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Green Investing: How to Align Your Portfolio With the Paris Agreement

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The following content is sponsored by MSCI.


Green Investing

Green Investing: The Paris Agreement and Your Portfolio

In Part 1 of the Paris Agreement series, we showed that the world is on track for 3.5 degrees Celsius global warming by 2100—far from the 1.5 degree goal. We also explained what could happen if the signing nations fall short, including annual economic losses of up to $400 billion in the United States.

How can you act on this information to implement a green investing strategy? This graphic from MSCI is part 2 of the series, and it explains how investors can align their investment portfolios with the Paris Agreement.

Alignment Through Indexing

When investors are building a portfolio, they typically choose to align their portfolio with benchmark indexes. For example, investors looking to build a global equity portfolio could align with the MSCI All Country World Index.

The same principle applies for climate-minded investors, who can benchmark against MSCI’s Climate Paris Aligned Indexes. These indexes are designed to reduce risk exposure and capture green investing opportunities using 4 main objectives.

1.5 Degree Alignment

The key element is determining if a company is aligned with 1.5 degree warming compared to pre-industrial levels. To accomplish this, data is collected on company climate targets, emissions data, and estimates of current and future green revenues. Then, the indexes include companies with a 10% year-on-year decarbonization rate to drive temperature alignment.

Green Opportunity

Environmentally-friendly companies may have promising potential. For instance, the global clean technology market is expected to grow from $285 billion in 2020 to $453 billion in 2027. The MSCI Climate Paris Aligned Indexes shift the weight of their constituents from “brown” companies that cause environmental damage to “green” companies providing sustainable solutions.

Transition Risk

Some companies are poorly positioned for the transition to a green economy, such as oil & gas businesses in the energy sector. In fact, a third of the current value of big oil & gas companies could evaporate if 1.5 degree alignment is aggressively pursued. To help manage this risk, the indexes aim to underweight high carbon emitters and lower their fossil fuel exposure.

Physical Risk

Climate change is causing more frequent and severe weather events such as flooding, droughts and storms. For example, direct damage from climate disasters has cost $1.3 trillion over the last decade. MSCI’s Climate Paris Aligned Indexes aim to reduce physical risks by at least 50% compared to traditional indexes by reducing exposure in high-risk regions.

Together, these four considerations support a net zero strategy, where all emissions produced are in balance with those taken out of the atmosphere.

Green Investing in Practice

Climate change is one of the top themes that investors would like to include in their portfolios. As investors work to build portfolios and measure performance, these sustainable indexes can serve as a critical reference point.

Available for both equity and fixed income portfolios, the MSCI Climate Paris Aligned Indexes are a transparent way to implement a green investing strategy.

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Antimony: A Mineral with a Critical Role in the Green Future

Despite its lack of fanfare, antimony is a critical mineral that plays an important role in the mass storage of renewable energy.

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Critical Mineral Antimony

Antimony: A Mineral with a Critical Role in the Green Future

If someone asked you to name the first mineral that came to mind, odds are, it wouldn’t be antimony.

Yet, despite its lack of fanfare, it plays a significant role in our day-to-day lives. This graphic from Perpetua Resources provides an overview of antimony’s key uses, and the critical role it plays in the movement towards clean energy, among other uses.

What even is Antimony?

Antimony is an element found in the earth’s crust. Rarely found in its native metallic form, it is primarily extracted from the sulfide mineral stibnite.

It has a variety of uses and is found in everything from household items to military-grade equipment. Because it conducts heat poorly, it’s used as a flame retardant in industrial uniforms, equipment, and even children’s clothing.

End Use% of antimony consumption in the U.S.
Flame retardant35%
Transportation and batteries29%
Chemicals16%
Ceramics and glass12%
Other8%

Its second most common use, according to USGS, is in transportation and batteries. Traditionally, antimony has been combined with lead to create a strong, corrosion-resistant metal alloy, which is particularly useful in lead-acid batteries.

However, recent innovation has found a new use for antimony—it now plays an essential role in large-scale renewable energy storage, which is critical to the clean energy movement.

Antimony’s Role in Clean Energy

Large-scale renewable energy storage has been a massive hurdle for the clean energy transition because it’s hard to consistently generate renewable power. For instance, wind and solar farms might have a surplus of energy on windy or sunny days, but can fall short when the weather isn’t sunny, or when the wind stops.

Because of this, mass storage of renewable energy is key, in order to transition from fossil fuels to clean energy. Recent research points to liquid metal batteries as a potential storage solution—and these batteries heavily rely on antimony.

But there’s a finite supply, and with China currently dominating antimony production and processing, the U.S. could be at the mercy of its economic rival.

CountryProduction in 2020 (tons)Reserves (tons)
China80,000480,000
Russia30,000350,000
Tajikistan28,00050,000
Bolivia3,000310,000
Turkey2,000100,000
Australia2,000140,000
United States---60,000

In 2020, there was no domestically mined production of antimony in America—meaning the U.S. relied on other countries, primarily China, for its antimony supply.

