It’s hard to avoid hearing about the current fuel crisis in the UK and beyond. ‘Fuel stress’ is on the news almost daily, worsened by Russia’s invasion of Ukraine, and people have started receiving energy bills hundreds of pounds higher than previously. But how does this relate to the way people invest?
Decarbonising energy means moving away from oil and gas to renewable sources such as wind and solar. More renewable energy power plants are needed, but these are just one part of the energy puzzle. It’s also about looking at how the energy is stored and distributed, then finally how it is used in the most efficient manner.
At Blackfinch, we have dedicated teams investing across all three areas. Our investment specialists take a holistic approach to tackling the energy crisis, by approaching it from all sides. The outcome is that financial advisers can offer their clients a range of risks and returns while still making sure their funds are contributing to a positive future.
Investing in Renewable Energy Generation The Blackfinch Energy team invests in UK solar and wind renewable energy plants. We spread our investments across the whole of the country, and into a range of different technologies, to reduce risk. At a time when geopolitical factors have made energy prices particularly volatile, we think it’s important to ensure the UK gets closer to energy independence, by focusing on home-grown renewable energy. Not only is this approach helping to grow the UK’s overall renewable energy capacity, but it is also creating jobs in our economy, with skilled workers needed for the construction and ongoing operational management of the facilities.
“Our investments into solar and wind farms generate, on average, over £85,000 into local community projects. So not only are we building out more resilient clean energy for the UK, but we’re also making a difference on the ground in the local area.” Guy Lavarack, Investment Director, Blackfinch Energy
Investing to Ensure Clean Energy is Available, No Matter the Weather. The Blackfinch Asset Management and Ventures teams are also working hard to help build a resilient and stable clean energy sector, by investing in ways that help to capture and distribute energy when it is needed, and not just when it is generated.
For example, Blackfinch Ventures is actively looking to support innovative early-stage businesses that are applying the technology needed to unlock the potential for renewable energy as a genuine alternative to oil and gas. There are many great businesses across the UK, exciting start-ups, and early-stage firms with genuine ideas, who need the investment to grow and bring a viable product to the wider market.
While the Ventures team is focused on early-stage unlisted companies to invest in, Blackfinch Asset Management also invests in listed funds which are themselves invested in businesses across the globe, seeking out innovative ways in which energy storage and usage can be improved. Through responsible governance, they vote against businesses and strategies that don’t demonstrate enough progress on climate-related issues. In this way, they are actively supporting companies to improve their business practices and play their part in the global transition away from fossil fuels.
Investing to Reduce Energy Consumption and Wastage in Buildings Once the clean energy has been successfully generated, stored and then delivered to the end user, the focus moves to making sure that energy is used as efficiently as possible. At present, 40% of carbon emissions are from buildings. Therefore, changing the energy profile of homes and businesses requires a change to how they are built, as well as how they are run.
Developing new homes should now involve the use of responsibly sourced materials, modern methods of construction and a commitment to a low-energy profile energy performance certificate (EPC) rating through great insulation. Innovations such as ground source heat pumps - which transfers heat from outside the home to heat up the radiators inside – and recycling of rainwater and pumping it to where it is needed, are now mainstream.
But energy efficiency is not just about new homes – existing properties can be renovated to deliver energy savings. Retrospective additions to a property can make significant changes to the EPC rating, such as replacing oil and gas fired boilers, improving loft insulation and considering solar panel installations.
The Blackfinch Property team are experienced real estate investors who understand how innovative building practices should form part of any development project. They use a careful selection process to make sure they only lend to property developers committed to making a positive impact on the carbon footprint of their projects. Their extensive due diligence into both the developer and their property project includes obtaining assurance on energy efficiency and positively screening for responsible construction practices.
“Homes and buildings aren’t something we can do away with to tackle the energy crisis, so we must act responsibly in how we create and change what will stay with us. We actively seek out developers who have a forward-thinking approach to energy, because in the long-term that will be a key driver in determining the value of a property.” David Higson, Investment Director – Head of Property, Blackfinch Property
For example, the Blackfinch Property team recently approved a development loan which will be used to build 13 energy-efficient eco-apartments and 19 car parking spaces in the coastal location of Newhaven, East Sussex. The homes will be built to the Active House principles set by the Active House Alliance, the highest ecological standard in the property industry, and the development will include solar panels, electric charging points, rainwater harvesting, infrared panels and insulation.
Blackfinch Group: An ESG Investor, Committed to UK Energy Resilience Our approach to understanding all aspects of the energy market, matched with experienced teams who are committed to having environmental, social and governance (ESG) principles integrated into all our investment decisions, means investors can be confident that we take their money and make it work hard to build a more resilient UK renewable energy industry.
“Blackfinch Group has been on a journey alongside, and within, the energy market for several decades. We want retail investors to be proud that their money is being used responsibly, safely and proactively to make a difference that will be felt for generations to come.” Richard Cook, CEO, Blackfinch Group
Investors can invest in ways that create meaningful, long-term change, through our range of tax-efficient savings and managed portfolios. What we do with those funds is key, it’s what makes us different. We take our responsibilities very seriously and we move with the world around us – always adapting and evolving, because where we invest is where we thrive.