“What a silly question!”, you might think: Success is entrepreneurial profit. Money. Prosperity. And after that, nothing comes for quite a long time. Entrepreneurial action based on values is rare. Or as Bertolt Brecht’s “Mother Courage” so beautifully puts it: “Food first, then morality”. Is this now changing in the face of the climate crisis? Because one thing is clear: The leverage that investors have or could have is enormous.
foto: taisiia shestopal on unsplash
“What a silly question!”, you might think: Success is entrepreneurial profit. Money. Prosperity. And after that, nothing comes for quite a long time. Entrepreneurial action based on values is rare. Or as Bertolt Brecht’s “Mother Courage” so beautifully puts it: “Food first, then morality”. Is this now changing in the face of the climate crisis? Because one thing is clear: The leverage that investors have or could have is enormous.
foto: taisiia shestopal on unsplash
The market for sustainable products is growing. This is because consumers are becoming more aware – and with it their demand for less polluting, more sensible, more ecological products. Lo and behold: Investors are now including a company’s impact on the environment and society in their assessment. This does not mean that the investment industry is now becoming green and responsible. It’s just that it pays off.
We investors are judged by how much return we generate – not by how much good we do. (…) Some problems, such as those caused by climate change, are becoming so pressing and inconvenient that (…) companies are prepared to pay a lot of money to mitigate them. So, if you offer good solutions, you will have a market. And those who have a market will be able to convince investors. It’s as simple as that. Says Madeline Lawrence, investor at VC Peak, in the brand eins magazine* (translated from German).
The problem: Venture capital investors work in 10-year periods. This means, investing in a company, e.g. a start-up, for 5 years. And then you have 5 years to pay back this investment with as much return as possible. Technical innovations in particular, which require high investments, can hardly be brought to market maturity in such a short time (e.g. CO2 storage, biofuels, hydrogen technology, etc.) But, according to Fabian Heilemann from Aenu*, a rethink is probably also taking place here, so that more long-term, so-called “evergreen funds”** could be a solution, especially for tech companies.
However, there still seems to be a debate among investors at the moment: Where does the money come from that is raised for a fund by companies or individuals? Is a sustainable fund “allowed” to take capital from an oil company? Or from an arms company? A chemical company? Is that then a form of “money laundering”? Gesa Miczaika, from Auxxo Female Catalyst Fund, says: The great fortunes of this world are almost always based on some kind of exploitation, at least if you trace them back to their origins. There is no right or wrong here. But the fact that such issues are being discussed shows that something has changed in the financial industry (translated from German).* That would be nice.
But what does all this ultimately mean for us average consumers with our small and medium-sized budgets? My personal conclusion from everything I have learned during the research for the series “Green Investments” is:
It is easy to open an account with a “green” bank. Check.
If I ever find myself in the position of investing money, I have a basic plan of what positive or negative criteria to look for. Read more …
And: As consumers, we have more power than we think. By opting for organic products, slow fashion, rail instead of air, etc., we have an impact. And not just on our own individual ecological footprint, but also on companies, markets – and therefore on the financial world. In this respect, all our small and smallest investments in the organic bakery at the corner, in the second-hand sweater, in Demeter coffee are worthwhile after all. And that is: Success.
Sources:
*brand eins 6/23
**www.finanzen-lexikon.de/cms/glossar-lexikon/27-lexikon-e/155-evergreen-fonds.html
Evergreen funds are generally designed to provide long-term exposure to the markets. Unlike funds with a fixed end date or target, evergreen funds do not have a time limit. Instead, they aim to be continuously exposed to the markets and generate a steady stream of capital and returns.