Not only is the conflict between Russia and Ukraine a disaster from a humanitarian perspective which should not be belittled, it could also have a knock on effect on the wellbeing of the planet. Russia historically has been the world’s second-largest gas producer, making up 17% of global output. Until the introduction of recent sanctions, 70% of Russia’s gas exports went to Europe.
If the import of gas from Russia is to be restricted, alternative energy sources need to be found. Ideally, this would appear to be the time to further promote the use of solar, wind and wave energy to generate electricity. However, with the backdrop of significant increases to the cost of living in many parts of the world, how energy supplies are secured is likely to be driven by cost. Therefore, there is a good chance that Russian gas will be replaced by reactivating the extraction of fossil fuels from remaining coal fields and in the UK further exploitation of North Sea oil. The largest emitters of fossil fuels, China, India, and the US show little interest in changing their current approach and in fact, the former (China and India) are cementing their existing reliance on energy supplies with Russia.
On a more positive note, Egypt hosts the next Conference of the Parties (COP27), November 2022. This event brings almost every country in the world together for a global climate summit and to reach agreement on how this should be tackled. Each country is then responsible for mapping out (successfully or unsuccessfully) its own plan as to how climate change issues will be addressed.
It is easy to see how at an individual level, people can become despondent around the impact of their own efforts to affect the wellbeing of the planet. However, through growing pressure on companies (investing in their shares) from pension trustees and scheme members, charities and insurance companies, positive change around corporate behaviour can be created. Companies can be compelled to rethink their strategy around their responsibility to the environment, recyclability within their manufacturing process and the equal promotion of gender and fair employment and labour rights. We have noticed at Wingate a significant increase in the number of our clients both existing and new that wish to discuss and put in place socially responsible investment portfolios.
If you would like to discuss your approach to socially responsible investing do contact the financial planning team.