News

Carbon Capture Kelp

As the recent IPCC climate health check report begins to sink in and transitions into action globally, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) last week released the CO2 Utilisation Roadmap, designed to outline how Carbon Capture can provide a solution to Australia’s climate woes.

The report outlines how Carbon Capture and Utilisation (CCU) technologies can provide the opportunities that Australia desperately needs to reduce its emissions to meet global reduction commitments, and more importantly halt global warming.

Whilst the roadmap correctly outlines how CO2, captured from industrial processes or from the atmosphere, can be transformed into synthetic fuels, food and beverages and even building materials, it problematically promotes a limited “technology not taxes” approach to climate risk management.

At Vellum, we firmly believe that definitive climate positive action can only be achieved when carbon mitigation and carbon capture are both implemented in conjunction with one another. We believe this is the solution to not only addressing current challenges but sustainably revolutionising tomorrow’s practices, to go beyond climate survival and make positive impact.

Our approach is to support new technologies and tomorrow’s sustainable solutions through our ESG Fund and advisory practice, whilst simultaneously balancing this transformation with active sequestration and carbon capture practices to make a difference today.

One of the more novel opportunities for carbon capture is kelp farming in Australia.

In Asia, seaweed farming is already a multi-billion-dollar industry which is seeing rapid global expansion, due to its function as an extremely nutritious and fast-growing food source, and also because of its ability to combat climate change. According to the BBC, seaweeds are thought to sequester nearly 200 million tonnes of CO2 every year.

Kelp is one of the most advantageous types of seaweed on account of its rapid growth (up to 2 feet a day) and the fact that it does not require maintenance or fertiliser. Seaweed absorbs CO2 through photosynthesis for growth and upon death, majority of the carbon it has absorbed is locked in its tissue which is transported to deep oceans.

Beyond its carbon capturing potential, the World Bank estimates that if the sector were to grow by just 14% year on year by 2050, seaweed could increase global food supply by 10%.

We at Vellum are always looking for investment opportunities like this, innovative solutions that tackle short and long-term problems, and also align with our strict ESG criteria. In this case, kelp provides an opportunity in both carbon capture and reduction, and though novel, ultimately stands as an example of the type of innovative project that will be needed to address Australia’s climate problem.

 

 

 

References:

 

https://www.gasworld.com/australia-to-become-leader-in-carbon-capture-says-csiro-report/2021504.article

https://www.bbc.com/future/article/20210406-how-kelp-can-help-solve-climate-change

https://www.abc.net.au/news/2021-08-21/taxpayer-bill-for-carbon-capture-and-storage-hits-4-billion/100375854

 

News

Electric Vehicles: Driving Change, Facilitating National Shift

New South Wales born Tesla chairwoman Robyn Denholm recently urged Australia to join the world in embracing a rapid transition to electric vehicles. She argued that Australia faced a massive opportunity to become a renewables power-house thanks to the country’s wealth of natural resources, including lithium, necessary to make electric vehicles.

The call comes as Australians continue to lag behind the rest of the world on electric car purchases, despite a large proportion (50%) expressing they would consider buying an electric vehicle as their next car.

The urgency of encouraging a rapid transition to electric is paramount as 75% of all new car sales need to be electric by 2030 for Australia to achieve net zero emissions by 2035, according to the Climate Council.

At Vellum, we share Robyn Denholm’s vision for Australia and are similarly looking to support a clean energy revolution right here at home.

We aim to achieve this by facilitating a transition to a more sustainable world in the present, but also forging a vision for the future that makes this transition more attainable. Electric cars are an excellent example of how we implement this approach.

Our approach is to uphold the highest environmental, social and equitable governance standards possible, not only in our own practice, but when we work with other organisations too. We also ensure that our investments align with this ESG-first approach and that they are all capable of facilitating positive change. This helps us encourage transformative environmental change in the present, including renewable energy and low-emission transportation, like electric vehicles.

While we want to transition to clean cars to drive, at Vellum we are also fans and investors in classic cars as an asset class.  That’s why we are establishing Vellum Perpetual Collection Fund. For a car appreciating nation looking to make a clean transition to an electric future, our Perpetual Collection Fund will provide exposure to investment in rare and collectible motor cars and will back clean car projects. Funds like this help to preserve historical and appreciating vehicle types, while modernising and replacing an entire generation of fossil-fuel dependent cars. The Perpetual Collection Fund will be well-positioned to facilitate a transition toward the future of electric vehicles and provide investors with exposure to an asset class that has outperformed Property and global Equities, returning an average of 14% pa over the past 10 years (Knight Frank wealth report).

