Divestment From Fossil Fuels For a Low Carbon Future

Sam Taha MCA Board Member

Since March 2020 I started Investing in the stock market. I had limited knowledge in investing before, but since then I did fair bit of reading and experience in trading that I would like to share without having to be liable for any advice that I would give because this advice is not a professional one and I have no credentials in regards to being a financial planner or a financial advisor. This information is solely in relation to companies and securities that I have researched and found relatively green compared to the general market; in other words, these are companies that work in alliance to the goal of mitigation of climate change and aim in reducing pollution in general. It should be noted that the term green-washing is a common practice now a days exercised by many companies and I have my share in being mislead by some of these messages even buying stocks that turned out to be nothing but a green-wash for the time being; they may change their act in the future, but we don’t know if they will.

Disclaimer: I am not a financial advisor and I have interest in some of the companies or securities in the list because I have bought stocks in them. I am not liable for any financial loss you may incur from reading this list; I am also not liable for unintentional false information in regards to the value or the greenness of any securities in the list; the research I have made is solely based on my own experience as a lay investor with no significant knowledge about investing until recently.

This article can serve as a simple introduction to the project of divestment from fossil-fuels made by lay person interested in the matter and not as a general time-tested framework to base your investment decisions on.

I placed individual items within categories, here we go.

Energy, Chemistry, Mining & Utility:

OTC:GCTAF – Siemens Gamesa Renewable Energy SA – from its name lots of potential in the wind farms industry; they used to be called Gamesa, a Spanish energy company, recently acquired by Siemens; they pay tiny dividend; their growth has been steady but small in the last several years.

TSX:INE – Innergex Renewable Energy Inc, they only do renewable energy, they pay small dividend

TSX:RNW – TransAlta Renewables Inc, Canada-based company, mainly renewables, some natural gas, but they’re more focused on renewables, they pay a good dividend

NYSE:ALB – Albemarle Corp, a special chemistry company and the largest producer of lithium which will benefit from the battery boom; they develop technology for electrification of transport; sadly they’re also involved in oil refinery business

NYSE:NEE – Nextera Energy Inc, majority of their work is green electricity expansion in Florida; on the flip side, they have some assets in gas infrastructure

TSX:LAC – Lithium Americas Corp, a lithium miner

TSX:NLC – Neo Lithium Corp, a lithium miner

OTC:DOGEF – Orsted A/S, large energy company doing mainly renewables like wind farms, solar and biofuel.

OTC:IBDSF – Iberdrola SA, Spanish energy company doing renewables but also involved in gas sale and distribution; they pay fair dividend

Proton Technologies – they’re not listed yet, they hope to supply 10% of world’s energy demand from a form of green Hydrogen; they’re conducting a pilot project in trying to sequester carbon and burry it underground from extracting Hydrogen from underground; they’re Canadian company. I keep watching them to see if they get listed as public company in the future.

Tech:

NASDAQ:AAPL – Apple Inc, fairly green, probably the greenest technology company but they should do better with recycling and reuse projects

TSX:BB – Blackberry, they largely rebranded to developing software and gave up their hardware business; now they gained traction because of autonomous vehicle QNX software and deal with Amazon Web Services to develop and market a new Intelligent Vehicle Data Platform dubbed BlackBerry IVY.

TSX:MG – Magna International Inc, a mobility technology company capable of making car parts and made many deals for electric vehicle start-ups including the Fisker Ocean, an electric SUV planned for marketing in fourth quarter of 2022.

NASDAQ:PLUG – Plug Power Inc, Hydrogen fuel cell component maker based in the states

TSX:OTEX – Open Text Corp, good Canadian tech company, but not sure how green they are in general, do your research

NASDAQ:TSLA – Tesla Inc, electric vehicle maker, stock grew more 12 times as of current date from its 52-week lowest point in March 2020 due to increase in revenue throughout 2020 in light of the pandemic. This drove the entire EV sector to huge growths in value regardless of their earnings. The stock is highly over-valued but that’s believed to be due to the prospects of wide EV adoption replacing internal combustion engine in the coming decades in the 21st century. I personally sold all my stocks in September of 2020 and it was a mistake, but I wouldn’t buy yet. A lot of investors are still bullish on it so make sure you tread carefully and take your own risk.

NYSE:NIO – Chinese start-up; now called the Chinese Tesla, they’re Chinese so be careful because of china-US trade war that would likely continue with the Biden administration

NASDAQ:WKHS – Workhorse Group Inc, another EV maker, especially medium-duty trucks and light aircrafts; they’re markedly over-valued but still have significant potential already securing many purchase deals.

TSX:BLDP – Ballard Power Systems, one of my favorites; Canadian company, top of their line in Hydrogen fuel-cell technology; they’re over-valued like many other green companies and they beat the market during the pandemic like many others. Analysts remain bullish on it to some degree.

