By the time giant high-tech, cash-burning companies like Uber catch on to the $30-trillion-plus mega trend of sustainable investing, their competition may have caught up. Mentioned in today's commentary includes: Alphabet Inc. (NASDAQ: GOOGL), Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), NextEra Energy, Inc. (NYSE: NEE), TOTAL S.A. (NYSE: TOT).
Big money is shifting its capital to companies that are smart enough to figure out how to mitigate risks related to sustainability and climate crises, and still turn a profit.
Uber does neither. But a new entrant on the high-tech mobility scene does.
A global pandemic has exposed the weaknesses of tradition and there's no turning back. That's why 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.
Sustainability is now the name of the game, and nothing has made that clearer than COVID-19. This is the biggest "Emperor's New Clothes" story in decades.
The pandemic has laid bare most major industry segments in the world, from oil and gas to travel and transportation--and not the least, ride-sharing, an explosive trend itself that is now getting a dose of new reality.
With $30 trillion and counting pointing the way, an innovative high-tech mobility company such as Canada's Facedrive (FD.V) has a good chance of grabbing a slice of Uber's market share by turning ride-sharing into a sustainable industry.
Uber is neither profitable nor sustainable. But Facedrive, plotting a path way ahead of this trend, is positioning itself to be both. How? By listening to Big Capital and turning environmental concern into the new industry gold standard.
More specifically, by transforming ride-sharing from one of the worst polluters into a more carbon-neutral endeavor that offers riders a choice of EVs and hybrids and plants trees along the way to offset emissions for those riders who don't make that choice.
How To Make Money Under Current Circumstances
Not only will a company's pandemic response be a major determination of how they are graded in the future, but so will their response to every conceivable crisis the future may have in store, from climate change to another pandemic and everything in between.
Even before COVID-19, sustainable funds were outperforming their conventional counterparts throughout 2019. The pandemic simply proved up the trend and convinced big capital that this is where the smart money goes.
Between 2016 and 2109, impact investing grew 34%. Since then, the surge has been "skyward" according to Nigel Green, CEO of the deVere Group. And tech giants are playing a major role in this push.
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), too, 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.
That brings us full circle to Facedrive, and the masterminds behind this Canadian product of Ontario's version of "Silicon Valley", who latched onto the sustainability-as-profit model way back in 2016, when it was just emerging as a potential trend.
When they launched in 2019 in Canada, it was precisely at the time that sustainable investing was a solid mega-trend. For Facedrive, it's about creating a profitable version of ride-sharing that recognizes mutually beneficial relations with communities, people and planet. That means improving on Uber's mandate. That means bringing a solution to Uber's biggest problems: Pollution without profit.
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.
This is also one of the primary reasons energy companies taking environmental goals seriously have seen some positive attention from shareholders.
As the world's leading solar and wind energy producer, NextEra Energy (NEE) is playing a pivotal role in the path towards sustainability. In fact, in 2018, the company was the number one capital investor in green energy infrastructure, and the fifth largest investor across all sectors.
In addition to its already massive impact on global climate change, it has a plan to invest another $55 billion in American energy infrastructure in the next two years. All while maintaining a firm commitment to reduce its dependency on foreign oil. Since 2001, it has weaned itself off foreign oil almost completely, reporting a 98% reduction over the past 20 years. Even more enticing, however, is its commitment to building shareholder value. Over the past 15 years, shareholders have seen 945% returns.
Even Big Oil can't escape the investor pressure to go green. And no other oil major takes this more seriously than Total (TOT). In fact, Total has pledged to work towards all of the United Nations' sustainability goals. From the environment and climate to the people working with and impacted by its business, Total is taking the goals to heart.
Total checks every box in the ESG checklist. It is promoting diversity and safety, making massive changes in its day to day operations to ensure that its business is environmentally sound, and has even committed to going carbon neutral by 2050 or sooner. It's no surprise that shareholders are loving its forward-thinking approach.
It doesn't pay to stubbornly resist the battle against climate change. It pays to rush to the front line, as Facedrive has.
Monetizing Sustainability: The Holy Grail
What's changed is this: Under investor pressure, enough companies are beginning to figure out how to make sustainability profitable because lack of sustainability isn't turning out to be the cash cow they thought it was. If you can't monetize it, then your $100 billion valuation dreams will never be realized. Again, ask Uber.
Facedrive's entire ecosystem is about revenue from the rider relationship. It's about more than just getting from Point A to Point B. It's about an all-inclusive experience--the only thing outside of sustainability and impact that attracts millennial investors these days.
This is where ride-sharing becomes what it was always meant to be: A high-tech business, rather than just a taxi replacement. 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.
Will Smith, whose Bel Air Athletics clothing brand is betting that Facedrive is the ride of the future. That's why he's co-branding an entire line of merch with Facedrive. It's also why WestBrook Inc., the company he shares with his wife Jada Pinkett Smith, is partnering with this bold startup that is planning on expanding globally to challenge Uber for the throne.
Even better: It's green and in line with Facedrive principles. Not only is everything being made in North America, but the goal is to ensure by next year that all materials are 100% sustainably sourced. Some 1,000 new products co-branded by Bel Air and Facedrive are ready to launch, with pre-orders coming soon on the Facedrive website.
The company is also rolling out a comprehensive health initiative, timed for rapid deployment to the frontlines of the coronavirus pandemic. Facedrive Healthcare includes everything from discounted rides for healthcare workers and specialized vehicles for anyone with additional needs to contactless delivery of essential over-the-counter medicines and medical supplies, including high-tech management of automatic refills. Facedrive Eats, which is now piloting in six cities in Ontario and is planning to expand to other regions soon.
For investors looking for the next big trend, this is it. There's money in mitigation, and it has nothing to do with politics.
It's about people--with Millennials in the lead--finally realizing that climate change is a very real threat to our lives and livelihoods. And big money follows the consumers because that's where the profit is. Pandemic risk increases as the planet heats up, and so does global financial instability, and they feed on each other.
Uber with its massive cash burn and its negative footprint, doesn't align with the $30-trillion trend that is reshaping the investment world. Facedrive does, and it's on a sustainable monetization binge.
By Ian Jenkins
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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; that the demand for environmentally conscientious ride sharing services companies in particular will grow and take a larger share of the market; that Facedrive's marketplace will offer many more sustainable goods and services, and grow revenues outside of ride-sharing; that Facedrive can achieve its environmental goals without sacrificing profit; that Facedrive Eats will expand to other regions outside southern Ontario soon; 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 plan. 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 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; 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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