We believe that the time to transition to a more sustainable, low-emission society is now. We stand at the forefront of this transformation, ready to assist our clients by playing a role in the positive transformation of the present and also the facilitation of change for the future.

 

To find out more visit us:

https://www.vellum.com.au/portfolio/vellum-perpetual-collection/

 

 

Sources:

News

ESG: Safeguarding Investors, Nurturing Investment

As interest in ESG aligned funds reaches unprecedented levels within a strongly performing Australian financial market, increased attention has turned to the question of ‘how we can ensure well-meaning investors aren’t being misled by green washing?’.

Cathie Armour, Commissioner of ASIC, recently announced a review into green washing practices, aimed at improving market governance and accountability amongst some of Australia’s top funds.

The action comes off the back of results revealed by the Responsible Investment Association Australasia (RIAA) which found that 62% of surveyed respondents believed ethical super funds outperform others (up from 29 per cent in 2017).

As a firm believer in ESG investing, we are always pleased to see action in Australia that moves us closer toward national policy that protects investor confidence in their investments, that they are as ethical as they are reported to be.

Already we have seen successful rollouts of ESG regulations in other regions, such as the EU taxonomy, which is the foundation of the criteria Vellum uses to assess ESG performance and share six fundamental objectives that guide or business:

  1. climate change mitigation
  2. climate change adaptation
  3. sustainable use and protection of water and marine resources
  4. transition to a circular economy
  5. pollution prevention and control, and protection
  6. restoration of biodiversity and ecosystems and one that does not harm the others

 

It is crucial that we see increased movement toward all-encompassing regulation which protects investors and nurtures the ESG movement in Australia.

News

Bamboo Signals Green Shoots of Growth for Carbon Capture

Last month the Australian Government made its ambitions to support carbon capture as a means of viably reducing emissions clear, as it announced a commitment of $50 million in funding for carbon capture, use and storage projects.

The investment in carbon sequestering technology marks a significant contribution toward the net zero emissions 2050 target, one which the International Energy Agency’s Net Zero by 2050 Clean Energy Roadmap argues is critical to the target’s achievement.

At Vellum, we see huge opportunities in the application of carbon capturing techniques and materials in Australian building practice as a means of reducing emissions at a commercial scale.

Our research has shown that one of the most innovative ways that we can bring carbon capture to commercial practice is through the use of bamboo in construction.

Project Drawdown, the world’s leading resource for climate solutions, placed bamboo plantation in the number 21 spot out of 76 solutions to reverse global warming. In fact, they estimate that if planted determinedly, bamboo could sequester as much as 21.3 gigatons of carbon dioxide over the next 30 years.

Beyond these potentials, bamboo is currently one of the most sustainable materials on earth; as it grows at a rapid rate, can be harvested without killing the plant and requires no fertilisers or pesticides. It is also capable of benefiting the soil from which it is grown, improving land productivity and quality. Bamboo is also estimated to provide 35% more oxygen and absorb 40% more carbon dioxide than trees.

For these reasons, we at Vellum are very interested in the potentials for clean, sustainable resources such as bamboo within the Australian property market that adhere to our strict ESG standards and our commitments to the local and global environment.

The potential for sustainable building materials to assist countries capture carbon and meet reduction targets is already being recognised overseas, with the bamboo market currently worth $27 billion, predicted to reach as high as 98.30 billion by 2025.

As the Australian Government looks for opportunities and technology to embrace carbon capture in the Australian market, we see no better opportunity nor time to consider green solutions such as bamboo production and construction.

News

No Room for An Overpromise – Underdeliver Scenario on Climate

With global organisations all setting their sights on achieving net zero emissions, an all-too-common ‘deadline’ thrown around is the year 2050. Whilst this commitment made by many organisations, from Coles Group to the Australian Federal Government, is undoubtedly a positive one, it is critical that we pose the question ‘What are the practicalities of achieving net zero emissions by 2050?’.

