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MIND THE GAP!

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Ethical consumers, but not ethical investors

shake handsOn the eve of National Ethical Investment Week, new research from Ecclesiastical Investment Management reveals that two thirds of consumers who invest (60%) would consider themselves ethical consumers, but only a third (35%) would consider themselves ethical investors.

The disparity shows how consumers are failing to use the same criteria when shopping and investing. For example, a fifth (20%) of consumers think that recent events in the news, such as Starbucks, Amazon and Google avoiding paying tax or claims that Nike employs children would make them far less likely to shop there or buy their products.

Despite the majority of investors not seeing themselves as ethical, all investors stated that they were concerned about what their money was invested in. Women chose renewable energy (36%) as the sector they are most happy to invest in, while men stuck with traditional non-ethical stocks, such as precious metals (49%) and natural minerals (40%).

The research also further looked into the psyche of an investor, with one in five (21%) stating that their parents made them first think about investing. A further 16% thought it was the right time to consider their future, 15% because they were worried about their retirement and 11% because they had children.

Sue Round, Head of Investments at Ecclesiastical Investment Management, commented: “The research shows that consumers are happy to buy ethically, but that when it comes to investing they fail to see the connection. With many of us far more environmentally aware, engaged in issues of corporate governance and becoming far more knowledgeable about the companies with which we shop, it will only be a matter of time before consumers realise that they can get good returns alongside investing with their principles.

“Ecclesiastical Investment Management has been at the forefront of socially responsible investing since 1988. We seek to only invest in companies that make a positive contribution to society which means that investors can devote their money safe in the knowledge that they agree with the causes. All our Amity funds make a positive contribution to society and the environment through sustainable and socially responsible practices and we look forward to helping the ethical consumer take their first step towards being an ethical investor.”

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Commenting on the research Gavin Oldham, chief executive at The Share Centre, said: “It is true that although many personal investors pay lip service to ethical investing, few actually state sectors they don’t want to invest in when completing the ‘Know Your Customer’ details at The Share Centre. We need to raise the profile of ethical investing to make it easier to identify companies with harmful products and procedures so investors can make informed decisions that are in line with their ethical principles.”

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Bitcoin slumps 10% as pullback from record continues

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Bitcoin slumps 10% as pullback from record continues 1

LONDON (Reuters) – Bitcoin slumped 10% on Thursday to a 10-day low of $31,977 as the world’s most popular cryptocurrency continued to retreat from the $42,000 record high hit on Jan. 8.

The pullback came amid growing concerns that bitcoin is one of a number of financial bubbles threatening the overall stability of global markets.

Fears that U.S. President Joe Biden’s administration could attempt to regulate cryptocurrencies have also weighed, traders said.

(Reporting by Julien Ponthus; editing by Tom Wilson)

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A lot of hot air? Investors snap up hydrogen stocks in green frenzy

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A lot of hot air? Investors snap up hydrogen stocks in green frenzy 2

By Elizabeth Howcroft and Thyagaraju Adinarayan

LONDON (Reuters) – An unprecedented rally in “green” hydrogen stocks looks set to extend as investors flock to companies which promise to produce the gas without using fossil fuels, expecting the technology to scale up over the next 10 years to justify rocketing valuations.

Hydrogen is the universe’s most abundant element. It is mostly extracted from fossil fuels, emitting carbon dioxide in the process. “Green” or clean hydrogen requires using electrolysis to split water into its components of hydrogen and oxygen and doing so cheaply is often described as the holy grail of green energy transition.

Share prices of companies in the industry have soared more than 500% in the past year, driven by the rising adoption of zero-emission vehicles, a deadline set by many countries to go carbon-free by 2050 and lately U.S. President-elect Joe Biden’s support for clean energy.

Plug Power, Ceres Power and Fuelcell Energy, which make hydrogen fuel cell systems that power devices ranging from warehouse machines to cars, are leading that charge, jumping 400% to 1,600% in the last year.

“Hot money is flowing towards renewables and clean energy, and there’s been a clear re-rating of valuations in the sector,” said Emmanuel Cau, head of European equity strategy at Barclays.

