Identifier : ESG/RSE/Fondation CC&L

Connor, Clark and Lunn Infrastructure (CC&L Infrastructure), EDP Renewables North America (EDPR NA), and Hoosier Energy are celebrating American Clean Power Week as construction winds down at the 200-megawatt (MW) Riverstart Solar Park in Indiana, which will be the largest solar array in the state upon completion.

Located 80 miles northeast of Indianapolis, the solar park has brought hundreds of jobs to Randolph County with approximately $180 million in capital investments. When operational, Riverstart Solar Park will power the equivalent of more than 36,000 average Indiana homes annually.

Over the project’s lifetime, millions of dollars in property tax payments will be disbursed to school districts and local governments. Riverstart has a 20-year purchase power agreement (PPA) with Bloomington-based Hoosier Energy, which will use energy produced from the project to power communities throughout central and southern Indiana and southeastern Illinois. The agreement will help diversify the electric grid and add to Indiana’s growing portfolio of renewable energy projects.

« Riverstart Solar Park will provide an economical source of renewable energy for the next two decades and is a great fit for our members’ long-term needs, » said Donna Walker, Hoosier Energy President and CEO. « Hoosier Energy appreciates the collaboration with EDPR and CC&L Infrastructure and looks forward to working with them to make this project a success. »

Hoosier Energy is a not-for-profit generation and transmission cooperative that provides electric power and services to 18 not-for-profit electric distribution cooperative owners. The 18 cooperative members serve more than 760,000 consumers.

The solar project’s construction has already created hundreds of jobs for Hoosiers and continues to bring well paying jobs to the area. Riverstart has also led to millions of dollars of spending within 50 miles of the project— boosting the local economy and supporting local businesses and families. The project will also complement the area’s agricultural resources with a stable, weather-proof cash crop in the form of landowner lease payments.

“CC&L Infrastructure and our investment partner, Desjardins Group, are pleased to own and operate this largescale solar project alongside EDPR,” said Matt O’Brien, President of CC&L Infrastructure. “As long-term investors, we believe in responsible investment. CC&L Infrastructure is focused on investing in essential infrastructure projects that support local communities while creating value for customers, employees and investors. We look forward to working together to supply Hoosier and Randolph County with solar power for the decades to come.”

“EDP Renewables is proud to bring investments, jobs, economic growth, and renewable energy to Indiana,” said Miguel Prado, CEO of EDP Renewables North America. We are grateful for the collaboration with Hoosier Energy and CC&L Infrastructure, who made the Riverstart Solar Park possible, and we are thrilled to see the positive impact solar power has had on the Randolph County community and the state of Indiana as a whole.”

Riverstart Solar Park is expected to begin operations before the end of 2021. EDPR NA has 1,199 MW of operational renewable energy capacity in Indiana, which represents one-third of all renewable energy capacity installed in the state. Through the company’s dedication to sustainability measures, Indiana is one step closer to a cleaner, brighter future.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with highly attractive risk-return characteristics, long lives and the potential to generate stable cash flows. The firm has been an active investor and owner of traditional and renewable energy assets for more than 15 years. Its portfolio includes more than 60 hydro, solar, and wind facilities totaling 1.4 GW of clean energy generating capacity globally. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi boutique asset management firm whose affiliates collectively manage approximately CAD$100 billion in assets.

For more information, please visit www.cclinfrastructure.com.

About EDP Renewables North America

EDP Renewables North America LLC (EDPR NA), its affiliates, and its subsidiaries develop, construct, own, and operate wind farms and solar parks throughout North America. Headquartered in Houston, Texas, with 58 wind farms, eight solar parks, and seven regional offices across North America, EDPR NA has developed more than 8,300 megawatts (MW) and operates more than 8,000 MW of onshore utility-scale renewable energy projects. With more than 800 employees, EDPR NA’s highly qualified team has a proven capacity to execute projects across the continent.

For more information, visit www.edpr.com/north-america.

About EDP Renewables

EDP Renewables (Euronext: EDPR), is a global leader in the renewable energy sector and the world’s fourth-largest renewable energy producer. With a sound development pipeline, first class assets, and market-leading operating capacity, EDPR has undergone exceptional development in recent years and is currently present in 17 international markets (Belgium, Brazil, Canada, Chile, Colombia, France, Greece, Hungary, Italy, Mexico, Poland, Portugal, Romania, Spain, the United Kingdom, the United States, and Vietnam).

