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Green Investing and Green Investing Funds

The transformation to a green world is a megatrend that will continue to impact the investment environment the coming decades. With increasing legislative pressure, and high global sustainability goals, this trend will only become stronger. From an investor perspective, it can be beneficial to invest in a way that promotes the efforts that will enable this transformation. By committing to green investing, investors will play a crucial role for the transition to a more sustainable future, and at the same time get investment exposure towards this global megatrend. Green investing includes investing in companies that develop the products and services that will enable the green transition but also investing in companies that actively work to improve their sustainability efforts.

Benefits of investing in green investment funds

By investing in areas such as commodities (precious metals, copper, lithium, etc.) and green technology through green investing funds, investors support the transition towards a greener economy. Green investing can bring the following benefits to an investor:

  • Exposure towards the companies that develop green technology: Green technology companies are at the heart of the green transition developing products and services for production of environmentally friendly energy, reduced energy consumption and storage. By using green tech investments, the investor contributes to the acceleration towards a greener economy.
  • Exposure towards crucial metals: Precious metals mining companies have a central role as the world transitions to become more sustainable. The metals extracted by the miners are essential to create the green technologies of the future. Gold and silver have wide industrial uses and make central parts in the production of electric car batteries, solar cells and computers. Without these metals, there are simply not the same opportunities to reach the world’s joint climate goals. By buying into precious metals mining funds that have a true sustainability and impact investing policy, investors can contribute to the green transition as fund managers can actively impact these companies to progress quicker in their sustainability work. Investors that want to apply sustainable investments in this area should look for green investing funds that work specifically to influence the mining companies in which the fund invests to use modern technologies such as solar energy and fuel cells in their operations.
  • Support sustainable mining: At the same time, as the mining companies’ extraction is an important factor in achieving set goals for sustainable development, it is associated with several ESG-risks. Mining companies have historically contributed to adverse local environmental effects, greenhouse gas emissions and socio-economic disturbances in the form of, for example, poor working conditions. This is now changing, as more mining companies start to use renewable energy to operate the mine, fuel cell trucks, and restore the mining site when the mine is closed.
  • Support global sustainability goals: The majority of the world's major mining companies are working towards reaching the UN’s 17 goals for sustainable development (SDGs) in their sustainability reporting. In order to invest sustainably in mining, for example by using green investing funds, investors need to look for funds that stay up to date with how the sustainability work is progressing and how the goals are being met. This requires a large amount of data and an active dialogue with the companies to get a fair picture.

How to invest in green investment funds

New regulations will make it easier for investors to understand wether an investment can be considered as green/sustainable. EU's Sustainable Finance Disclosure Regulation (SFDR) introduces a categorisation of funds where the ones that are considered as sustainable goes under the article 8 and 9. Article 8 and 9 portfolios should actively integrate ESG attributes throughout the investment process, with consistent and repetitive procedures backed by a formal methodology. You can read more about this categorisation here.

Information about a specific fund with regards to SFDR categorisation should be provided in the fact sheet for the respective fund. If you can not find the information, reach out to the fund company. All AuAg’s funds are categorised as article 8 funds, hence “green funds”, under the Sustainable Finance Disclosure Regulation.

Why invest with AuAg?

  • AuAg have funds that focus on providing exposure to precious metals and green-technology elements. What they have in common is that these assets offer protection against monetary inflation and are necessary in the transition to a green economy – trends that are highly topical today.
  • AuAg's funds fit well into a portfolio of traditional assets as they have low correlation with equities in particular.
  • AuAg offers exposure to precious metals mining, and green tech companies through the funds AuAg Silver Bullet, AuAg Precious Green and AuAg Gold Mining ETF. All funds actively promote change with regards to sustainability and actively include only the most sustainable companies in the world according to ESG risk ratings.
  • AuAg has a well-defined investment process to ensure that the companies in the funds’ portfolios work according to a clear sustainability agenda. Through a strategic collaboration with Sustainalytics - a world-leading supplier of ESG data - AuAg can ensure that the quality of the data underlying our analysis meets the highest standards.
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