As we all know, it is easy to make ambitious plans – harder to realise them, but in the case of some of the world’s largest emitters, there is no room for an overpromise – underdeliver scenario on climate. To prevent this situation and assist in charting out what the transition to net zero must look like, the International Energy Agency last month produced the Net Zero by 2050 Clean Energy Roadmap.

The report aims to plot the road to net zero and the global effort required, in both behavioural and fiscal terms.

Some of the key findings from the report include:

  • ‘To reach net zero emissions by 2050, annual clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion’.
  • ‘Clean energy innovation must accelerate rapidly, powered by investment’.
  • ‘Policies need to be designed to send market signals that unlock new business models and mobilise private spending’.

The forecast behind the report’s insights is one of a clean energy revolution. A movement supported by policy, led by investors and powered by innovative ideas. These findings align with our beliefs and practices at Vellum.

We believe firmly that the greatest opportunities for transformation toward a more sustainable way of living are those ideas that are just beginning to emerge. For Vellum, this means actively supporting solutions developed to address contemporary issues from their infancy.

As illustrated in the IEA’s report, we are witnessing a significant shift in 2021, in which investors looking to support real innovation are no longer required to choose between impact and profit. This is why we are committed to helping our clients achieve both, by getting behind the transition to a more sustainable world and supporting the organisations that will be a force for change, not just a commitment to it.

News

Let’s Make ESG a Constructive Conversation

In 2021, two significant forces appear to be holding Australian investors interest above all others; housing and ESG standards.

Only this week it was reported that property values around Australia have increased 10.9% over the last 12 months, causing the big banks to forecast 20% to 30% rises in property values. This forecast coincides with Wednesday’s report of unprecedented interest in Sydney’s first net zero property.

Whilst all signs are clearly pointing toward a growing interest in sustainable housing and ESG aligned property development, the focus is often on energy rating and operational efficiency.  This often sees the consideration of the sustainability of building materials used to construct the property overlooked.

Last year it was reported by the Global Alliance for Buildings and Construction that emissions from the buildings construction industry constituted 10% of all energy related CO2 emissions on the globe. In conjunction with this data, according to the Chartered Institute of Building, construction uses up to 32% of the world’s natural resources. These significant statistics highlight the critical consideration that must be paid by prospective and current investors to ESG aligned construction projects.

At Vellum we have identified a need to harmonise the increased interest in property investment and ESG investing, in order to inspire a green revolution in the property and building industry. Whilst our property expertise lies primarily in the build-to-rent space, we strive to ensure that we are always maximising the sustainability of our developments, from planning to delivery and beyond.

An example of ESG aligned construction research we are exploring currently is in bamboo as a sustainable building material.

Bamboo is a sustainable resource that does not require re-planting, possesses strength superior to steel and which absorbs up to 12 tonnes of carbon dioxide per hectare, yearly. Bamboo is seeing major popularity in ‘green’ building projects across Australia in three primary uses: as a laminate, for its fibre, or less commonly, as a dried, usually woven material. Bamboo can store four times more carbon than trees and produces 35% more oxygen than a timber forest, which is feasible to grow in most environments.

This is just an example of the work we are doing to ensure that we as an organisation can harness this growing interest in ESG and property as a force for reformation and green growth.

News

The Opportunity is Startup Investment

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As we have covered previously, the number of Australian investors interested in sustainable investment sits at an all-time high (Link to previous article). Despite this trend, the opportunity that offers the greatest chance at delivering massive change and similarly sized returns is often overlooked.

That opportunity is startup investment.

At Vellum, we believe that real change that benefits the planet can only be achieved by actively nurturing great ideas and revolutionary technologies from infancy. This means diversifying away from pruning the leaves of established mega organisations to fit within ethical criteria, and instead helping cultivate the seeds of a more sustainable tomorrow.

Despite the existing enthusiasm from Australian investors, there is still a lack of clarity around how investors can support real, tangible change and make their money work harder for their interests. At Vellum, we have found that tools such as EnergyLab’s taxonomy for impact investors are particularly useful in addressing this issue.

With the primary aim of demystifying the United Nation’s Sustainable Development Goals’ 169 targets and 231 indicators, the taxonomy is designed to make SDG-aligned clean tech startup investing simpler than ever before.

Within the taxonomy, EnergyLab puts forward a list of thirty-seven categories of the most common cleantech startups and assigned an SDG they “primarily contribute towards as well as any SDGs they secondarily support”. This is a significant framework and is one that aligns with our interests in promoting greater transparency from organisations and clearer ESG returns for investors.