EDPR is committed to furthering social advances in terms of sustainability and integration. This is reflected by the inclusion of the company in the Bloomberg Gender Equality index and the fact that it has been certified as a Top Employer 2020 in Europe (Spain, Italy, France, Romania, Portugal, and the United Kingdom) and a Top Workplace 2020 in the United States, both of which recognize its employee-driven policies.

Energias de Portugal, S.A. (EDP), the principal shareholder of EDPR, is a global energy company and a leader in value creation, innovation, and sustainability. EDP has been included in the Dow Jones Sustainability Index for 13 consecutive years.

About Hoosier Energy

Founded in 1949, Hoosier Energy is a generation and transmission cooperative (G&T) with headquarters in Bloomington, Indiana. The G&T provides electric power and services to 18 member distribution cooperatives in central and southern Indiana and southeastern Illinois. We are a community-focused organization that works to efficiently deliver affordable, reliable and safe energy. Collectively, our 18 members serve more than 760,000 consumers. Hoosier Energy is an equal opportunity provider and employer.

For more information, visit www.hoosierenergy.com.

Contact:

Kaitlin Blainey
Director
Connor, Clark & Lunn Infrastructure
(416) 216-8047
[email protected]

New mandatory climate-related disclosure rules are on the horizon. The European Commission is conducting a review of its rules on non-financial disclosure, which covers climate risk reporting.[1] Last year, the UK said it would begin requiring certain companies to include emissions and climate risk information in annual reports by 2025, in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD) framework. Both the United States (US) Securities and Exchange Commission and the Canadian Securities Administrators are also working on new reporting requirements. Currently, only high emitters of greenhouse gases in the US and Canada are required to report emission data. However, the requirement scope is expected to expand.

Recently in Japan, a new initiative from the Financial Services Agency (FSA) was announced, making it mandatory for about 4,000 companies (including those listed on the Tokyo Stock Exchange) to report their greenhouse gas emissions, and make other climate-related disclosures, effective April 2022. The FSA will require companies to make disclosures in accordance with the TCFD framework, which is structured around four thematic areas: governance, strategy, risk management, and metrics and targets.

In April 2019, Global Alpha became a supporter of the TCFD. We are committed to disclosing our approach to identifying, assessing, and managing climate-related risk in our investments on behalf of our clients. On the Global Alpha website, we published our TCFD-aligned report. There are also quarterly Climate Impact Assessment reports on our Global and International Small Cap strategies.

In previous commentaries, we have highlighted many holdings that are having a positive impact on carbon neutrality, such as Iwatani (8088 JP), Hexagon Composites (HEX NO), Clean Energy Fuels (CLNE US), Ormat (ORA IT), Biffa (BIFF LN), Aurubis (NDA GY), Primo Water (PRMW US), and Innergex Renewable Energy (INE CN), etc. This week, we are profiling Daiseki Co., Ltd., a new addition to the international small cap strategy that benefits from the upcoming new mandatory climate-related disclosure rules, as it can help industrial companies mitigate climate impact significantly.

Daiseki Co., Ltd. (9793 JP)

www.daiseki.co.jp

Business Overview

Founded in 1945, Daiseki is the largest processor of liquid industrial waste in Japan. The company mainly treats and recycles waste oil, waste water, and sludge. Its facilities are nationwide, serving about 6,500 corporate customers, and many of their customers are in the automobile, electronics, machinery, and chemicals industries.

Simple incineration of one ton of waste oil produces 2,920 kg of CO2, but this can be reduced by 99% to 31.3 kg by recycling it as heavy oil. Through the oil-water separator and fuel conversion treatment, Daiseki reduced CO2 by 102,000 tons in fiscal year 2021/2. Similarly, the simple incineration of one ton of waste solvent generates 1,491 kg of CO2, but by recycling it as supplemental fuel, the emissions can be reduced by 99% to 3.7 kg. The company reduced CO2 emissions by 437,000 tons by recycling waste solvent in fiscal year 2021/2. The total reduction of 539,000 tons of CO2 is equivalent to emissions from 190,000 households in one year.

Target Market

  • Demand for industrial waste management has been increasing due to Japan’s 2050 carbon neutral initiatives. High greenhouse gas emitters prefer recycling to incineration, and there is also a higher demand for recycled fuels to replace coal or crude oil.
  • The liquid industrial waste market in Japan is very fragmented with many regional players. Daiseki is number one with a 10% market share. The number two has a 3% market share.

