Podcasts | April 14, 2023

Ariane Mahler, Veridien Global Investors: Going beyond ‘net-zero’ in public markets

David Bank
ImpactAlpha Editor

David Bank

ImpactAlpha, Apr. 14 – “Net zero is not going to get us anywhere,” Ariane Mahler of Veridien Global Investors tells ImpactAlpha’s David Bank. “You need negative emissions, not just net zero.”

Many “sustainable” ETFs loaded up on tech stocks to reduce their carbon footprints but don’t directly target climate solutions. Mahler is part of a new crop of public-equities investment managers looking for companies that derive the bulk of their revenues from reducing greenhouse gases.

She says Climate Action, Veridien’s forthcoming exchange-traded fund (ticker: CLIA) will include names in construction, waste management, agriculture and forestry as well as transportation and energy that “have as their main focus the reduction of greenhouse gas emissions.”

Why play in the public markets? Because that’s where the capital is. “The companies we invest in build gigawatts of solar farms – hundreds, thousands of them,” she says. “So they have a lot more impact. If you want to measure them, it’s going to be in terms of gigatons, not in terms of tons of CO2 avoided.”

Low-impact sustainable ETFs have taken a hit as tech stocks have suffered (and oil has soared), but climate solutions can outperform, Mahler says. “There are very strong, secular tailwinds behind these companies’ business models,” she says.

Renewable energy is abundant and cheaper than other forms of energy. “We’ve reached that point where, frankly, even the climate-skeptic investors are embracing these technologies.”