The Global Returns Project, the sole initiative of the not-for-profit, Climate Crisis Foundation, was created on the belief that money involved in sustainable finance is only the first step in wealth management’s journey to tackling climate change.
Chellman explains the principle, which was conceived with help from a behavioural economist in September this year, as “symbiotic wealth management”.
In a nutshell, this involve allocating a small amount to not-for-profits tackling the climate and nature crisis alongside your normal investing.
While allocating to not-for-profits is generally considered a donation, the Global Returns Project is looking to reframe this, terming it “regenerative investments”.
“We want to change the concept of what we think of as returns,” Chellman explained. “By investing in not-for-profits you are protecting your other investments because we all know climate change protects your portfolios.”
Why invest in charities? According to the Global Returns Project there is a critical role filled by not-for-profit organisations in the climate change agenda.
Their recent reports shows that allocating £600 annually to climate not-for-profits is at least 100 times more effective at reducing atmospheric carbon dioxide levels than any other individual action considered in the study. These actions include living car-free for a year, switching to green energy and switching to a plant-based diet.
Investment style strategy
In an aim to attract the wealth management industry, the Global Returns Project, whose board consists of investment professionals and charity workers among others, has used the structure and methodology of a traditional fund.
In September it launched the Global Returns fund, which currently has six charity partners addressing issues such as whale protection, rainforest protection or tree conservation.
The strategy, which has no fees, operates like a traditional fund. It has an investment methodology, objectives, its investments are rebalanced regularly and there is an impact report produced every six months so investors know the impact their money is having.
The project also produce a factsheet giving information on the diversity of the portfolio, broken down by what climate issues it is tackling.
All these elements “remove friction” from the process and make things “as easy as possible” for investors, according to Chellman.
At the moment the project is working with financial advisers who are trialling the concept with clients. However, any one can allocate to the fund via their website.