Competitive Advantages

  • The largest liquid industrial waste treatment company in Japan and the only one with a national network.
  • Superior technologies (chemical and biological) in both waste-to-energy and recycling areas.
  • It has a high recycling rate of about 90%.
  • High entry barriers due to license, land, and equipment requirements. Obtaining licenses can take 2-3 years or longer for specific treatment types and types of services offered. Land and equipment require capital outlays, which can be significant.
  • Solid balance sheet: net cash.
  • Strong relationship with customers.

Growth Strategy

  • Distribution: expanding to more regions.
  • Adjacent businesses: treatment of copper and nickel, soil pollution.
  • New business: waste plasterboard recycling, pipe cleaning, and tank cleaning.

ESG

  • Daiseki has very comprehensive ESG reporting and has identified five priority areas: environment, people, safety, communities and society, and compliance, which are in line with the United Nations Sustainable Development Goals (SDGs).
  • Stable management team: Chairman Hiroyuki Ito is the son of the founder. President Hideki Hashira has been with the company since 1990. Insiders own 10% of the company.
  • Regarding governance, Daiseki not only meets the requirements of the Tokyo Stock Exchange, but also meets more stringent requirements set by Global Alpha. For example, it has over one-third of board directors as independent, separate board Chair and CEO, and one female board director. Daiseki is a member of the MSCI Japan Empowering Women Index.

[1] https://www.ft.com/content/77a8292d-2e7f-43a1-9062-2e639c1e6b2a

In last week’s commentary we discussed how green hydrogen can help reach net-zero carbon by 2050. This week, we focus on decarbonization within the aviation sector and how technological evolutions will help reduce carbon emissions.

The transportation sector is a huge contributor to carbon emissions, and is responsible for 29% of the total carbon dioxide (CO2) emissions in the United States (US) and close to 27% in Europe. Compared to the aviation sector, the road transportation sector is far ahead on its decarbonization path.

While other sectors decarbonize quicker, the commercial aviation sector is under pressure to show greater transparency and start establishing greater initiatives in order to cut down its carbon emissions. Two weeks ago, the International Air Transport Association announced that its member airlines, which represent 82% of the world’s airlines, agreed to achieve net-zero carbon emissions by 2050.

The road map to decarbonization will essentially be driven by newer and greener technologies, and by increasing the mix of sustainable aviation fuel. Sustainable aviation fuel would certainly be part of the solutions, but that cannot be the only one. Current availability of sustainable aviation fuel represents only 0.1% of the total fuel supply needed.

Technology, which will continue to evolve, will also help reduce the sector’s carbon emissions. Pratt & Whitney designed GFT engines, which is one of the most sustainable engines in service for single-aisle planes. The GFT engine family, as an example, allows the reduction of up to 20% fuel burn and carbon emissions, while reducing the noise footprint by 75%. Today, more than 1,000 airplanes are equipped with that engine. When considering there are approximately 26,000 airplanes in service globally, the carbon footprint of this sector would be improved as older airplanes get replaced with newer and more efficient aircraft programs.

Another means of transportation for regional and urban travel could emerge in the coming years. Electrical Vertical Take-off and Landing (eVTOL) is a new type of light commercial aircraft currently under flight testing or prototyping. This new transport mode is potentially disruptive to other modes of transportation but should not be a threat to commercial airlines or the automotive sector. Conversely, it represent a sustainable alternative for inner city, short regional travels, air ambulance, and cargo transport.

Thanks to sizable investments made over the past two years, the odds of having eVTOL operating in the future has increased significantly. Since 2019, the eVTOL sector benefited from a capital inflow of approximately $10 billion.

The eVTOL market opportunity could be massive but at this time, it is hard to assess what could be an accurate figure. Lilium, one of the leading original equipment manufacturers (OEM) in that space, estimates that eVTOL could be worth $500 billion by 2040. When taking the cargo market under consideration, this market size expectation could reach $1 trillion. Other experts believe this sector could become an even bigger addressable market. It is no surprise that established aircraft manufacturers announced their own eVTOL programs, or co-investments. Last month, Airbus launched its new CityAirbus Next Gen program to address the urban air mobility market.

