There is a $30-trillion-plus megatrend transforming Wall Street. And it's affecting everyone from asset management giants, to global tech goliaths. Those who saw it coming are already winning big, while those that missed out are now at risk of losing. With some $7 trillion in assets under management, BlackRock, Inc. (NYSE: BLK) is a prime example of an industry giant that got ahead of this trend. Also mentioned in today's commentary includes: Apple Inc. (NASDAQ: AAPL), Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc. (NASDAQ: GOOGL).
The new king of Wall Street recognized and bought into the sustainable investing ethos long ago and is now looking to take its sustainable portfolio from $90 billion to more than a trillion dollars.
But not everyone saw this shift to ESG (environmental, social, and governance) investing coming. In fact, some of the biggest tech giants in the world seemed to entirely ignore it. Uber, for example, is not a sustainable investment. It burns through gasoline as fast as it burns through cash and doesn't even turn a profit.
Companies like Uber are at risk to be overshadowed by new entrants, such as Canadian startup Facedrive (FD,FDVRF) - the first and only ride-sharing platform to offer both EVs and an opportunity to plant trees as you ride.
Not only is Facedrive's central business sustainable, but it also constantly engages with major societal issues. Most recently, it developed a new technology - TraceSCAN - to help mitigate the spread of the COVID-19 virus. This tech is already in process of being adopted by the 130,000 Canadian members of The Labourers' International Union of North America and Facedrive is in talks with several other companies and government agencies about implementing its tech as Canadians return to the workplace.
From Blackrock to Facedrive, it is clear that the ESG investment megatrend is already well and truly underway. And when the dust settles on this global pandemic, it will be the companies that reflect this new global norm that will likely benefit most.
The New World Order: Where Money Will Be Made
Sustainable investments wildly outperformed conventional in Q1 2020, and the world's biggest hedge funds are betting trillions that this is the new path to profit.
Larry Fink's BlackRock isn't only the largest exchange-traded fund (ETF) specialist in the world now, but its funds tend to own 5% or more of U.S. listed companies, according to Reuters. And it has also become the Federal Reserve's key go-to for expertise, including with its trillion-dollar COVID-19 rescue package.
That's a lot of power to wield, and it doesn't just make BlackRock the new king of Wall Street--it makes the fund's ESG investing strategy even more than a megatrend: It makes it a gigantic voice on investing. And that voice is saying that going forward, big money will invest in companies that have public approval and can mitigate risk on a number of levels, from climate change to pandemic and everything in between.
Facedrive understood this back in 2016, before it was a megatrend, and now it's positioned to benefit measurably from its strategy of profit from sustainability, and its "people and planet first" business model.
When Facedrive launched in 2019 in Canada, it was precisely at the time that sustainable investing was a solid mega-trend. And now, amid a global pandemic, they are expanding--and, again, the timing couldn't be better. COVID-19 has shown us exactly how deeply interconnected our basic systems of survival are, whether it's to battle a virus or fight climate change.
A recent study by the Union of Concerned Scientists estimates that the average (U.S.) ride-hailing trip results in 69% more pollution than whatever transportation option it displaced.
That's a huge number, that scientists estimate is actually higher in densely populated areas. In this age of green investing, this is a data-point that green-conscious customers everywhere are finding hard to swallow. But now, they don't have to. With Facedrive, they can contribute to planting a tree every time they take a ride. It gives consumers a choice they have never had before.
The fact that Uber hasn't made a dime in a decade only pushes the ESG investment thesis further. A decade on and Uber is still only just hoping to achieve profitability in the fourth quarter of 2020 - also a year in which it will lose more than $1 billion.
It doesn't pay to stubbornly resist the battle against climate change. It pays to rush to the front line, as Facedrive has.
Where Three Megatrends Meet
The $30-trillion+ ESG investing megatrend converges with the disruption of the projected to soon be $8-trillion global transportation service industry and the explosive power of the food delivery segment, which is set to top $98 billion by 2027 to create an investment opportunity that could top the smartphone revolution in gross revenue.
A winner of the food delivery war will be the business model that defies the out-of-control cash burn, broadens the revenue potential, and wins the hearts and minds of every stakeholder in the chain, including drivers and restaurants.
While Just Eat Takeaway is prepared to pay a premium for Grubhub - the delivery service with the biggest US market share, Facedrive (FD.V,FDVRF), the new face of "ride-sharing", looks like it can make a food delivery acquisition deal for pennies on the dollar.
Facedrive isn't just challenging Uber in ride-sharing. It's planning on challenging for the food delivery throne, as well.
In fact, Facedrive has an innovative hand in all three megatrends, and now it's expanding--with intentions to go global. It's about much more than just hailing a ride without leaving a carbon footprint. It's about an ecosystem of revenue based on the company-rider relationship of convenience.
