In this post we explore the world of sustainable investing with Eric Rubenstein—a former commodities trader turned climate investor. Based in Houston, Texas Eric has worked with companies like Louis Dreyfus and Citigroup before co-founding New Climate Adventures a venture fund focused on technologies that reduce environmental impact. With a background in energy and finance Eric brings a different perspective on the importance of sustainable investment strategies for a more resilient future.
To listen to the full podcast episode go here: Angels, Exits, and Acquisitions Podcast. Here he talks about the big forces driving sustainable investing, his approach to the climate crisis and how new technologies are setting the standard for environmental impact.
From Commodities Trading to Sustainable Investing: An Unlikely but Useful Journey
The path to becoming a sustainable investor can be winding. Eric started their career on the trading floor of a commodities firm. They focused on traditional energy commodities and worked for a company that was deeply embedded in the industry. This gave them valuable experience in global markets, the interconnectedness of commodities and the complexity of supply chains.
But a growing concern for the climate crisis and personal commitment to sustainability led them to change their investment approach. Their early forays into venture capital and strategic investments were to streamline processes and enhance trade analytics for their employer and evolved into exploring new markets driven by the growing demand for sustainability.
Seeing the Value of a Circular Economy: Early Sustainable Investing
Their first forays into sustainable investing were into the circular economy. They saw investment opportunities in companies that were using recycled plastics in consumer products. They invested in companies that were developing technologies that could turn waste materials (like polyester clothing) into new plastic bottles. This is the core of sustainable investing: creating value while minimizing harm.
This was around the time that corporate sustainability pledges were starting to roll out, especially from big companies like Coca-Cola and Pepsi who were looking to meet their commitments to use recycled plastics in their packaging.
Broadening Horizons: Sustainable Investing Strategies and Social Impact
Sustainable investing covers many strategies to create social impact and financial returns. Here’s how different approaches are playing out:
Sustainable Investment Strategies:
Socially responsible investments: Companies with high moral fibre.
ESG mutual funds: Companies rated on environmental, social and corporate governance (ESG) scores.
Sustainable funds: Invest in companies with green and socially responsible practices.
ESG Scoring:
ESG scores help investors find companies with good governance and social impact.
The Morgan Stanley Institute for Sustainable Investing sees ESG scoring as a measure of corporate responsibility and driving market awareness of these metrics.
Financial Performance and Social Returns:
Harvard Business School research shows no financial trade-offs when you invest sustainably.
Sustainable investing is for clients who want to use their investment dollars to make a positive impact.
Sustainable funds are compared to traditional funds and show competitive returns and extra social impact.
Beyond Offsets: Carbon Capture and Utilization as a Sustainable Investing Strategy
As they delved deeper into sustainable investing their focus moved to the emerging world of carbon credits. While forestry based carbon offsets were the norm at the time they saw the potential of new technologies that could capture and utilize carbon dioxide. This was a more comprehensive approach to decarbonization, going beyond offsetting emissions to actually removing and using existing CO2.
Across these different investment opportunities a theme emerged: reducing, removing or avoiding carbon emissions. This cemented their commitment to sustainable investing and led to the creation of New Climate Adventures, a fund to support the development and adoption of climate friendly technologies.
Corporate Governance in Sustainable Investments
As sustainable investing evolves corporate governance is at the heart of ESG funds. Here’s how governance plays out in investment strategies:
ESG Funds and Corporate Standards:
ESG funds rate companies on corporate governance and align investment strategies with ethical standards.
Companies with higher ESG scores get investors who want growth and good management.
Increased Transparency and Accountability:
ESG standards make companies more transparent, more trust with stakeholders.
Investors in ESG funds are more likely to support companies with environmental, social and corporate governance (ESG) policies.
ESG Funds and Options:
ETFs and mutual funds for sustainable investing across asset classes, public equities and fixed income.
Sustainable funds for companies with lower carbon footprint and community responsible investing.
Sustainable Investors: Connecting the Gap Between Innovation and Scalability
Sustainable investors serve as a critical bridge between innovation and large-scale implementation. While many new technologies are technically viable, they often require substantial capital and strategic support to reach meaningful market impact.
A background in commodities trading provides valuable insights into these emerging technologies. Knowledge of both physical and financial markets, coupled with experience in introducing new products, enhances the ability to make informed, impactful investment decisions.
Re-thinking Investment Philosophy: Going Beyond Absolute Dollars
In sustainable investing, a broader perspective is essential—going beyond traditional financial metrics to include additional criteria that support long-term viability and positive impact. Key factors include:
ESG Criteria: Environmental, social and governance (ESG) is key to evaluating long term viability and impact of investments. Companies with good ESG performance are better equipped to handle future challenges and be part of a more sustainable world.
Strategic Value: Sustainable investments often align with company sustainability goals so strategic partnerships and collaborations that go beyond financial returns.
Impact Measurement: Sustainable investors are measuring and quantifying the positive impact of their investments on the environment and society. This data driven approach shows the real value of sustainable investing and attracts more capital to this space.