Joby Aviation and Volocopter are amongst the leading OEMs that could be the first to obtain their type certification between 2022 and 2024. Other interesting emerging eVTOL developers include Archer Aviation, Lilium, Vertical Aerospace, and Kitty Hawk. Note, the aforementioned companies are not part of Global Alpha’s holdings. Every manufacturer has its own design, propulsion technology, and characteristics, but all of them want to address the future of urban air mobility, focusing on a transportation range of 0-300 miles.

There are several positive advantages to support the eVOTL development over traditional transportation modes:

  • Reduced travel time and the cost of congestion: Lilium anticipates a short distance trip, like JFK airport to New York City could take approximately five minutes, while a longer regional trip between NYC and Boston could take approximately 1hour and 15 minutes. Joby Aviation estimates that there are 4.6 billion hours wasted in traffic in the top 15 U.S. cities every year.
  • Sustainable transportation mode: Lilium estimates that its eVTOL emission footprint would represent 18g CO2 per passenger kilometers. That compares with 189g for commercial aircraft, 142g for gasoline cars, and 31g for electric cars. This is assuming the batteries are produced with renewable energy.
  • Noise reduction: Some models of eVTOLs are expected to generate less than 70 decibels, which is comparable to the noise level of a dishwasher.
  • Lower cost of operation: McKinsey estimates that the cost of operating eVTOL could drop rapidly to $2.5 per seat mile. In comparison, the cost of operating a helicopter today is around $6-$8 per seat mile.
  • Simpler infrastructure needs: The urban air mobility network would require an infrastructure that would likely be much less costly than traditional transportation infrastructure, such as airports. Many of the existing infrastructure could be converted into landing/take-off pads (rooftop buildings, gas stations, parking areas). McKinsey estimates that the cost for 10 landing/take-off pads could reach up to $24 million, which includes the cost of operations.

We understand that a new ecosystem needs to be created, and with that, comes many challenges. The success of the eVTOLs will depend on several factors, such as technical challenges, regulatory approval, the pace of adoption from clients and passengers, and the infrastructure required to accommodate this new transportation mode.

Connor, Clark & Lunn Infrastructure (CC&L Infrastructure) today announced the formation of a strategic partnership with Hy Stor Energy LP (Hy Stor Energy), which will develop, commercialize and operate green hydrogen production, storage, and distribution at scale.

Hy Stor Energy is developing a portfolio of large-scale, fully integrated green hydrogen projects in the United States. The projects will include the on-site production, storage, and delivery of green hydrogen as both a
zero-carbon fuel and a means of storing and producing electricity on demand. This combination of storage and scale will be critical in accelerating the green hydrogen economy in the United States and will support the nation’s transition to a net zero carbon emissions future.

Hy Stor Energy is already permitted for hydrogen storage at multiple locations in the U.S. Gulf Coast, which together will form the backbone of a regional hub. This hydrogen hub will have co-located production, transmission, pipeline, rail and other infrastructure, linking these components to add value while driving economies of scale and attracting end-users. The hub is also expected to attract intellectual capital, spur innovation, create jobs and stimulate the local economy. It will deliver a major source of safe, reliable and 100% carbon free energy that is flexible and available on demand.

“CC&L Infrastructure is excited to further participate in the global energy transition with this partnership,” said Matt O’Brien, President of CC&L Infrastructure. “We believe that the green hydrogen sector is nearing an important inflection point and that its growth will contribute meaningfully to the achievement of net zero carbon emissions targets over the coming decades. The partnership with Hy Stor Energy is a natural evolution of our long-term investment strategy that builds upon our existing expertise in renewable energy. Through this partnership, CC&L Infrastructure and its clients will gain access to a number of attractive investments in a rapidly growing renewable sub-sector as well as technical expertise in green hydrogen and energy storage.”

“Hy Stor Energy is solving the unique challenges of a world transitioning to renewable energy, and we’re developing a model for producing, storing and delivering 100% carbon-free green hydrogen reliably, consistently – and at scale,” said Laura Luce, CEO of Hy Stor Energy. “Our partnership with CC&L Infrastructure will enable us to advance the large-scale development and commercialization of green hydrogen and long-duration storage.”

Green hydrogen is a zero-carbon fuel source and an energy storage mechanism. It is created using renewable energy and a process called electrolysis. Electrolysis uses only two inputs – water and renewable electricity – to produce hydrogen with zero emissions and with oxygen as the only byproduct. Green hydrogen is expected to play a critical role in the global shift away from fossil fuel based sources of energy. Specifically, it can enable the decarbonization of sectors where direct electrification is not practical, offering a viable path towards zero emissions for many industries and jurisdictions.