NASDAQ:FSLR – large solar company, US based, they may have questionable track record in being financial successful, something to consider

NASDAQ:SPWR – another US-based solar company; again some historical downs; the only thing working in their favor is that solar is one of the technologies that would essential in the way out of climate change

NASDAQ:AMD – well-known microchip maker; good prospects for earning, but not sure how green they are

NYSE:HON – Honeywell International Inc, sadly they have military contracts; they’re large technology and manufacturing company

TSX:NFI – NFI Group Inc, Canadian bus and truck manufacturer under several brands, mainly involved in battery electric, trolley-electric, bio-diesel, and fuel cell drive systems. On the flip side, they provide engines operated by natural gas which is far from clean.

SPAC’s and Starters:

NYSE:NGA – Northern Genesis Acquisition Crop, a blank cheque company involved in funding a Montreal-based electric bus company Lion. Like many SPACs involved in green initiatives, they already beat the market since their inception about 1 month ago despite the fact that most start-ups are not making any money from business operations rather than value acquired through prospects of their future potential in being profitable. I made sure that I have shares with them soon after their IPO was approved. Lion will be listed under the ticker symbol “NYSE:LEV” in the near future.

NASDAQ:NKLA – Nikola Corporation, a battery-electric and hydrogen trucking start-up, has many failures so far and change in management and being subject to fraud allegations; you may easily lose your money in the long-run, but something to consider if you are willing to take a lot of risk

NYSE:QS – Quantumscape Corp, a start-up involved in alleged breakthrough solid-state lithium-metal battery cell that’s allegedly energy-dense and safer than current lithium-ion battery; they’re backed by Bill Gates, JB Straubel (one of Tesla’s founders) and one of the early inventors of the lithium-ion battery. However, they’re currently facing a class-action law suit for allegedly misleading investors in exaggerating the perks of their product, specifically, the charging cycles are limited to 250 leaving the battery dead after 75k miles of aggressive driving; this is likely lower in low temperatures. I still have shares with them and I am not selling; I am hopeful that they can work their challenges.

NYSE:FSR – Fisker Inc., EV start-up hoping to commercialize their flagship product named Fisker Ocean, a sustainable competitively (relatively cheap) priced SUV that looks and functions like a traditional SUV, in late 2022.

ETFs, and mutual funds:

NYSE:LIT – Global X Lithium & Battery Tech ETF, involved in the lithium mining and production industry; they’re not so green, but their net effect is greener in the long-term because they help advance the revolution of electrification of transportation

NYSE:EVX – VanEck Vectors Environmental Services ETF, basket of securities mainly involved around waste collection, recycling, and environmental consulting in about 80% of its assets.

TSX:ETHI – Horizons Global Sustainability Leaders Index ETF, this ETF is a basket of many leading large-cap equity securities of companies that are global climate change leaders (measured by their relative carbon efficiency)

NEI Environmental Leaders Series PF (Fund), one of a series of mutual funds that is highly ESG-conscious but I haven’t got the experience in investing in mutual funds in general and ETFs now a days are more popular because you don’t need a finance person to sign up with. Mutual funds are heavily managed; therefore, they have significantly higher MER fees sometimes to the point of offsetting the gains in capital that you would hope to achieve. On the flip side they aim for higher growth but they take higher risk to do so.

HIP Sustainable Real Estate ESG Portfolio, another mutual fund involved in sustainable real-estate business.

NASDAG:SDG – iShares MSCI global Impact ETF – strong social consciousness practices, almost fossil fuel free, one of the best ETFs in being green and socially responsible. The ETF usually chooses assets that address at least one of the world’s major social and environmental challenges as identified by the United Nations Sustainable Development Goals

Banks and Investing:

NYSE:BLK – BlackRock, sadly they’re not so green after all; now they’re rating well below other competitors in their ESG measured by 3rd party NGO; their CEO made big statements about cleaning up their portfolio, but they were involved in funding new fossil fuel projects recently along with larger funding for renewables

NYSE:MS – Morgan Stanley, again they have big investments with renewables, but they’re not fossil-fuel clean; they’re better in their class in terms of being fossil-fuel clean but they have a long way to go like many financial groups.

TSX:RY – Royal Bank of Canada, all Canadian banks (the big 5) are heavy on fossil-fuel investments and loans unfortunately including Royal Bank; probably Royal bank has the largest loans given to renewables; they’re getting better but I am not invested in them yet and I would rather wait until they clean their act and hopefully the other Canadian banks. In general, banks pay good dividends, certainly not all of them.

On a final note, I think divestment should be a powerful indispensible tool in the revolution in decarbonising our economy for a low carbon future. The sooner we do it, the faster we solve our biggest challenge of the 21st century and likely our biggest challenge in this decade the 2020’s.

I hope you do your own research knowing that securities change all the time and the winners today may not be the winners tomorrow.