With billions of dollars being invested into ESG funds last year, 2020 has been called a “tipping point” year for this mega-trend in global markets.
And many are predicting that the ESG boom will continue this summer as investors all over the world may be looking to transform their portfolios by making huge bets on clean energy.
But perhaps the biggest driver for these new industries is President Joe Biden’s $2.5 trillion energy transition plan, which looks set to boost everything from electric vehicles, charging infrastructure, roads, bridges and carbon capture technologies.
Biden has called climate change “the number one issue facing humanity.”
This is why CNBC says, “Biden’s presidency could be a game changer for impact investing.”
And Forbes explains, “Why Socially Responsible Investing Is Likely To Gain Momentum Under Biden.”
But while there are still many things, we don’t know about how these policies will impact the American economy, 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 likely be at the top of the list of priorities over the next several years.
We think this is incredible news for investors who have already seen substantial 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 generational change coming a long time ago. And they used 2020 as a springboard to launch themselves to the next level.
Facedrive (TSXV:FD,OTC:FDVRF), which started out as an eco-friendly ridesharing company announced it had inked a number of major partnerships and deals over the last year…
Its partners are reported to include government agencies, A-list celebrities, and global tech titans.
And with lockdowns hurting many in the ridesharing industry, Facedrive reported that they grew their business by acquiring companies in the food delivery space…
Adding access to thousands of restaurant partners and tens of thousands of new potential customers.
We think that’s why Facedrive’s market value saw a massive gain in 2020.
Across the markets, we saw ESG companies outperforming other industries.
And now, with a president who has pledged to make climate change his number one priority, many are predicting this anticipated mega-trend could start to materialize in 2021.
Building the Foundation for the ESG Boom
Throughout 2020, we saw asset managers, private companies, and local governments band together to create a trend of “sustainable investing”.
And the momentum continues to build for this megatrend.
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 institutional investors appear to be piling in to the tune of trillions of dollars.
BlackRock, the world’s largest asset manager, 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 a massive $17.1 trillion invested in companies that put people and the planet first.
And Facedrive (TSXV:FD,OTC:FDVRF) is one of the companies that’s looking to transform the ridesharing industry, which could make a positive contribution to the air quality in North America’s largest cities.
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.
Next to that, a part of the fare is set aside to plant trees, offsetting some of the carbon footprint from the ride.
Every time you ride, Facedrive plants a tree.
Using next-gen technology and EVs, they’re making it easy for customers to make a more eco-friendly choice.
But perhaps the most interesting development is the acquisition of electric vehicle company, Steer, an innovative startup backed by America’s largest clean energy producer Exelon.
Steer’s subscription model for EVs aims to upend the traditional car ownership model. Some reports project the automotive subscription services market to grow by USD $9.15 billion between 2020 and 2024, and according to Facedrive, Steer is already starting to see the benefits, reporting that it’s generating millions in annual recurring revenue in its first 12 months of operation.
With charging infrastructure being built out at a fast clip in some of America’s largest cities, it looks like more and more people are expected to switch to electric vehicles during the next couple of years, and Steer could stand to benefit significantly as it offers a highly flexible monthly package. In fact, its most premium package allows its subscribers to choose from a wide range of EVs including Audi’s, Tesla’s, Porsche’s and BMWs.
Why 2021 Could Be Even Bigger
With the media labeling Biden the “green president” and ESG initiatives at the forefront, many are expecting this mega-trend could start to materialize during his presidency.
Krull says, “If the last four years of growth were with headwinds, I’m really excited about seeing a tailwind.”
Already, Biden’s spending plans have had the markets cheering. But the policies we may see during the coming months may supercharge the ESG boom to race ahead like never before.
While the effects of these stimulus policies could be slowly trickling down to the real economy, they already look to be triggering a wave of new investment from retail investors.
MorningStar is predicting Biden’s initiatives may help steer investors to low carbon and fossil fuel-free portfolios.
We think this is all great news for companies like Facedrive who have successfully presented themselves as champions in turning conventional businesses into sustainable operations.
And it’s not just big investment firms like Blackrock showing they see the potential of ESG as a 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 2020, Facedrive (TSXV:FD,OTC:FDVRF) announced they had struck important partnerships with all three of them…
It’s important partnerships in the U.S. and Canada that could help Facedrive to expand their business at a rapid pace.
And with big names getting onboard, it’s proving that the ESG boom has gone far beyond just a few people buying electric vehicles.
