The $30 Trillion ESG Sector Is Set To Explode In 2021
16 min readWith trillions of dollars pouring into ESG funds last year, 2020 has been called the “tipping point” year for this mega-trend.
But many are predicting that the ESG boom will take off again on January 20th, 2021.
That’s because after the most dramatic election we’ve seen in recent history, a “green president” is set to take office with plans to shake things up on day 1.
Biden has called climate change “the number one issue facing humanity.”
This is why CNBC says, “Biden’s Presidency Could be a Boost for Impact Investing.”
And Forbes says, “Socially Responsible Investing Is Likely To Gain Momentum Under Biden.”
But while there’s still much we don’t know about what policies will be signed into law in the days ahead, this much is clear.
After pledging to rejoin the Paris Climate Accord on Day 1 of his presidency…
Tackling climate change and environmental issues will be at the top of the list of priorities over the next several years.
This is incredible news for investors who have already seen massive gains in green companies throughout 2020.
Enphase Energy jumped 490% in 2020…
Digital Turbine soared 673%…
And Tesla became one of the biggest companies on the market with incredible 684% gains.
But one Canadian company saw this mega-trend coming years ago. And they used 2020 as a springboard to launch themselves to the next level.
Facedrive (TSXV:FD,OTC:FDVRF), the eco-friendly ridesharing company inked a number of major partnerships and deals over the last year…
Including government agencies, A-list celebrities, and global tech titans.
And with lockdowns hurting many in the ridesharing industry, they grew their business by acquiring companies in the food delivery space…
Adding thousands of restaurant partners and tens of thousands of new customers.
That’s why Facedrive’s shares have surged upwards a massive 589% in the last year.
Across the markets, we saw ESG companies soaring and outperforming the rest.
But now, with a president who’s pledged to make climate change a top priority, many are predicting this mega-trend will take off further starting January 20th.
Building the Foundation for the ESG Boom
Throughout the last year, we saw asset managers, private companies, and local governments band together to push this wave of “sustainable investing” forward.
And while the federal government has mostly taken steps to slow down that progress, rolling back environmental regulations and leaving the Paris Climate Accord…
That’s done nothing to slow the momentum that’s been building behind the companies putting ESG issues first.
Peter Krull, the founder, CEO, and director of investments at Earth Equity Advisors says, “The reality is we’ve had more growth over the last four years than we did over the previous 12 years.”
“After the 2016 election, people said that if the government isn’t going to work on these issues, we’re going to have to do it for ourselves.”
And the chief impact officer at Weatherby Asset Management, Justina Lai, added that the headwinds from the last administration “ended up rallying municipal, state and local governments as well as the private sector.”
“Other parts of the economy rose to the occasion.”
That’s why smart money is piling in to the tune of trillions of dollars.
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 $17.1 trillion invested in the companies making giant steps to put people and the planet first.
And Facedrive (TSXV:FD,OTC:FDVRF) is one of the companies riding the ESG boom to a banner year.
They’re bringing electric vehicles to the ridesharing industry, which has been surprisingly bad for rising carbon emissions.
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 crunches the numbers, calculating how much CO2 was created during the journey.
Then a portion of the fare is set aside to plant trees, offsetting the carbon footprint from the ride.
So when you ride, Facedrive plants a tree.
With the help of next-gen technology and partnerships, they’re making it easy for customers to make a more eco-friendly choice if they choose.
Plus, they recently acquired the electric vehicle company, Steer, from the largest clean energy producer in the United States.
Steer’s subscription model for EV cars is putting a major twist on the traditional car ownership model.
And that fits right in line with Facedrive, which is already proving to be a fierce competitor to Uber in certain ridesharing markets.
But with ESG companies seeing a record year in 2020, the markets are already looking forward to what’s coming next in 2021.
Why 2021 Will Be Even Bigger
With the media labeling Biden the “green president” and ESG initiatives at the forefront, many are expecting this mega-trend to take off as he takes office beginning January 20th.
Krull says, “If the last four years of growth were with headwinds, I’m really excited about seeing a tailwind.”
Already, Biden’s cabinet choices have ESG proponents cheering. But the policies we may see coming down the pipe could grease the wheels for the ESG boom to race ahead like never before.
While those policies have still yet to be seen at this point, they’re already signaling plans to require public companies to disclose emissions data and other climate change-related information.
