Climate Investing: What it is, What's Propelling it, and Where to Start
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Climate Investing: What it is, What’s Propelling it, and Where to Start

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The following content is sponsored by iShares by BlackRock.


Climate Investing

Climate Investing: What it is and Where to Start

Across all sustainability issues, 88% of global investors rated the environment as the number one priority. Clearly, investors are recognising the urgency of climate change and the need for related investing strategies.

In this graphic from iShares by BlackRock, we define climate investing, the forces giving it momentum, and how investors can begin to implement it in their own portfolios.

What is Climate Investing?

Climate investing involves selecting sustainable strategies where climate risks and/or opportunities are key considerations. This helps investors align their portfolios with the transition to a low carbon economy.

What’s Propelling it?

There are a number of long-term structural forces accelerating the shift to climate investing.

  • Extreme weather damage: In 2020 alone, damages from natural disasters hit $210 billion—the highest amount ever recorded.
  • Global climate regulations: Around the world, 134 countries have made a carbon neutral pledge.
  • Clean energy innovations: Renewable energy is getting cheaper, with production costs of solar photovoltaic technology falling 89% between 2009 and 2019.
  • Favourable investor sentiment: Almost two-thirds of people in 50 countries believe climate change is a global emergency.

In response to this momentum, the number of companies disclosing on climate change has almost doubled in the last five years. This transparency can enable investors to make more informed decisions.

How Can Investors Navigate This Fast-moving Transition With ETFs?

New products with climate considerations are helping investors with the transition, and one widely available vehicle is Exchange Traded Funds (ETFs). In fact, annual inflows into global sustainable ETFs have grown substantially.

YearAnnual Inflows
2016$1.4B
2017$4.1B
2018$6.8B
2019$29.3B
2020$87.8B

In 2020, inflows into sustainable ETFs were 63 times higher than they were in 2016. ETFs are a useful tool because they offer the transparency investors need to pursue specific financial and climate goals.

The Three Climate Investing Approaches

Within sustainable ETFs, there are a range of funds that incorporate climate considerations. To bring clarity to this space, BlackRock has categorised climate investing into three key approaches:

  • Reduce exposure to carbon emissions or fossil fuels. For example, this could involve minimising or eliminating companies that have high carbon emissions relative to their sector peers.
  • Prioritise companies based on climate risks and opportunities. In practice, this could mean increasing the weighting of companies based on their commitments to align with Paris Agreement temperature goals.
  • Target climate themes and impact outcomes. For example, an investor could invest in a specific sustainable activity or project, such as clean energy.

“We believe that the biggest potential benefits will accrue to the global investors who are quickest to ready their portfolio for the new era of climate investing.”
—Manuela Sperandeo, EMEA Head of Sustainable Indexing at BlackRock

No matter an investor’s approach, iShares believes that they can help catalyse the shift to sustainable investing.

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Visualizing the Rise of mCommerce

mCommerce is taking up an increasingly larger portion of the global eCommerce market, as cellphones become virtually ubiquitous worldwide.

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mCommerce Worldwide

Visualizing the Rise of mCommerce

Cellphones are becoming increasingly more prevalent across the globe. In fact, as of 2021, there are more mobile connections than people on the planet.

Because of this, the mobile commerce (mCommerce) market is expanding fast. By 2025, mCommerce is expected to double its share of U.S. retail sales.

This graphic from Logiq provides a snapshot of the mCommerce landscape, and how companies can capitalize on this rapidly changing retail environment.

The Three Types of mCommerce

First things first—what exactly is mCommerce? It’s essentially any financial transaction done on a mobile device. There are three main types:

  • Mobile Shopping: eCommerce that’s optimized for mobile. This includes dedicated shopping apps, websites designed for mobile use, and even social media platforms that have built-in shopping features.
  • Mobile Banking: Like online banking, but usually in the form of a dedicated mobile banking app that allows for on-the-go access to your accounts.
  • Mobile Payments: This includes mobile wallets, contactless payments, money transfers and mobile point-of-sale.

In other words, mCommerce is a branch of eCommerce that allows people to buy and sell goods from almost anywhere with a mobile connection.

Mapping Out the Market

mCommerce has captured a significant portion of global eCommerce sales. As of May 2021, it makes up 65% of total retail eCommerce sales worldwide.

But some regions are adopting it faster than others. In Asia-Pacific, 79.7% of the region’s total eCommerce sales are done via mobile.

Region% of total retail eCommerce sales
Asia-Pacific79.7%
Middle East & Africa65.0%
Southeast Asia63.5%
Latin America48.8%
Western Europe45.5%
Central & Eastern Europe38.9%
North America38.2%

Why is mCommerce so widespread in Asia-Pacific? One reason could be the region’s relatively young (and tech-savvy) population—people aged 15 to 24 make up 19% of its overall population.

This, along with Asia-Pacific’s high levels of wealth and its general digital competitiveness—especially in China—could help explain why mCommerce has taken off so quickly in the region.

While each region’s mCommerce market looks slightly different, growth is expected across the globe. In the next five years, the global mCommerce market is expected to grow to $2.7 trillion, at a CAGR of roughly 34%.

The Pros and Cons

There are a number of positive impacts, along with some challenges, that arise as a result of mCommerce’s increasing prevalence.

A big positive impact is its convenience. Mobile shopping gives consumers access to on-demand shopping that they can tap into anywhere, so long as there’s a mobile connection.

It also helps create a frictionless shopping experience. For example, thanks to mobile wallets, customers don’t even have to type out their credit card details to purchase something—it’s just a click away.

That being said, its rapid growth also means that businesses need to consider ways to optimize for mobile. Like eCommerce, innovation in the mCommerce landscape is fast and ever-evolving, which means that companies need to remain agile so they don’t get left behind.