Investors who wish to positively transform the way companies operate, how we use technology, and by extension the sustainability of the global economy, should be looking first for that which underpins all successful ventures: a great idea.

We know that funding predictable, common organisations will net predictable, common results. By looking to support great ideas during infancy, you not only choose the change you want to see in the world, you maximise the potential financial growth of your investment. With ESG aligned and sustainability focused investing, we know that that big returns – both fiscal and sustainable – require thinking big.

News

Australian Investors are Showing a Hunger for Ethical Investment – Don’t We Owe It to Them to Tell Them What ‘ethical’ really means?

There is no question that an appetite for investment options that make a positive difference is burgeoning in this country, the question then is how can we satisfy investors by achieving both profitability and positive outcomes?

Beta shares recently revealed that 20% of all investors in Australia are deliberately seeking socially responsible investment opportunities, a significant figure that rises even higher when discussing younger investor preferences (28%).

However, the term ‘ethical’ by its nature is subjective.

I for one firmly believe that we not only have the power but the duty as financial institutions to channel this trend for ethical investment into real action. However, this is only possible if a consensus definition of what constitutes ethical investment is reached and able to be tested against strict ESG standards.

At Vellum, we understand that positive impact which truly makes a difference either enriches one or all of the following dimensions, Environmental, Social Impact or Corporate Governance. These dimensions, which constitute ESG, are the exact parameters by which we can observe our investments at work, but achieving this visibility will take some reform.

Currently there are no regulations that ensure that the growing numbers of Aussies trying to make a real difference with their investments will see real results. There is no existing obligation for so called ‘ethical investment’ funds to clearly disclose investment choices, nor adhere to any regulatory standards. This may mean many Australians may be investing in causes which are counterproductive to their beliefs.

Such standards, which would ensure that ESG dedicated funds were truly creating positive impact, already exist in Europe thanks to the Sustainable Finance Disclosure Regulation and similar measures have recently seen significant backing from US president Joe Biden (ref).

In order to properly harness this growing enthusiasm from Australians for sustainable investment, and to ensure that ESG continues to be a meaningful benchmark for positive change, we need similar reform here in Australia.

News

ESG Regulation and Standardisation – a Hunger Confirmed by Australian Investors.

Emerging from a period of economic and financial instability, one thing has become abundantly clear, Australians are hungry for sustainable investment.

This observation was confirmed last week by Australian research organisation Investment Trends through an audit of 2,854 retail investors and 321 financial advisers. One of the most significant findings, especially for financial services firms such as ours, was that 78% of ESG investors intend to trade stocks and funds solely based on environmental factors in 2021, a rise of 34% on the previous year’s reporting.

Surprisingly, while Australian investors seem to have an insatiable appetite for strong ESG standards and climate friendly investment, only 40% (approximately) of financial advisers were reported as actively recommending ESG investment to clients over the previous year. The report explained the hesitance, “Placed at the intersection of clients who are demanding more ESG investments and the firms trying to deliver, financial advisers are uncertain about how it will all play out”.

Investment Trends went on to note that improved reporting would ease some of these anxieties and help advisers feel more confident in recommending ESG compliant investment.

Standardisation and regulation on ESG reporting would be a positive step for the industry in Australia. Such action has already been taken in Europe with the introduction of the Sustainable Finance Disclosure Regulations (SFDR), which are expected to lead to the following benefits:

  1. No Green Washing. Fair and honest regulation addresses misleading reporting from organisations who take advantage of loose standards for environmental, social and governing responsibility.
  2. Increased investor confidence. It has been shown that companies and funds who adhere to strict and honest ESG standards mostly out-perform those who do not. This assessment verified by Morningstar, which found that 89% of sustainable indices outperformed their broad market equivalents in Q1 2020. With increased visibility of these results, investors and advisors alike feel encouraged to make a positive and profitable investment in the future.
  3. A better Australia for Australians. Standardisation and accountability in reporting means that companies and fund managers are required to show directly how their investments and actions effect society positively and provide environmental benefit for generations of Australians to come.

 

At Vellum, we are dedicated to delivering exceptional outcomes for clients, excellent returns to investors and importantly positive, transparent impact to people and the planet.

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