In the past few years, we’ve seen six ESG megatrends on the rise with trillions of dollars being invested into them, from cloud computing and clean water, to finance, resource efficiency and the mega of ESG megatrends--EVs.
If 2020 was the year that broke the ESG bank. This year, and next, might see investors start to reap the rewards of Biden’s ultimate “green presidency”.
In March, Biden unveiled a $2.3-trillion infrastructure plan.
On Earth Day, Biden pledged to half U.S. greenhouse gas emissions by 2030.
According to CNBC, Biden’s climate agenda will likely be a “windfall for ESG investors”.
Gains investors have made so far this year have been stunning enough …
Tesla’s (NASDAQ:TSLA) share price is up over $400 in a year.
Blink Charging (NASDAQ:BLNK) has gone from $1.66 to over $35 in that same time period.
Nio (NYSE:NIO) surged from $3.60 to $34.
Facedrive (OTCMKTS:FD) shares have more than doubled.
Enphase Energy (NASDAQ:ENPH) gained nearly 600% in 2020 alone.
And we’re just getting started. Double the money is set to pour into this sector from the Biden administration. That’s fantastic news for investors who’ve gone green.
It looks like Canadian Facedrive (TSXV:FD,OTC:FDVRF), saw the ESG trend before it went mega, and swooped in with a series of acquisitions over the past year designed to leverage the power of tech-driven eco-friendly verticals that could help to reshape the world.
They used 2020 to solidify their presence in various initiatives from pioneering EV-focused ride-sharing and food delivery to disruptive EV car subscriptions--across North America. They’re even aiming to be pioneers on the frontlines of the pandemic with proprietary contact tracing technology and wearables that could help get Canadians back to work, safely.
With shares surging over 550% in the past year, Facedrive may be getting ready to kick things into overdrive.
The Boom Before the Boom: Facedrive Was There First
The ESG boom was on even before Biden came to office.
Try as it might, the Trump administration could not staunch the inevitable flow of money into ESG. Sustainable investing became the biggest buzzword on Wall Street, and its leader--Black Rock--became the king of the cause.
It’s all about money. Lack of sustainability is now a risk that shareholders don’t want to shoulder. Money managers appear to have seen the light of day.
BlackRock, the largest asset manager in the world, plans to have $1.2 trillion in ESG assets within the next 10 years.
And it’s estimated that 1/3 of all assets under management in the U.S. are already sustainably invested...
That’s potentially $17.1 trillion invested in the companies making giant steps to put people and the planet first.
With Facedrive, their customers have the choice of hailing a ride from an electric, hybrid, or gas-powered vehicle, all without paying an extra premium for the option.
And after they arrive at their final stop, the in-app algorithm calculates the carbon footprint of each journey and a portion of the fare is set aside to plant trees, offsetting part of the carbon footprint from the ride.
With the help of next-gen technology and partnerships, they’re making it easier for customers to make more eco-friendly choices. And they’re working with local authorities--not against them--to bolster business.
In its biggest move late last year, Facedrive acquired Steer, a subscription-based ride sharing company that offers electric vehicles, from the largest clean energy producer in the United States--giant Exelon.
Steer’s ride sharing subscription model, which includes EVs, is aiming to challenge traditional car ownership by making it so easy … so seamless … and so affordable for users to have their own virtual showroom of EVs delivered to their door-step, on-demand.
It was the perfect fit for Facedrive, which is already aiming to be a fierce competitor to Uber in certain ridesharing markets. Now, it plans to compete with car dealerships at large in both the U.S. and Canada.
But with ESG companies seeing a record year in 2020, the markets are already looking forward to what the rest of this year holds.
2021: The Calm Before the ESG Storm
ESG funds are still breaking money inflow records, even as markets pause for breath ahead of the big Biden breakout.
ESG-focused companies are seeing higher returns, stronger earnings growth and bigger dividends.
It’s all about investment performance.
That’s why global ESG assets under management (AUM) grew from $6 billion in 2015 to $150 billion in 2020.
There looks to be no stopping this march forward.