CC&L Infrastructure’s investment mandate targets traditional and energy infrastructure assets and companies, including power generation, electricity transmission and distribution, and energy storage, among other projects. The firm is an active investor and owner of renewable energy assets and has a current portfolio totaling 1.4 GW of clean energy generating capacity globally. The majority of these assets were acquired during development and the CC&L Infrastructure team has significant experience in both construction oversight and ongoing asset management. The partnership with Hy Stor Energy will build upon this expertise to support further decarbonization efforts and the global energy transition.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with highly attractive risk-return characteristics, long lives and the potential to generate stable cash flows. The firm has been an active investor and owner of renewable energy assets for more than 15 years. Its portfolio includes more than 60 hydro, solar, and wind facilities totaling 1.4 GW of clean energy generating capacity globally. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliates collectively manage over CAD$100 billion in assets. For more information, please visit www.cclinfrastructure.com.

About Hy Stor Energy

Hy Stor Energy is facilitating the transition to a fossil-free energy environment by developing and advancing green hydrogen at scale through the development, commercialization, and operation of green hydrogen hub projects. Large, fully integrated projects produce, store, and deliver 100% carbon-free energy, providing customers with safe and reliable renewable energy on-demand. Developed as part of an integrated hub, these projects couple on-site green hydrogen production with integrated long-duration storage and distribution – using scale to reduce costs. Hy Stor Energy, led by energy storage industry and hydrogen technology veteran Laura L. Luce, has an innovative team with deep expertise and is positioned as a leader in the green hydrogen revolution. For more information, please visit www.hystorenergy.com.

Contact:

Kaitlin Blainey
Director
Connor, Clark & Lunn Infrastructure
(416) 216-8047
[email protected]

Le Groupe financier Connor, Clark & Lunn (Groupe financier CC&L) est heureux d’annoncer qu’il est devenu un participant fondateur d’Engagement climatique Canada (ECC). Il s’agit d’une initiative de collaboration canadienne menée par le secteur de la finance qui vise à favoriser le dialogue entre le milieu financier et les sociétés canadiennes sur les risques et les occasions liés au climat et sur la transition vers une économie carboneutre.

À son lancement, le programme d’ECC compte plus de 25 participants fondateurs, des investisseurs qui gèrent collectivement un actif de plus de 3 000 milliards de dollars. Le Groupe financier CC&L représente ses trois sociétés affiliées d’actions canadiennes, à savoir Gestion de placements Connor, Clark & Lunn Ltée, PCJ Investment Counsel Ltd. et Gestion de placements Scheer, Rowlett & Associés Ltée.

« Le Groupe financier Connor, Clark & Lunn se réjouit à l’idée de collaborer avec d’autres investisseurs institutionnels pour s’attaquer au risque climatique dans l’économie canadienne et à la transition vers la carboneutralité », a déclaré Michael Walsh, directeur général, Groupe financier Connor, Clark & Lunn. « Toutes les sociétés affiliées au Groupe financier CC&L consacrent beaucoup de temps à la recherche sur les risques et les possibilités de placement associés aux facteurs ESG ainsi qu’à la mobilisation auprès des équipes de direction des sociétés sur les enjeux ESG. C’est pourquoi nous considérons ECC comme une occasion en or de nous exprimer d’une seule voix avec plus de force sur la question des changements climatiques. »

L’initiative d’ECC est coordonnée par plusieurs réseaux d’investisseurs, dont l’Association pour l’investissement responsable (AIR), la Shareholder Association for Research and Education (SHARE) et Ceres. Les Principes pour l’investissement responsable (PIR) des Nations Unies soutiennent également le programme.

ECC a été inspiré par le Groupe d’experts sur la finance durable du Canada, qui a formulé en 2019 une série de recommandations visant à mettre le système financier canadien sur la voie d’un avenir à faibles émissions de carbone. L’une des recommandations était d’établir un programme de mobilisation national, semblable à l’initiative mondiale Climate Action 100+, afin de favoriser un dialogue plus vaste et plus cohérent avec les émetteurs canadiens sur les risques et les occasions liés au climat. Et ce programme, c’est Engagement climatique Canada.

Pour en savoir plus sur cette initiative, consultez le site Web d’ECC au www.climateengagement.ca/fr/. 

À propos du Groupe financier Connor, Clark & Lunn Ltée.