Just last month, Facedrive Foods kicked-off its aggressive expansion drive in the segment, entering into a binding term sheet to acquire assets of Foodora Canada. This move is especially significant because Foodora Canada is a subsidiary of Delivery Hero, a $20-billion European multinational food delivery service that operates in over 40 countries and services more than 500,000 restaurants.
Facedrive Foods' acquisition of Foodora Canada's assets would give Facedrive a big revenue boost and a huge jump into the space of its major Canadian food delivery competitors such as Uber Eats and Skip The Dishes. Facedrive would obtain instant access to hundreds of thousands of Foodora Canada's customers and 5,500 restaurant partners. With this move, Facedrive Foods would overnight position itself into the top echelon of Canadian food delivery services and turn up the heat on major incumbents in the space.
Facedrive is not just a platform, it's a provider of goods and services--the only thing outside of sustainability and impact that attracts some millennial investors these days. That means everything from medicine and "merch" to short and long-distance mobility, healthy choice food deliveries, and much more. It's sustainability on wheels.
BlackRock is the new king of Wall Street. ESG is the new king of investing. And Facedrive is on a major monetization drive that hopes will position it right in the middle of where it all comes together.As BlackRock leads the ESG push, it's worth taking a look at which companies its investing in and why.
Microsoft (MSFT) is a prime example of a company pushing sustainability into the center stage of its operations. In fact, Microsoft is going above and beyond in its carbon emissions pledge. It is aiming to be carbon neutral in the next decade. Not only is the tech giant taking a leadership role in reducing its carbon emissions, but it is also at the forefront of a technological wave that is actively helping other companies curb their emissions, as well.
Microsoft has created numerous resources to help monitor and evaluate the impact of different businesses on the environment, helping gather data to better understand where and how the world can improve. Additionally, Microsoft is creating tools to better regulate the use of water and curb the world's growing waste problems.
Facebook (FB), for example, is taking an innovative approach in its vision to reduce its carbon footprint. Its data centers are some of the most energy-efficient - and water-efficient - in the world. And it's only getting started. By the end of 2020, Facebook is aiming to have all of its data centers running on 100% renewable energy. Additionally, Facebook has committed to adding over 4.0 GW of renewable energy to the grid.
Facebook has even gone a step further with its focus on building more sustainable workplaces. It's building designs incorporate a number of renewable energy sources and water recycling methods, in addition to promoting the recycling and sustainability of all products consumed on site.
Google (GOOGL), for its part, is focused on raising the bar for smart use of the world's resources. Like Facebook, Google is creating sustainable, energy-efficient data centers and workplaces. It is also leveraging artificial intelligence to develop more sustainable energy use.
Google is also focused on creating a sustainable supply chain. It is committed to improving the lives of everyone connected to its products, from miners to drivers and beyond. Additionally, it is actively reducing its environmental impact by working with suppliers to provide them with the tools they need to become more energy efficient.
Not to be outdone, Apple (AAPL) has made significant moves towards renewables, as well. All of Apple's operations run on 100% renewable energy. "We proved that 100 percent renewable is 100 percent doable. All our facilities worldwide--including Apple offices, retail stores, and data centers--are now powered entirely by clean energy. But this is just the beginning of how we're reducing greenhouse gas emissions that contribute to climate change. We're continuing to go further than most companies in measuring our carbon footprint, including manufacturing and product use. And we're making great progress in those areas too," CEO Tim Cook explained.
By Nick Sullivan
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This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the demand for ride sharing services will grow, and transportation as a service industry will reach $8 trillion; that the demand for environmentally conscientious ride sharing services companies in particular will grow quickly and take a much larger share of the market; that Facedrive's TraceScan app will be adopted by many unions and companies; that Facedrive's marketplace will offer many more sustainable goods and services, and grow revenues outside of ride-sharing; that new products co-branded by Bel Air and Facedrive will sell well; that Facedrive can achieve its environmental goals without sacrificing profit; that Facedrive Foods will expand to other regions outside southern Ontario soon and will close its purchase of Foodora; that Facedrive will be able to fund its capital requirements in the near term and long term; and that Facedrive will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include changing governmental laws and policies; the company's ability to obtain and retain necessary licensing in each geographical area in which it operates; the success of the company's expansion activities and whether markets justify additional expansion; the TraceScan app may not be adopted because of better apps offered by competitors or because of expense the ability of the company to attract a sufficient number of drivers to meet the demands of customer riders; the ability of the company to attract drivers who have electric vehicles and hybrid cars; the ability of Facedrive to attract providers of good and services for partnerships on terms acceptable to both parties, and on profitable terms for Facedrive; that the products co-branded by Facedrive may not be as merchantable as expected; that Facedrive does not close the purchase of Foodora and even if it does, the purchase does not bring the customers, partnerships or revenues expected; the ability of the company to keep operating costs and customer charges competitive with other ride-hailing companies; and the company's ability to continue agreements on affordable terms with existing or new tree planting enterprises in order to retain profits. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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