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[Event Recap] [BASIC Event] Divestment and Reinvesting in Massachusetts Companies

Marion Rockwood

On September 19th, the Climate Action Business Association (CABA) hosted BASIC members at the Old West Church to learn the results of the organization's’ newly-issued Local Emerging Market Reports on investing in the regional clean energy economy. CABA’s Michael Green and Kate Galbo moderated a panel that included Matt Patsky, CEO of Trillium Asset Management, and David Miller, Executive Director of Clean Energy Venture Group.

CABA began in 2013 to encourage independent businesses to be more aware of and have more of a say in climate policy-making. CABA seeks to meet the demand from these local businesses not just to divest from fossil fuels, but to be able to reinvest in Massachusetts communities.

Matt Patsky of Trillum Asset Management gave us a brief history of SRI going back 300 years, explaining that though the terms and language have changed, investors have long been interested in trying to understand the impacts their money is having beyond  financial returns. Though these investors may want to divest from fossil fuels, that divestment must be paired with impact investing in alternative energy companies to maximize its effectiveness. The Paris Climate Agreement’s widespread support among countries shows that there is movement toward restricting carbon emissions, which will affect the price of carbon.

David Miller became an angel investor after his own tech company’s success. His Clean Energy Venture Group invests in companies that can massively scale, achieve positive cash flows on their own, and don’t need a lot of capital. They are investing in early stage companies and are very involved in their management. Twenty-three of the group’s 27 portfolio companies have been successful.

The panel engaged in a rigorous Q&A session that touched on the following topics:

●     Can we address climate change with capitalism? The panelists agreed that making externalities internal to companies’ cost structures is crucial and that a carbon tax is the most effective way to achieve that.

●     What is the current supply and demand environment like for clean energy investing? Miller is seeing that the supply of ideas is plentiful, but demand for capital exceeds supply. Patsky added that those who have lost money in alternative energy in the past may be tentative to get back into those types of more volatile investments.

●     What are some off-the-wall solutions you’re most excited about? The panelists offered up electric bikes (Michael Green), storing energy in elastic rock formations (Miller), and a purely direct current grid (Miller). Patsky pointed out that investments in energy efficiency improvements, such as stopping natural gas leaks, could eliminate the need for a new pipeline in Massachusetts.

●     Green, Miller, and Patsky also offered cautious support for retrofitting dams for hydroelectric power, enthusiastic support for onshore wind projects, and intrigue for the Tesla/Solar City merger.

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