Le Groupe financier Connor, Clark & Lunn Ltée (Groupe financier CC&L) est une société de gestion de placements regroupant plusieurs sociétés, qui offre un large éventail de produits et de services de gestion de placements aux investisseurs institutionnels, aux particuliers fortunés et aux conseillers. Cette structure nous procure une envergure et une expertise considérables qui nous permettent d’assumer des fonctions administratives qui ne sont pas liées aux placements tout en laissant nos gestionnaires de placement se concentrer sur ce qu’ils font le mieux grâce à la centralisation des activités liées aux opérations et à la distribution. Possédant des bureaux un peu partout au Canada, de même qu’à Chicago et à Londres, les sociétés affiliées au Groupe financier CC&L gèrent des actifs totalisant plus de 100 milliards de dollars. Pour obtenir de plus amples renseignements, veuillez consulter le site www.cclgroup.com.

Personne-ressource

Blythe Clark
Gestionnaire, Intendance et engagement
Groupe financier Connor, Clark & Lunn
(604) 891-2601
[email protected]

In recent weeks there has been a power crisis in China, brought about by the increase in coal prices. Over the last six months, prices have more than doubled and utility companies have been unable to pass on the increase on users (consumers and industry).

In Europe, a similar crisis is unfolding with the cost of electricity reaching all-time highs, driven by a spike in natural gas prices up 400% since the spring. Earlier in the year, we saw electric grids from Texas to California suffer major outages. Those outages have been used by some commentators to blame the investments made in renewable energy.

Green hydrogen is the best and the only solution to solve many of our energy problems as well as getting to net-zero, even though producing it today is quite expensive. Green hydrogen refers to electrolysis systems in which hydrogen is produced from water using electricity provided by renewable energy. It can also be produced from waste such as biogas, municipal solid waste, and industrial waste.

Electric vehicles may help to reduce our carbon emissions, assuming the electricity to charge them comes from renewables and that the grid can handle millions of vehicles plugging in. Steel, shipping, aviation, and trucking account for 40% of our carbon footprint, to which these are industries that batteries cannot fix.

Hydrogen can serve many objectives beyond decarbonization. Its ability to substitute for natural gas would go a long way to secure a country’s energy independence, something Europe would envy given its dependence on gas imports from Russia. Hydrogen is even exportable by pipeline or ship unlike other renewables limited by electrical grids.

Within the next decade, the scaling up of electrolyzer production and the deployment of fueling infrastructure will bring costs down to a level that is lower than fossil fuels and does not have the limitations of batteries.

The legislative framework

The 2021 United Nations Climate Change Conference (COP26) will take place at the end of October. After a historic year of extreme weather, and following a grim report published in August, we can expect a real sense of urgency and more concrete and measurable commitments following the conference. Major economies have already made commitments; we highlight a few below.

Source: Hexagon Purus Investor presentation

In terms of the hydrogen economy, below are a few of the initiatives that have been announced in Europe:

Source: Ballard Power investor presentation

China is widely recognized as a global leader in clean-energy technology: it controls 60% of the solar supply chain; is home to five of the top 10 wind turbine manufacturers; and leads the world in lithium-ion batteries. In September 2020, Chinese leaders pledged to reach carbon neutrality by 2060. It is no surprise that China wants to become a leader in hydrogen as well. 

Looking at the success of Tesla and the massive investments incumbent automakers are making to electrify their vehicles, we might think that adopting electric vehicles (EV) will be the solution to our problems. As we noted above, car and light trucks are only part of the emissions crisis, accounting for less than 20% of total emissions. But, staying with transportation, let us compare hydrogen with other technologies, as hydrogen is most competitive in heavy-duty motive applications.

The following chart shows the intersection of different technologies.

Source Ballard Power investor presentation.

The addressable market for hydrogen as a transportation fuel is huge, even excluding SUVs and cars:

  • 450,000 buses and intercity coaches,
  • Four million medium/heavy-duty trucks,
  • 8,500 Electric hybrid trains,
  • 8,000 freight ships, and
  • Off-highway vehicles.

However, even if we were to solve the problem of infrastructure (fueling stations), hydrogen for cars and light trucks presents many advantages:

  • They are lighter;
  • They can fill up in just a few minutes; and
  • Their components are more easily recyclables.

A 2017 survey of 1,000 global auto executives concluded that hydrogen fuel cell technology will dominate battery-powered vehicles. More recent comments from Toyota, Honda, Hyundai, BMW, and Mercedes Benz go in the same direction.