While a lot of focus has been on hydrogen’s role in the automotive sector, its usage is growing far beyond that.

The European Union plans to scale up renewable hydrogen projects across polluting sectors ranging from chemicals to steel with cumulative investments in renewable hydrogen in the region seen reaching up to 470 billion euros ($570 billion) by 2050, the region’s commission said.

That has fuelled the stocks of electrolyser makers Norway’s Nel and UK’s ITM Power.

“The momentum just keeps going really with this theme,” Ashim Paun, HSBC’s global co-head of climate change and ESG research said on a webinar.

ZeroAvia, a hydrogen plane startup, last month secured $37.7 million in new cash via a funding round led by Bill Gates’ Breakthrough Energy Ventures and from the British government to support its bid to develop zero-emission aircraft.

The frenzy in hydrogen-related stocks has led to some concerns about a bubble, with companies trading at extreme prices based on expectations that their revenue will surge in future, despite worries about possible headwinds for the sector.

Widespread adoption of hydrogen as a fuel for cars is far from a given.

Toyota launched a new hydrogen fuel cell car in December, but it has largely failed to win customers over to the technology amid concerns about a lack of fuelling stations, resale values and the risk of hydrogen explosions.

The momentum behind electric vehicles may be another headwind, said Jonathan Bell, chief investment officer at Stanhope Capital.

“The problem with hydrogen is that sometimes when you have two competing systems, it’s not the better technology that wins, it’s the one that gets market share and the network effect first of all,” Bell said.

UK-based ITM Power, which manufactures the electrolysers needed to make green hydrogen, is trading at a massive seven times its 2030 sales, while rival Nel is relatively cheap at three times 2030 sales, according to HSBC’s calculations.

Some investors may avoid the sector altogether, after a similar burst of enthusiasm two decades ago proved short-lived, and much of the latest excitement around green energy is based on Biden’s policy plans, which are yet to be passed into law.

But no bank is ringing the alarm bells, yet.

JP Morgan analysts advised long-term investors in a recent note to take advantage of any pullback in prices and “take an unorthodox approach to valuation for the next several years” – in other words, not worry about a potential bubble.

Sean McLoughlin, HSBC EMEA head of industrials research, said scarcity value in the market, unprecedented fiscal stimulus, low cost of capital and debt and low yields in other asset classes mean the hydrogen market’s valuation may be justified though he cautioned it was at a “potentially fraught level.”

“There’s a lot of capital that is very ESG-focused chasing a select number of companies that offer this kind of pure play exposure to these future energy trends. So there is a risk that this may unwind.”

($1 = 0.8258 euros)

(This story corrects paragraph 2 to show hydrogen is the universe’s most abundant element, not earth’s)

(Reporting by Thyagaraju Adinarayan and Elizabeth Howcroft, additional reporting by Julien Ponthus; editing by Rachel Armstrong and Emelia Sithole-Matarise)

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BlackRock to add bitcoin as eligible investment to two funds

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BlackRock to add bitcoin as eligible investment to two funds 3

(Reuters) – BlackRock Inc is adding bitcoin futures as an eligible investment to two funds, a company filing showed, in a move to bring the world of cryptocurrency to its clients.

The world’s largest asset manager said it could use bitcoin derivatives for its funds BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc.

The funds will invest only in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission, the company said in a filing to the Securities and Exchange Commission on Wednesday.

Chief Executive Officer Larry Fink had said at the Council of Foreign Relations in December that bitcoin is seeing big giant moves every day and could possibly evolve into a global market. (https://bit.ly/2XXFHrB)

Earlier this month, Bitcoin, the world’s most popular cryptocurrency, hit a record high of $40,000, rallying more than 900% from a low in March and having only just breached $20,000 in mid-December.

A BlackRock spokesperson declined to comment beyond the filings when contacted by Reuters.

(Reporting by Radhika Anilkumar and Bhargav Acharya in Bengaluru; Editing by Arun Koyyur)

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