Big money just seems to keep getting bigger.
Morgan Stanley has committed to mobilizing $1 trillion by 2030 for sustainable solutions to climate change. And that’s on top of the $1 trillion target some analysts are putting on ESG investments.
Armando Senra, head of BlackRock’s iShares America, says ESG funds will have raked in over $21 billion just in Q1 2021--almost the same it pulled in over the entire year in 2019.
Senra says ESG could become a $1-trillion category by 2030, noting to CNBC that “we’re just at the very beginning” of what could be a decade-long growth story.
With a new green president at the helm, ESG-focused companies may start reaping some of the benefits for their shareholders, in a big way.
We think Facedrive’s business model looks set to benefit from these ESG tailwinds. And it doesn't hurt that they’ve made strategic alliances and investments in content companies for A-list celebrities like Will Smith and Jada Pinkett Smith… a company founded by Super Bowl-winning quarterback Russell Wilson…
These relationships could help them expand their business into the U.S. and push their eco-friendly mission ahead with apps, apparel, and more.
With names like these getting onboard, it’s proving that the ESG boom has gone far beyond just a few people buying electric vehicles.
It’s becoming a lifestyle shift that will touch nearly all areas of our economy.
Now, they have a relationship with Exelon, too, thanks to their acquisition of Steer, which included a $2-million strategic investment by Exelon’s wholly-owned subsidiary, Exelorate Enterprises, LLC.
Facedrive On the Frontlines of the Pandemic
Supporting the health of North America’s citizens during these unprecedented times is paramount. Getting them back to work safely is critical to the economy.
That’s pushed many ESG-focused companies like Facedrive, to take a more hands on approach to COVID-19.
Early last year, Facedrive partnered up with the University of Waterloo and MT>Ventures to create TraceSCAN, a wearable technology used for contact tracing.
It offers an innovative approach to tracking that doesn’t rely on cell phones.
That could cover massive groups of people previously left without reliable contact tracing solutions to stop the spread...
Children, senior citizens, low-income individuals, and employees not able to use phones on the job.
And Facedrive has signed agreements with both the government of Ontario and Canada’s largest airline, Air Canada, aiming to implement this technology.
So, 2020 was the tipping point of the ESG boom. A “green president” has tipped it with a proposed multi-trillion-dollar infrastructure pledge that is ESG all the way.
Unsurprisingly, some analysts are now predicting this will “usher in an unprecedented boom for ESG investments” and we think Facedrive could have some big opportunities in 2021 as a result.
The ESG Boom Has Arrived
Renewable energy providers are some of the top picks for ESG investors, but few have performed as well as Enphase Energy (NASDAQ:ENPH). Enphase Energy is a leading global supplier of microinverters and solar panels. They have been at the forefront of solar innovation, bringing new technology to market faster than any other company in the industry. The Enphase IQ 7+ system includes an innovative self-learning algorithm that monitors every module on your roof for performance optimization, ensuring you get more from your installation day after day, year after year. Enphase's sleek design makes installing their efficient solar solutions easy for homeowners by simplifying wiring and eliminating the need for bulky junction boxes or expensive mounting racks.
Despite the tough first half of the year, however, Enphase has remained a favorite on Wall Street. Year-to-date, Enphase has seen its share price rise by leaps and bounds. And it’s only just getting started. As the renewable push kicks into high gear, and with the United States expected to spend over $1.7 trillion on green energy initiatives over the next decade, Enphase might just emerge as one of the biggest winners.
NextEra Energy (NYSE:NEE) is another shining star in the renewable world. They have a wide range of products and services for both residential and commercial customers. One of their key offerings is solar power which has been growing at an exponential rate over the past few years due to global climate change initiatives.
NextEra Energy works with many different companies like Apple, Amazon, Nestle Waters North America among others to help them become more sustainable by investing in renewable energy sources as well as helping them reduce their carbon footprint through providing quality products and services that lower utility bills.