In the past, China has imposed restrictions on the exports of antimony-based products to the U.S., which reduced availability and increased prices. Because of this, antimony was identified as one of the 35 minerals that are critical to U.S. national security.

Tapping into Domestic Supply

To decrease foreign dependence, the U.S. could tap into domestic resources of antimony and build up its local supply chain.

The only major antimony deposit in North America is located in the Stibnite-Yellow Pine Mining District of central Idaho. This site is the largest reserve in the nation and is expected to supply roughly 35% of U.S. antimony demand on average for the first six years of production.

Domestic production would not only allow the U.S. to reduce its import reliance, but it would also create jobs, providing economic support for the local community.

In the near future, antimony demand could soar as a result of its critical role in clean energy storage—and domestic production via the Stibnite-Yellow Pine Mining district could play a key role in meeting this rising demand.

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The History of Psychedelics (Part 2 of 2)

This graphic showcases the recent history of psychedelics and explores the exciting possibilities of this promising market.

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The History of Psychedelics (Part 2 of 2)

In part one of this two-part series, we unearthed the story behind the prohibition of psychedelic substances, and how strict regulations resulted in a hugely stigmatized industry.

Over the last decade however, new breakthroughs proving the untapped therapeutic potential of medicinal psychedelics are coming to the fore, leading many to believe that restricting them may have in fact been premature.

The graphic above from Tryp Therapeutics is the last in a two part series that explores how psychedelics have evolved over the last 6,000 years.

The Psychedelic Renaissance

After decades of being labeled as illegal narcotics, the industry reinvented itself as a viable solution for treating hard-to-treat illnesses in a safe and controlled way.

“Psychedelics, used responsibly and with proper caution, would be for psychiatry what the microscope is for biology and medicine or the telescope is for astronomy.”

—Stanislav Grof

This unprecedented comeback has sparked a global medicinal psychedelics movement, with the U.S. leading the way in decriminalizing these powerful drugs.

YearMilestoneRegion
2017
(Aug)
The FDA grants MDMA-assisted psychotherapy Breakthrough Therapy StatusU.S.
2018
(Aug)
COMPASS Pathways receives Breakthrough Therapy Status from the FDA for a psilocybin synthetic derivativeU.S.
2019
(March)
Esketamine is approved in the form of Spravato by the FDA, followed by European Commission approvalGlobal
2019
(June)
Denver, Colorado and Oakland, California vote to decriminalize psilocybin mushroomsU.S.
2019
(Nov)
The world’s first microdosing study using LSD is approved in AucklandNew Zealand
2019
(Nov)
Usona Institute receives Breakthrough Therapy Status for psilocybin treatment for Major Depression Disorder (MDD) 
U.S.
2020
(Feb)
Santa Cruz, California votes to decriminalize psychedelic substances including psilocybin, ayahuasca, and peyoteU.S.
2020
(March)
MindMed becomes the first publicly traded psychedelics companyU.S.
2020
(July)
More than 45 companies claim to be engaged in the development and evaluation of therapeutic candidates from psychedelic substancesGlobal
2020
(Nov)
Oregon legalizes psilocybin and decriminalizes all drugsU.S
2020
(Nov)
Washington, DC decriminalizes entheogenic psychedelics U.S
2020
(Nov)
New research suggests DMT can stimulate the production of new brain cellsSpain
2020
(Dec)
MAPS completes first successful Phase III trial of MDMA-assisted psychotherapyU.S.
2020
(Dec)
Analysts announce that psychedelics could become a $100 billion marketGlobal

With study after study proving the many benefits of utilizing psychedelic substances for a range of both mental and physical conditions, huge progress in legitimizing this once stigmatized industry is now being made.

The Future of Psychedelics

Psychedelics’ newfound momentum looks set to continue well into 2021 and beyond, with the first major milestones hinting at what the next decade could hold for the industry.

YearMilestoneRegion
2021 (Jan)In Hawaii, a Senate bill put forward in January could legalize psilocybin and psilocin, otherwise known as magic mushrooms
U.S.
2021 (Feb)With California now introducing new legislation to decriminalize most psychedelic substances, we could see a sea-change of decriminalization across the world
U.S.
2021 (March)Over 285 active, soon to be active, and completed psychedelics trials are recorded around the world 
Global

The next chapter in the psychedelics story will center around biotechnology, new drug discoveries, and the many unknown applications of each of these substances.

Currently, the application of therapeutic psychedelics has mainly been targeted toward mental health conditions such as depression and anxiety. However, we have only scratched the surface when it comes to the myriad of ways we could harness the power of these sacred plants.

A New Era of Medicine

While the history of psychedelics is undoubtedly complex, it is clear that they are starting to play an important role in the evolution of medicine.

Even though studies on these substances were halted in the past, new research has proven the potential psychedelics have to alleviate some of the most hard-to-treat diseases when used in a safe, controlled environment.

As a result, these groundbreaking drugs could save millions of lives and add trillions of dollars to the global economy—and that’s just the beginning.

Tryp Therapeutics is an early leader in the psychedelic medicine space. The pharmaceutical company leverages the therapeutic properties of psilocybin to create new solutions for the treatment of diseases with high unmet medical needs.

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