How Businesses Can Adapt

Despite these challenges, mCommerce is expected to keep growing, and businesses will need to cater to this market if they want to remain competitive.

Logiq can help companies navigate through this ever-changing landscape. It allows businesses to plan and execute multi-channel strategies, and provides data analytics to help track progress.

To learn more about Logiq’s offerings, click here.

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What are NFTs? Mapping the NFT Ecosystem

NFTs have grown to be a hot topic and frothy market, but what are they really? This graphic defines NFTs and explores the NFT ecosystem.

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what are NFTs?

Mapping the NFT Ecosystem

NFTs have been the hottest topic and frothiest market of 2021, with sales volumes increasing by 100x while also becoming a topic of discussion on evening talk shows.

It took crypto nearly a decade to really penetrate the mainstream, but NFTs only needed a couple of years to capture people’s attention. As brands like Budweiser, Visa, and Adidas have purchased NFTs and entered the space, it’s clear that NFTs are more than just another hot new trend.

This infographic sponsored by Next Decentrum defines NFTs and explores the flourishing ecosystem that has quickly grown around them. Discover what non-fungible means, where NFTs are being minted and traded, and what the future holds for this asset class.

What are NFTs, and What is Fungibility?

NFTs are non-fungible tokens that have their history of ownership and current ownership cryptographically secured on a blockchain. These tokens can represent anything, whether it’s a piece of digital art in the form of a jpeg or a song as an mp3 file.

By storing transactions of these tokens on a blockchain, we can have digital proof of ownership and markets for these digital goods without the fear of double spending or the tampering of past transactions and ownership.

Figuring out Fungibility

This all sounds pretty similar to cryptocurrencies, so what makes NFTs so special? Their non-fungibility. Unlike cryptocurrencies like bitcoin or ethereum, non-fungible tokens represent goods or assets with unique properties and attributes, allowing them to have unique values even if they are part of the same collection.

Fungible: A good with interchangeable units that are indistinguishable in value. Examples: U.S. dollars, bitcoin, arcade tokens

Non-Fungible: A good with unique properties, giving it a unique value when compared to similar goods. Examples: real estate, paintings, NFTs

The most popular NFT collection, Cryptopunks, is a collection of 10,000 pixel art “punks”, with varying attributes like different hats, glasses, hairstyles, and more. The random combinations of attributes with differing scarcity results in each punk having a unique value.

Scarcity and subjective aesthetic preferences drive valuations for cryptopunks and other NFTs, with other factors like their historical significance, and even the blockchain they’re hosted on affecting their value.

The NFT-Capable Blockchains Compared

There are many different blockchains that are able to mint and host NFTs, with Ethereum currently the largest and most used by market cap and transaction volume.

Ethereum uses the energy-intensive proof of work consensus method but the network is planning to transition to proof of stake next year which should reduce energy usage by about 99%.

BlockchainMarket CapConsensus Method
Ethereum$526BProof of work
Solana$63.93BProof of stake
Avalanche$26.22BProof of stake
Polygon$12.41BProof of stake
Tezos$4.57BProof of stake
Flow$4.07BProof of stake

Source: Messari.io
As of Nov 29th, 2021

Along with concerns around its energy intensity, minting and transacting on the Ethereum blockchain incurs significantly higher fees compared to other blockchains.

The average Ethereum transaction fee varies between $30-80 (depending on the specific transaction) and the current NFT minting fee is ~$130, every other blockchain in the table above has transaction and minting fees that remain below $1.

While these high Ethereum fees have driven many users to explore other blockchains to mint NFTs, many secondary marketplaces help cover a portion, or even all gas fees, when minting on Ethereum.

The Secondary NFT Marketplaces

Alongside the primary blockchain networks where NFTs are minted and hosted, there are a variety of secondary marketplaces for NFTs where the majority of NFT exchanges take place.

These marketplaces enable users to more easily mint, buy, and sell NFTs, with OpenSea having emerged as the leading secondary NFT marketplace. It’s estimated that OpenSea had $1.9 billion of traded volume in November 2021, making up over 95% of NFT trading volumes.

MarketplaceTrading Volume (November)Supported Blockchains
OpenSea$1.9BEthereum, Polygon
Nifty Gateway$31.79BEthereum
SuperRare$18.77MEthereum
Foundation$15.33MEthereum
Hic et Nunc$4.48MTezos
MakersPlace$1.09MEthereum
Async Art$131,000Ethereum

Source: The Block

Although some of the marketplaces (like OpenSea) allow anyone to easily mint and offer an NFT for sale, other platforms like SuperRare limit the art and artists on offer, resulting in a more curated marketplace. Similarly, some marketplaces like OpenSea host NFTs from multiple blockchains like Ethereum and Polygon, while other marketplaces like Hic et Nunc are faithful to one blockchain (Tezos).

While OpenSea currently dominates the secondary market, cryptocurrency exchanges are likely to offer some fresh competition soon. Coinbase is currently building out its own NFT marketplace, and FTX’s marketplace with Ethereum and Solana NFTs is up and running.

Digital Art, Gaming, The Metaverse, and The Future of NFTs

NFTs made a huge splash in 2021, giving creators digital and decentralized networks where they could host and exchange their work.

Currently, digital-first use-cases are at the forefront of NFT development, with ownership of in-game assets or goods in the metaverse two of the primary use-cases being explored. However, NFTs can be used to tokenize physical assets like real estate, physical artwork, and much more, opening up near endless possibilities for their application.

From removing the friction of paperwork and bureaucracy in today’s real estate exchanges to allowing for easy fractionalization of asset ownership, the tangible real-world use-cases of NFTs are just starting to be explored.

To learn more about NFTs, visit Next Decentrum.

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