NextEra is the world’s leading producer of wind and solar energy, so it’s no surprise that it has received some love from the ‘millennial dollar.’ In fact, in 2018, the company was the number one capital investor in green energy infrastructure, and fifth largest capital investor across all sectors. No other company has been more active in reducing carbon emissions. And they’re just getting started. By 2025, the company aims to reduce their own emissions by 67 percent while doubling their electricity production from a 2005 benchmark. To put this into perspective, if all of America’s utilities were able to achieve NextEra Energy’s projected 2025 emissions rate, absolute CO2 emissions for the power sector would be approximately 75% lower than they were in 2005.
Not even the supermajors in the oil industry can ignore the ESG demand from investors. They’ve been diversifying their portfolios to hedge their bets in the rapidly changing new reality of energy. And no other oil major takes this more seriously than Total (NYSE:TOT). Total has led the charge to go green. It is not only aware of the needs that are not being met by a significant portion of the world’s growing population, it is also hyper-aware of the looming climate crisis if changes are not made.
As such, Total is not only betting big on renewable energy, it is also doing its part in reducing emissions in its day-to-day activities. Patrick Pouyanné, Chairman and Chief Executive Officer at Total noted, “It’s our job to meet growing energy needs while reducing carbon emissions.”
It's also one of the most conscious companies in the business. Total checks every box in the ESG checklist. It is promoting diversity and safety, making massive changes in its operations to ensure that its business is environmentally sound, and has even committed to going carbon neutral by 2050 or sooner. It’s no surprise that shareholders are loving its forward-thinking approach.
BlackRock (NYSE:BLK) needs no introduction. It is the world’s largest global investment management corporation, with over $7.4 trillion in assets under management. With clients in over 100 different countries, it is the de facto leader in its field. And just a few years ago, BlackRock underwent a major shift in its investment strategy, prioritizing stocks with high ESG ratings. BlackRock’s focus on technology and sustainability has fueled the new trend in the marketplace, pushing even more investors to consciously consider where they put their money.
There’s a reason BlackRock is blowing Wall Street out of the water right now--sustainable investing. The new king of Wall Street recognized the trend well before the competition and bought into the sustainable investing ethos long ago and is now looking to take its sustainable portfolio from $90 billion to more than a trillion dollars.
In June of last year, BlackRock even launched a new suite of funds focused on the ESG trend. The funds include; iShares ESG Aware Conservative Allocation ETF (EAOK); the iShares ESG Aware Moderate Allocation ETF (EAOM); the iShares ESG Aware Growth Allocation ETF (EAOR); and the iShares ESG Aware Aggressive Allocation ETF (EAOA).
Uber Technologies (NYSE:UBER) is another way to capitalize on the EV hype. Despite being a bit late to jump on the sustainability train, Uber is finally making some changes in its operations. In late 2019, a scathing report about how much the ride-sharing giant was contributing to emissions emerged, suggesting that Uber and Lyft added as much as 70% more to global emissions than traditional alternatives prompting backlash among environmentalists.
In fact, Uber even rolled out a new program to help drivers transition to electric vehicles. The $800 million ‘Green Future’ initiative, with the help of Chevrolet, allows drivers to get a near-$3000 discount on Bolt EV Premiers. Additionally, drivers of low-emission vehicles will also get a small bonus for every ride they complete. They will also get a discount on specific charging platforms to help cut costs during the transition.
“As the largest mobility platform in the world, we know that our impact goes beyond our technology. We want to do our part to build back better and support a green recovery in our cities and communities,” CEO Dara Khosrowshahi noted on the company’s website.
Canada’s Silicon Valley is joining the ESG race, too. Shopify Inc (NASDAQ:SHOP; TSX:SH) is an absolute beast in the e-commerce world. In fact, because of its simple-to-use platform, it would be hard to have not stumbled onto a shop built with its technology. More than 1,000,000 businesses rely on Shopify’s real-time e-commerce solutions, including Tesla, Budweiser and Red Bull, among many others. Shopify makes purchasing goods and services easy for anyone – and in a time where convenience is king, Shopify surely has staying power.