The Science of Materials: The Future of Sustainable Investing
Material science and applied sciences hold immense potential to address the climate crisis, making them key areas of interest for sustainable investors. Companies developing solutions in these fields are driving impactful change, particularly in:
Waste Reduction and Recycling: Converting waste materials, from plastics to agricultural byproducts into valuable resources is at the heart of the circular economy. This reduces our use of virgin materials and minimizes the environmental footprint of production and consumption.
Carbon Capture and Utilization: Capturing and using carbon dioxide, whether from industrial sources or directly from the atmosphere, is a path to decarbonising many industries. This reduces emissions and creates valuable products from sustainable fuels to new building materials.
Bio-Based Materials: Developing and scaling bio-based materials like bioplastics can reduce our reliance on fossil fuels and offer more sustainable options for many products.
Sustainable Investing in Practice: Real Life Examples of Innovation and Impact
Several real-life examples illustrate how sustainable investing can drive meaningful change:
Recycled Plastics: Investments in companies developing new recycling technologies are tackling the global plastic waste problem and creating a circular economy for this widely used material.
Sustainable Aviation Fuel: The development and production of sustainable aviation fuel (SAF) is key to decarbonising the aviation industry. Investments in companies that are developing SAF are getting this innovation to market.
Carbon Capture and Utilization: Investments in companies developing carbon capture and utilization technologies are supporting the transition to a low carbon economy. These technologies are creating valuable products from captured CO2, showing that growth and emissions reduction can coexist.
The Future is Now: Sustainable Investing for a cleaner, more resilient world
The future of sustainable investing is promising. With advancing technology and growing climate awareness, more investors recognize the financial and ethical need to support companies making a positive impact.
Key areas of focus for a sustainable future include:
Sustainable Consumer Products: A world where everyday products are made from sustainable materials, use less energy and water and generate minimal waste. This requires innovation across the whole supply chain, from raw material sourcing to designing products for circularity.
Green Buildings: Homes and buildings designed and built with sustainable materials and energy efficient technologies. This reduces the environmental footprint of the built environment and operating costs while improving occupant health.
Clean Energy: A shift to renewable energy sources like solar and wind power for our homes, businesses and transportation systems. This is key to reducing emissions and creating a more resilient energy grid.
Sustainable Investing in Motion: Choices for Investors
Sustainable investing covers a broad range of approaches and styles to suit different investor preferences and financial goals. Some of the main areas of sustainable investing include:
ESG Investing: ESG investing takes into account environmental, social and governance (ESG) factors in investment decisions. This approach looks for companies that are managing these factors well and creating a more sustainable and equitable world.
Impact Investing: Impact investing seeks to generate measurable social or environmental impact alongside financial returns. Impact investors actively look for companies and projects that are addressing specific social or environmental challenges.
Thematic Investing: Thematic investing invests in specific themes that are aligned to long term trends such as climate change, resource scarcity or technological innovation. Investors can target specific sectors or industries that will benefit from these trends.
Asset Class Choice in Sustainable Investing
Investors can now choose sustainable options across multiple asset classes from public equity to fixed income:
Public Equity Investments:
Exposure to companies reducing their environmental footprint.
Morgan Stanley Institute research shows sustainable equities can deliver strong returns.
Fixed Income Sustainable Funds:
Invest in bonds and other debt instruments that support projects with environmental or social benefits.
A good choice for those looking for regular income and low risk within sustainable investing.
Sustainable Funds vs Traditional Funds:
Registered investment companies and robo-advisors offer ESG portfolios alongside traditional funds.
Research shows sustainable investment strategies can match or beat traditional funds with the added bonus of ethics.
Get started with Sustainable Investing: The road to a better world
Sustainable investing goes beyond risk mitigation; it’s about embracing opportunities to shape a more sustainable future. By supporting companies developing solutions to critical global challenges—from climate change to resource scarcity—investors can drive meaningful impact.
This approach combines financial returns with the pursuit of a cleaner, more resilient world, aligning investment strategies with values to foster positive change. Sustainable investing is a compelling choice for those who seek not only returns but also a genuine contribution to a better future.
As this field evolves, we can expect even more innovation and impactful solutions, paving the way for a sustainable world for all.
Go deeper with Angel Investors Network
Learn how ethical investing and green investing can be part of your portfolio through Angel Investors Network’s exclusive resources and opportunities. Here’s how we can help you get started with sustainable investing:
Angel Investors Network Membership
Join Angel Investors Network and become part of a select group of investors who are prioritising impact investing that aligns with sustainable investing values. Membership gives you access to investment opportunities where sustainable investing means not just financial returns but minimising the carbon footprint and supporting ventures that manage natural resources responsibly. As a member you’ll get curated ESG scores and ethical investing insights and connect with other like-minded plan participants who are focused on impact investing. Start here: Angel Investors Network Membership.
Angel Investors Network Marketplace
The Angel Investors Network Marketplace offers a range of opportunities that match your investment approach and values. Whether you’re looking for mutual funds or ESG investments our marketplace allows you to find ventures that put sustainable investing principles first with no financial trade off and high ESG integrity. Check out new investment options here: Angel Investors Network Marketplace.
Watch full episode on YouTube
Listen to the full episode with Eric Rubenstein here. Learn More about Eric Rubenstein:
Website: New Climate Ventures
LinkedIn: Eric Rubenstein