Plus, MorningStar is predicting Biden’s initiatives may help steer investors to low carbon and fossil fuel-free portfolios.
This is all great news for companies like Facedrive who are making green policies a pillar of their business.
But it’s not just big investment firms like Blackrock showing they see ESG as the move of the future.
A-list celebrities like Will Smith and Jada Pinkett Smith… sports superstars like Super Bowl-winning quarterback Russell Wilson… and Big Tech giants like Amazon are all getting onboard.
In just the last year, Facedrive (TSXV:FD,OTC:FDVRF) has struck important partnerships with all three of them…
Helping 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.
More Than Just Climate Change
Given the health crisis affecting millions worldwide over the last year, we’re sure to see more moves that will help folks get through the issue still on everyone’s mind today.
While Biden’s administration has been vocal about the mission to address climate change for the long-term…
They’ve also made it clear they’re planning on making addressing the health crisis a core promise, working to put an end to the pandemic.
That’s why we’re already hearing about the Coronavirus task force taking shape and getting plans set ahead of the inauguration…
And despite Supreme Court cases and plenty of debate surrounding the Affordable Care Act, addressing healthcare appears to be another major campaign promise.
All that to say, supporting the health of the citizens during these unprecedented times is going to be another issue that will continue to at the forefront during 2021.
That’s pushing many ESG-focused companies like Facedrive to take a more hands on approach during the pandemic as well.
Early last year, they branched out and got creative to do their part to track and ultimately help stop the spread of the virus.
They 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 for those without cell phones using Bluetooth technology.
That covers 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 major agreements with both the government of Ontario and Canada’s largest airline, Air Canada, to use this technology.
After 2020 set the stage for this massive ESG boom, the inauguration of a “green president” could launch this trend into the stratosphere.
That’s why analysts are predicting this will “usher in an unprecedented boom for ESG investments” like Facedrive in 2021.
Here are just a few other companies hopping on the ESG trend:
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.
In 2017, 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 2020, 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).
Facebook (NASDAQ:FB), as one of the world’s largest technology companies, has completely changed the game. It has taken a particularly innovative approach in creating a more sustainable future and has become an example for the entire industry. Its data centers are some of the most energy-efficient – and water-efficient – in the world.
It has taken the climate goals particularly seriously. Not only have they accomplished their goal to run on 100% renewable energy by the end of 2020, they’re working to build more water-efficient data centers. In fact, their data centers use 80 percent less water than typical data centers.
In 2019, Facebook became the number one corporate buyer of renewable energy in the United States, and second in the world. It has also made major investments in developing renewable projects in Texas, Ireland, Denmark and Norway.
Facebook has even gone a step further with its focus on building more sustainable workplaces. It’s building designs incorporate a number of renewable energy sources and water recycling methods, in addition to promoting the recycling and sustainability of all products consumed on site.
Alphabet Inc. (NASDAQ:GOOGL) is another tech giant going green. It is focused on raising the bar for smart use of the world’s resources. Like Facebook, Google is creating sustainable, energy-efficient data centers, and workplaces. It is also leveraging artificial intelligence to develop more sustainable energy use.
Alphabet’s focus is on raising the bar for smarter and more efficient use of the world’s limited resources has started a fire under its industry peers, forcing change throughout the tech sector and beyond.
Alphabet CEO Sundar Pichai explained, “We are committed to doing our part. Sustainability has been a core value for us since Larry and Sergey founded Google two decades ago. We were the first major company to become carbon neutral in 2007. We were the first major company to match our energy use with 100 percent renewable energy in 2017. We operate the cleanest global cloud in the industry, and we’re the world’s largest corporate purchaser of renewable energy.”
Alphabet has seen its share price increase by more than 25% this year alone, and that’s no easy feat for a company worth over a trillion dollars. And with Big Tech literally building the world around us, it’s likely to continue to grow for the foreseeable future.
Tesla (NASDAQ:TSLA) might just be one of the hottest stocks in the ESG space. As one of the world’s most innovative car manufacturers, it has single-handedly made going green cool. Its slick design has become all the rage. You would have to go out of your way to not see a Tesla when walking around major cities like San Francisco and Hong Kong.