Instead, it looks like ESG is becoming a lifestyle shift that could 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 people to get through the pandemic still on everyone’s mind today.
And while Biden’s administration has been vocal about the mission to address climate change for the long-term…
They’ve made addressing the health crisis a core promise, working to put an end to the pandemic.
With the vaccination campaign advancing at a very fast pace, supporting the health of citizens during these unprecedented times is going to be another issue that will continue to be at the forefront during 2021.
And it’s not just the federal government, many socially aware companies have taken a more hands on approach during the pandemic as well.
Early last year, Facedrive announced they had branched out and gotten creative to do their part to track and hopefully help stop the spread of the virus.
The company reported it 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, which health experts believe is one of the pillars for safely reopening the global economy.
This technology 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.
Since the beginning of the pandemic, Facedrive has signed agreements with both the government of Ontario and Canada’s largest airline, Air Canada, aiming to implement this technology.
After 2020 looks to have set the stage for a massive ESG boom, the installation of a “green president” legitimized the trend and much will be done by the federal government to transform it from a mere trend in the markets into a new way of life.
That’s why analysts are predicting this will “usher in an unprecedented boom for ESG investments” and we think this will extend to opportunities like Facedrive in 2021.
The ESG Boom Is Here To Stay
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 company that specializes in solar energy systems. Enphase Energy was founded in 2002 to provide power generation solutions for residential, commercial and utility-scale customers. With the introduction of their microinverter technology, Enphase has grown into one of the largest photovoltaic system suppliers in North America. The company’s products are designed with simplicity and ease of installation as top priorities
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.
NextEra Energy (NYSE:NEE) is a large company that provides power to millions of people. The company has been in business for over 100 years and they have grown steadily each year, making them one of the largest power companies in North America. They are recognized as an industry leader with their reliability, efficiency, and environmental sustainability being at the forefront.
NextEra 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.
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 TotalEnergies (NYSE:TTE). 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) is a global investment management firm that provides services to institutions and individuals. They offer various products including equity, fixed income, and alternative investments. In addition to these offerings they also provide advisory services for corporations and governments. The company was founded in 1988 by CEO Larry Fink with $4 billion of capital from clients such as the Ford Foundation, General Electric Company (GE), State Street Corporation (STT) among others.
BlackRock 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.
Uber Technologies (NYSE:UBER) is a transportation network company that provides an app for consumers to use in order to request and pay for rides. Uber has been so popular because it’s easy, convenient, and affordable. The app uses GPS technology to connect drivers with those requesting a ride, making the entire process simple and straightforward.
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.
Canada’s Silicon Valley is joining the ESG race, too. Shopify Inc (NASDAQ:SHOP; TSX:SH) is an ecommerce company geared towards small and medium-sized businesses. The company was founded in 2004 by Tobias Lütke, Daniel Weinand, and Scott Lake after the three recognized a need for simpler ways to create online stores. Shopify offers various programs that allow entrepreneurs to start their own business with ease.
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.
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 one of the world’s largest automotive suppliers. This Canadian company was founded in 1974 and now has over 150,000 employees. They manufacture a wide range of products such as seats, modules, air-conditioning systems and much more for many different automotive companies around the world.
In addition to their manufacturing facilities in Canada and Mexico, they have plants in Italy, Slovakia and China too. The Magna Automotive Systems subsidiary produces powertrain components including transmissions for BMW AG (BMW) Mini vehicles through its joint venture with BMW Group (BMW), Getrag GmbH (GETRAG).
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.
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 last year, 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.
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.
GreenPower Motor (TSX:GPV) is a promising young Canadian electric vehicle 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.
Since this time last year, GreenPower Motor has seen its share price soar from $5.67 to $21.90. That means investors have seen 94% gains this year alone. And with this red-hot sector only going up, GreenPower will likely continue to impress.
Telecom giant Shaw Communications Inc (TSE:SJR.B) is a great example.. Shaw is taking a leadership role among Canadian telecom providers through its use of renewable energy, In addition to its telecom dominance, it has also branched out into sustainable ventures, holding stake in renewable projects across the country. 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.
BCE Inc. (TSX:BCE) is another household name in Canadian telecom. 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. Throughout its push into the position of one of Canada’s top telco groups, it has bought and sold a number of different firms. BCE is currently at the forefront of the Internet of Things movement in Canada. That means it will play a vital role in building new sustainability projects and making Canada’s cities smarter and more efficient. Likewise, it will play a key role in the adoption of transportation technologies and self-driving vehicles.
By. Dave Petersen
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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 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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