In addition to its revolutionary approach on e-commerce, Shopify is also delving into blockchain technology, making it a promising pick for investors, especially given that the sector is red hot right now. Its clients are even able to accept bitcoin and a variety of other cryptocurrencies as payments with a few clicks.
Global lockdowns accelerated Shopify’s already-tremendous growth. Since March 2020 alone, Shopify has seen its price rise from just $495 per share to a high of $1800 per share before settling down to its current price. The company has already shown its potential, but as it continues to grow, so will its innovative solutions for businesses, and by extension, its share price. Shopify is one of the few e-commerce companies that may very well be able to compete with the likes of Amazon.
Magna International (NYSE:MGA, TSX:MG) is an interesting roundabout way get in on the exciting resource and battery markets without betting big on one of the new unproven stocks captivating millennials right now. The six-decade-year-old manufacturing giant provides mobility technology for automakers of all types. From GM and Ford to luxury brands like BMW and Tesla, Magna is a master at striking deals. And it’s clear to see why. The company has the experience and reputation that automakers are looking for.
Over 10 years ago, Magna was already making major moves in the battery market, investing over half a billion dollars in battery production while the market was still in its infancy. At the time, electric vehicles as we know them had barely hit the scene, with Tesla launching its premiere car just two years prior.
Magna’s massive investment has paid if in a big way, however. Since its battery bet, the company has seen its valuation soar by tens of billions of dollars, and it has solidified itself as one of the leaders in the business. With the semiconductor industry in chaos, and another looming lithium and helium shortage, it will be interesting to see how Magna deals with these challenges.
Maple Leaf Foods (TSX:MFI) is another veteran in the Canadian foods realm. Since 1991, Maple Leaf has been making aggressive acquisitions, supplying high-quality foods, and leading in new innovations to ensure the highest quality products for all of its consumers around Canada. And just last year, it announced its plans to dive head first into the plant-based foods industry with a $310 million facility in Shelbyville, Indiana.
More than that, however, Maple Leaf Foods is also committed to slashing its own carbon footprint. In fact, on November 7, 2019, the company announced that it was the first major carbon-neutral food company – a huge claim to fame in a world racing to go green.
The Very Good Food Company Inc. (CSE:VERY) is a Canadian company that is quickly gaining a lot of ground in the market. With the slogan, “we believe in butchering beans, not animals,” they’re looking to tap into the plant-based niche in a hurry. And it’s resonated very well with investors.
Since its IPO in June, the Very Good Food Company has seen its share price grow by over 70%, and it’s showing no signs of slowing. In just a few short months, the company has opened several new facilities, signed a string of deals, and is quickly carving out its place in Canada’s fast-growing plant-based lifestyle scene.
GreenPower Motor (TSX:GPV) is a promising young electric bus manufacturer. Currently, its focus is primarily on the North American market, but it has plenty of room to grow as the industry takes off. Founded over a decade ago, GreenPower has been on the frontlines of the electric movement, manufacturing affordable battery-electric busses and trucks. From school busses to long-distance public transit, GreenPower’s impact on the sector can’t be ignored.
Year-to-date, GreenPower Motor has seen its share price soar from $2.03 to $24.45. That means investors have seen 1104% gains this year alone. And with this red-hot sector only going up, GreenPower will likely continue to impress.
By. Louise Matthias
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This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the demand for ride sharing services will grow; that Steer can help change car ownership in favor of subscription services; that new tech deals will be signed by Facedrive and deals signed already will increase company revenues; that Facedrive will achieve its plans for manufacturing and selling Tracescan devices; that Facedrive will be able to expand to the US and globally; that Facedrive will be able to fund its capital requirements in the near term and long term; and that Facedrive will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that riders are not as attracted to EV rides as expected; that competitors may offer better or cheaper alternatives to the Facedrive businesses; changing governmental laws and policies; the company’s ability to obtain and retain necessary licensing in each geographical area in which it operates; the success of the company’s expansion activities and whether markets justify additional expansion; the ability of the company to attract drivers who have electric vehicles and hybrid cars; and that the products co-branded by Facedrive may not be as merchantable as expected. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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