🐸 Taco Bell Gets Even Better
(032) Fast charging with fast food
Good Morning
We missed you during the holiday! Hope you had a good one and welcome back.
New section alert! We’re excited about the content but definitely taking name suggestions on this one…
Lots of fun car news this week:
Facing overwhelming demand, Ford announced plans to double production of their EV F150, the Lightning, in 2022.
Chrysler announced plans for their entire fleet to be all-electric by 2028.
And in a bit of a curveball move - still isn’t clear exactly what they’re going for here - Sony announced plans to get involved in EV production.
The Greendicator
Top Deals of the Week
ChargeNet is installing its first EV charging stations in a Taco Bell in South San Francisco. Maybe they’ll add some at KFCs, where they’re rolling out Beyond vegan nuggets.
StoreDot, an Israeli startup building battery tech to charge EVs faster, raised an ~$80M Series D led by VinFast (PRN)
Xage, a 5.5-year-old, Palo Alto, Ca.-based startup working to keep critical infrastructure like water pipelines and electrical grids up and running securely, has raised $30 million in Series B funding. Piva led the round. (TC)
Ambercycle, a materials startup building an ecosystem around circularity in the fashion industry, raised a $21.6M Series A led by H&M’s venture arm, Kirkbi, and Temasek (PRN)
ChargeNet Stations, an EV charging platform targeting quick-serve restaurant parking lots, raised a $6.2M seed round led by Aligned Climate Capital (LI)
Green Theory
Ethicsnomics
With a surge in public awareness, businesses are donning marketing cloaks of social advocacy and environmental stewardship, and charging a premium for their “ethical” goods and services. Similarly, the financial sector offers investment opportunities that bundle supposedly socially conscious publicly traded stocks, though the definition of consciousness varies widely.
Enter Tariq Fancy, former Chief Investment Officer of Sustainable Investing at BlackRock, who’s ringing the alarm on ethical investing: he calls it a scam. Fancy’s former employer is the largest asset manager in the world, controlling over $9T (as reported in this clip that emphasizes BlackRock’s cheerleading for corporate environmental stewardship).
Why would Ethical Investing be a Scam?
According to Fancy, these portfolios were simply developed to court wealthy would-be do-gooders and capture higher fees. Since individual stocks and these bundles of stocks (called Exchange Traded Funds, or ETFs) are a secondary market, selling a stake in them doesn’t directly defund the operations of the company. After dismissing divestment as failing to divert capital from misbehaving companies, Fancy critiques Engine One’s shareholder activism strategy. This approach focuses on buying an influential stake in society-threatening companies (such as Exxon) and advocating for socially conscious board control. As he puts it, smoking rates in the 20th century did not decline because people fought for control of cigarette companies’ boards and reformed them from the inside. He adds that the substantive changes in civil rights of the 1970s did not come about from investing in less racist companies. Fancy explains that the boards of these companies have a legal obligation to maximize shareholder profits, skewing their incentives to act in the interest of the public. He sees these so-called green ETFs and superficial marketing campaigns, which have no proven benefit from an investment perspective, as an ineffective social lever, and an effort by companies to delay and distract from regulation.
What’s Fancy’s Answer?
Fancy’s ultimate goal: regulate the carbon market, among other government actions, to create real change in society. Fancy decries the sustainable investing insiders (his former colleagues) as upholding false narratives because of their financial incentive to preach. In that same vein, Fancy adds that these arguments for marginal change through reallocation of investments merely upholds the illusion that publicly traded companies can be trusted to self-regulate. He also describes individual action as a neoliberal bend–a manipulation to distract from genuine societal impact. As he puts it, someone who invests in a green portfolio is less likely to call their representative and demand a price on carbon: “People don’t do both”, he says. In fairness, Fancy concedes that shifting your investments to companies you deem to be more ethical could help on the margin, and provide personal satisfaction. Just as Fancy tries to expand the decision set from divestment vs. activism to include regulation, there may be a few other ways to think about sustainable investing.
Combatting Greenwashing: Getting your Hands Dirty
Before unpacking the rest of his argument, it’s worth conceding some pitfalls of the general ethical investing space. Fancy correctly asserts that green ETFs charge higher fees on average, and don’t necessarily return better results financially. At the same time, some charge regular rates, and–like any market–some perform better than others. Beyond the economic scam, many purported “green” bundles of stocks are heavily weighted toward or include companies instrumental in accelerating climate change, as filters focus narrowly on specific qualifications, ignoring others. The Carbon Collective does the best we’ve seen when it comes to thoughtful ethical qualifications. When it comes to picking investments, make sure to research beyond the superficial.
People Don’t Do Both?
Fancy is correct that regulation will triumph over secondary market investing when it comes to changing society, but that’s an odd dichotomy. Both can happen at the same time, and it’s much easier to direct one’s own money than even imagine political change in the current environment. Beyond that, people seem more unlikely to demand a price on carbon if they’re invested in a dirty portfolio that’s dependent on society bearing the cost of carbon. Fancy himself forgives green investment fund managers for lying to protect their industry, because people’s personal investments play a role in how they think, what they believe, and what they vote for. For that reason alone, it seems worthwhile to consciously divest from the companies and industries endangering our world–to divorce one’s personal motives and interests from businesses crippling access to a clean, sustainable future for all.
But the Capital!
Fancy complains divestment fails to deprive businesses of capital, but to that end we can exercise a boycott, refusing the business of companies that violate our values. This action may be easier or harder depending on the particular company, where you live, and your lifestyle, and Fancy would forgive you for thinking your individual action would be a meaningless neoliberal ruse. On the contrary, boycotts have been and continue to be a substantive part of organizing for social change and drawing attention to the need for regulation.
Further, we cannot shift all blame for society’s woes on politicians, thereby releasing ourselves, boards of directors, and fake green ETF managers from responsibility. Neoliberal capitalism privileges the narrative of individual action making a difference because it sets up a system where inequality can run rampant. True, there are mostly failed companies, and mostly ineffective personal boycotts, but this unequal, extreme system we live in ultimately creates powerful individual potential for a few. You could see it on a macro scale, such as one company dominating an increasingly unregulated market, and a micro-scale, where one person’s purchase decision may shut down an airline route, due to tight, metrics-driven economics. Until the neoliberal paradigm is changed, and regulation realized, each purchase decision is a bigger lottery ticket to having an outsized impact on systems we are most often powerless to change alone.
Not Legally Financial Advice :)
Accountability from the systemic to the personal level is the most comprehensive way to equitably avert greater crises. Still, even if one’s individual decisions had a miniscule effect on the outcome, registering one’s dissent with an unethical system is the right thing to do. Countless heroes have stood up to injustice despite their inevitable doom. Having the courage to pick investments responsibly seems like a low bar, and there will be time left to call Washington, too.
The Closer
Shoutout to my Ephs in the house
Great Green Theory this week - “Fancy explains that the boards of these companies have a legal obligation to maximize shareholder profits, skewing their incentives to act in the interest of the public.” I guess this is obvious at some level, but I never really realized it was a *legal* obligation for a board.