Tesla has wasted no time in expanding to meet the coming demand growth. In fact, Musk’s company is on a trajectory for world domination, with the extremely ambitious goal of reaching 20 million vehicles around the world by 2030. “I’m not saying for sure we’ll hit 20 million vehicles,” Tesla CEO Elon Musk told analysts and investors in an October conference call. “But it does seem like a good goal to have because that would mean that we’re replacing 1% of the global fleet per year.”
Billionaire Elon Musk had his eye on prize long before the hype started building. In fact, he released the first Tesla Roadster back in 2008, making electric vehicles cool when people were shunning at first-gen electric vehicles. Since then, Tesla’s stock has skyrocketed by over 14,000%. And it’s not just about cars, either. Musk is looking towards a much bigger picture, building the foundation for an electrified future on all fronts.
Clearly, its efforts are paying off, as it is without-a-doubt one of the most popular stocks on Wall Street. Even better for Musk, and shareholders, Tesla was just bumped up to the S&P 500. But while Tesla’s EV threat to the industry is clear, the competition is heating up in China.
Microsoft (NASDAQ:MSFT) is going above and beyond in its emissions goals, aiming to be carbon neutral in the next ten years. A feat that will not be an easy task for such a massive technology corporation. Additionally, Microsoft has also pioneered new solutions to aid other companies in curbing their emissions as well.
The tech giant has made numerous investments in clean energy across the globe. From Ohio to the Netherlands, Microsoft is pouring millions into solar and wind projects to not only help reduce its own carbon footprint, but also help neighboring communities do the same.
In addition to its investments and green operations, Microsoft is also building the next generation of hardware and software to help the world reduce its dependence on fossil fuels. Its Azure IoT, for example, connects and manages internet-connected solar panels to improve efficiency and open a line for an entirely new way of sharing energy within communities.
Conor Kelly, the software engineer who is leading the distributed solar energy project for Microsoft Azure IoT explained, “We need to decarbonize the global economy to avoid catastrophic climate change,” adding, “The first thing we can do, and the easiest thing we can do, is focus on electricity.”
Canada’s Silicon Valley is joining the ESG race, too. Shopify Inc (TSX:SHOP) Canada’s own e-commerce giant helps users build their own online stores. It has huge clients – everyone from Tesla to Budweiser are on board. And the company is beloved by millennial investors. In addition to its revolutionary approach on e-commerce, Shopify is playing an increasingly active role in creating a greener tomorrow. It has committed to spending at least $5 million annually to help combat climate change. It’s even making cuts throughout its own operations, decommissioning its data centers and sourcing renewable power for its buildings.
Telecom giant Shaw Communications Inc (TSX:SJR.B) is another great example. Shaw is taking a leadership role among Canadian telecom providers through its use of renewable energy, In fact, it is one of the biggest customers of Bullfrog Power which sources its electricity from a blend of wind energy and hydropower. It is also building its own portfolio of clean energy investments.
In addition to its green energy investments, it’s also embarked on an initiative to power its data centers with renewables and even implemented software to create more efficient routes for its drivers which will reduce
BCE Inc (TSX:BCE) is another Canadian telecom giant going to great lengths to reduce its carbon footprint. In fact, the company was named one of Canada’s greenest employers in 2019. For the past 25 years, BCE has been at the forefront of the environmental movement. Their environmental management system (EMS) has been certified to be ISO 14001-compliant since 2009.
In addition to its sustainability push, BCE is also a great place to work. It’s one of the country’s top family friendly employers and has magnificent hiring practices, making it a great pick for ESG investors.
BCE is also at the forefront of the Internet of Things movement in Canada. Its Machine to Machine solutions are being used by numerous businesses, including TaaS providers throughout North America and its new LTE-M network is sure to rapidly increase the adoption of these solutions.
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.
Magna International (TSX:MG) is a great way to gain exposure to the EV – and by extension ESG – market without betting big on one of the new hot automaker stocks tearing up Robinhood right now. The 63 year old Canadian 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.
By. Dave Petersen
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
Forward-Looking Statements
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 Tracescan could help deal with COVID and will sign new agreements for use of its alert wearables; that new tech deals will be signed by Facedrive and deals signed already will increase company revenues; that Facedrive will be able to expand to the US and globally; that Facedrive’s merchandise business and sports prediction app will prove popular and successful; 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; TraceScan may not work as expected in commercial settings and customers may not acquire or use it; 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; the ability of Facedrive to attract providers of good and services for merchandise partnerships on terms acceptable to both parties, and on profitable terms for Facedrive; 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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