More Than Divesting

Jochen Wermuth

Founder and CIO, Wermuth Asset Management

Toniic Member Jochen Wermuth shares insights gathered during his journey beyond divesting in fossil fuels toward deeper impact in his portfolio. “Across all asset classes, one can be an impact investor and I believe we can jointly stop climate change.”

I am Jochen Wermuth. I am the founder of family office Wermuth Asset Management and I’m on the steering committee of 100% Impact Group and the Europeans for Divest/Invest.

It occured to me that every penny in a bank account has an impact, one way or another. I think it’s important to be conscious of your investments and try to have a positive impact.

Initially I thought after Chernobyl that one should demonstrate against nuclear power and so forth but they kept on carrying me away. So I thought I would do a Bloomberg: become very rich in finance and do good. And then one day I noticed that just doing good for Greenpeace and then, at the same time, investing in oil companies wasn’t very consistent. Charly Kleissner pointed this out to me. So having gone to the Arctic and seeing the oil spilling into the Arctic Sea, causing cancer to the population around them, I figured it was immoral to invest in oil companies. So since then we have started to divest in oil companies and invest in renewables and resource efficiency. We do it across asset classes. So the cash we try to keep in a green bank account; the bonds, we buy green bonds; equities, we try to exclude the “Underground 200” (the largest fossil fuel producers) and also other related companies on the long side but we do short them. 

On the private equity side we invest in companies that change the world we live in by producing, for example electric power in new and cheaper fashions – in a renewable fashion. Electric power is now at 3 cents per kilowatt hour, which is equivalent to 5 dollars a barrel, so it makes no more sense to produce fossil fuels. We also invest in electric cars that use their batteries to charge into the grid; they earn 2,000 euros a year and just cost 20,000 euros, so nobody should buy a combustion engine car anymore. On the infrastructure side, obviously there’s now wind available offshore for 5 cents a kilowatt hour in Denmark ([???1:47] to 10 dollars a barrel). There’s water purification that can be done much more energy efficient[ly]. There’s agriculture that needs to be addressed. So on the real asset side, sustainable agriculture, sustainable forestry, sustainable buildings, self-sustaining communities. So across all asset classes, one can be an impact investor, and I believe we can jointly stop climate change because we are enough. We only need 0.2 percent of global financial assets in equity to stop all global emissions. We just need 1 percent of annual income to stop global emissions.

We need to do it if we want to survive as a species, therefore I’m very happy to be a 100% impact investor.