costs, how long one would have to wait to get one, and how many bags are actually made each year.
The years Ramadan fell in May
Sinopharm vaccine explained
The Sinopharm vaccine was created using techniques that have been around for decades.
“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.
"What is left is a skeleton of the virus so it looks like a virus, but it is not live."
This is then injected into the body.
"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.
"You have to be exposed more than one time to what we call the antigen."
The vaccine should offer protection for at least months, but no one knows how long beyond that.
Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.
“Since it is inactivated, it will not last forever," she said.
Intercontinental Cup
Namibia v UAE Saturday Sep 16-Tuesday Sep 19
Table 1 Ireland, 89 points; 2 Afghanistan, 81; 3 Netherlands, 52; 4 Papua New Guinea, 40; 5 Hong Kong, 39; 6 Scotland, 37; 7 UAE, 27; 8 Namibia, 27
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Titan Sports Academy:
Programmes: Judo, wrestling, kick-boxing, muay thai, taekwondo and various summer camps
Location: Inside Abu Dhabi City Golf Club, Al Mushrif, Abu Dhabi, UAE
Telephone: 971 50 220 0326