One market that is rapidly adopting zero-emission technology is the transit bus market. Although there have been many announcements about electric buses, many studies show that Fuel Cell buses have an advantage in terms of total cost of ownership, even at current prices.

For buses, an ICT study with data collected by the California Air Resources Board (CARB) showed the advantage of hydrogen as fleet size increases:

The Foothill transit study compared the cost of deploying twenty zero-emission buses on a 42-mile roundtrip route. Due to the range limitations of electric buses, it was determined the line would require 34 battery buses versus 23 hydrogen buses.

Orange County Transportation Authority plans to transition 100% of its fleet of 500+ buses to hydrogen.

“The 100 percent FCEBs scenario showed a slightly lower overall cost than the mixed technology fleet given current vehicle, fuel, and support infrastructure pricing. FCEBs offer an extended range and better match to OCTA’s current operating parameters. In comparison, the current range of BEBs may require more vehicles and drivers to meet similar service levels.” Orange County Transportation Authority.

How does Global Alpha participate in the hydrogen economy?

Iwatani (8088 JP)
www.iwatani.com/hydrogen-fueling 


Iwatani is a Japanese company founded in 1930 and a leader in the field of energy, industrial gases and machinery, materials, agri-bio and foods. Since 1941, the company has engaged in initiatives to encourage the widespread use of hydrogen, the ultimate clean energy source as stated in the company’s mission. Iwatani is Japan’s only fully integrated supplier of hydrogen, and presently supplies its base of light and heavy-duty hydrogen-refueling stations and industrial customers via five liquid and 10 gaseous hydrogen production plants throughout the country. In addition, Iwatani is a steering member of the Hydrogen Council, a global initiative of leading energy, transportation, and industry companies, with a united vision and long-term ambitions for hydrogen to foster the energy transition. Iwatani is developing hydrogen-refueling stations with the aim of stimulating new hydrogen demand and supporting the widespread distribution of Fuel Cell Electric Vehicles (FCEV). It currently has 64 refueling stations, a number that doubled in the last three years.

Hexagon composites (HEX NO)
www.hexagongroup.com


This Norwegian company has 1100 employees across 23 global locations. Its solution enables the storage, transport, and conversion to clean energy in a wide range of mobility, industrial, and consumer applications:

From Hexagon composites website

Clean Energy Fuels (CLNE US)
www.cleanenergyfuels.com


We profiled Clean Energy Fuels in an earlier commentary, on May 6, 2021.

Although we discussed hydrogen, renewable natural gas, which can then be reformed to produce hydrogen, is the only transportation fuel today that offers a negative carbon footprint.

L’Action de grâce est le moment de l’année où nous réfléchissons aux aspects heureux de notre vie et témoignons de notre reconnaissance envers nos amis, notre famille et ceux qui nous soutiennent. Chez CC&L, nous sommes reconnaissants pour nos banques alimentaires locales et pour l’aide qu’elles continuent d’apporter dans les collectivités où nous vivons et travaillons. 

Les banques alimentaires ont joué un rôle essentiel dans la vie de nombreuses personnes, en particulier parce que la COVID-19 a entraîné davantage d’insécurité alimentaire pour plus de familles partout au pays. Depuis le début de la pandémie, les banques alimentaires ont enregistré une hausse de plus de 50 % du nombre de personnes ayant besoin de leurs services. Si la tendance actuelle se maintient, les banques alimentaires de Toronto enregistreront 1,4 million de visites d’ici la fin de 2021. 

Pendant plusieurs années, la Fondation CC&L a donné à la Daily Bread Food Bank de Toronto et a récemment accru son soutien en s’engageant à apporter son aide sur plusieurs années. Fondée en 1983, Daily Bread est devenue l’une des plus importantes banques alimentaires au Canada. Elle vise à ce que personne ne souffre de la faim ou se heurte à des obstacles pour accéder à de la nourriture. Elle offre des repas sains et nutritifs aux personnes qui vivent dans l’insécurité alimentaire au moyen de presque 200 programmes alimentaires.

« Bien qu’un sentiment de normalité revienne dans notre ville, la réalité est très différente pour des dizaines de milliers de personnes vivant dans la pauvreté. En août 2021, plus de 113 000 personnes se sont présentées aux banques alimentaires membres de Daily Bread, soit une hausse de 67 % par rapport à la même période l’an dernier », affirme Neil Hetherington, chef de la direction de Daily Bread Food Bank. « Nous sommes profondément reconnaissants envers CC&L d’avoir accepté, à l’occasion de l’Action de grâces, de verser un don généreux qui garantira que toutes les personnes, adultes, aînés ou enfants, de notre ville qui vivent dans l’insécurité alimentaire pourront se procurer des aliments. »

À propos de la Fondation Connor, Clark & Lunn

Créée en 1999, la Fondation CC&L est soutenue par le Groupe financier CC&L et ses sociétés affiliées, et reçoit des demandes de ses clients, de ses employés et d’autres personnes en vue de financer des programmes et des organismes sans but lucratif voués à la promotion d’un meilleur environnement, à l’amélioration de l’éducation, à l’avancement des sciences et de la médecine, au développement de collectivités plus dynamiques et aux arts.

Personne-ressource

Colin Aubrey
Directeur général
Fondation Connor, Clark & Lunn
[email protected]

To enact change, more and more investors expect their money managers to hold companies accountable on environmental, social, and governance (ESG) issues. It aligns with a backdrop of social discourse from climate change and carbon emissions to equality and racism, alongside an outspoken, socially conscious, millennial generation that has integrated ESG into investment decisions and client portfolios.

There is a lot of conflicting information about what ESG investing is and why it should matter to investors – not to mention many misconceptions around whether ESG factors help or hinder investment performance. 

This article highlights how ESG investing has evolved and what it means today, shares our embrace of ESG factors in decision-making, and shows how to make your investments matter without sacrificing return potential.

How has the concept of ESG investing evolved?

Making investment decisions based on ESG-related factors is not new, although it has evolved significantly over the past 25 years. Early on, many ESG-related investment approaches took an exclusionary stance. They avoided investments in specific industries or companies that were associated with negative environmental or human impacts or had a reputation for poor or dangerous work conditions.  

In recent years, such investment approaches have matured and now align with different investors’ unique needs and objectives. At CC&L Private Capital, we typically break ESG-related investment approaches into three categories: 

  • ESG investing: Considering environmental, social, and governance issues as risk factors and integrating each into our investment process. This analysis and decision-making criteria informs our discipline when evaluating a stock, bond, or alternative investment in order to drive better risk-adjusted returns
  • Socially responsible investing (SRI): Use environmental, social, and governance risk factors to screen and filter specific risk exposures. These screening criteria are clearly defined but remain secondary to the primary objective of maximizing risk-adjusted investment returns. 
  • Impact Investing: An approach that takes the concept of SRI one step further, where all investments have a dual purpose: achieving a positive ESG impact and generating investment returns.

ESG investing, as defined above, should be relevant to all investors because it focuses on value. It is another important tool used to evaluate potential investments and determine return potential.

We embrace ESG factors in decision-making

At CC&L Private Capital, we integrate ESG factors into all of our investment processes, including traditional and alternative asset classes. This process identifies good environmental stewards that pay strong attention to health, safety, and social issues, and are well-governed.

By integrating ESG factors into our investment approach, we indirectly reward companies who embrace good corporate citizenship and provide the impetus to change for those that may be lagging. We are able to hold companies accountable and help them improve their own ESG activities. 

We also use a  »positive screen » approach – recognizing the best-in-class players in an industry or sector and encouraging others to make similar changes. For example, we might invest in a leading oil & gas company that takes environmental issues seriously, builds strong relationships with indigenous communities, and embraces diversity within their governance structures. 

In a world where ESG issues are growing in importance, we believe in working with clients and discussing an approach that better aligns with their values. It will help to generate improved risk-adjusted investment returns over the long term while contributing to the betterment of Canada and the world. 

Making investments that matter

ESG investing does not mean investors must choose between making socially-conscious investments and maximizing return potential. You can achieve both. Research has shown that, all else being equal, companies with sustainable business practices and a strong attention to corporate governance are likely to have less risk and perform better financially than those companies without. Investing in such companies leads to long-term value creation and contribute to building a better world. 

Find out more

In today’s investment environment, getting the returns you want can be difficult. To learn how you can build a diversified portfolio that achieves your financial goals while managing risk, please read our Portfolio Guide – Beyond Stocks and Bonds.

If you would like to find out more about our approach to ESG investing or learn how we can help you achieve your investment goals, please contact us.

This post is for information only and is not intended as investment advice. The views expressed are those of the author at the time of publication and are subject to change at any time.