Timothy P. Dunn Talks Investing in a Time of Urgent Climate Change Warnings

Timothy P. Dunn, CFA is the Founder and Chief Investment Officer of Terra Alpha and contributor to the Virginia Impact Report, Vol. 1.

Tim’s article, The Case for Impact Through Public Equities (see link below), reviews Terra Alpha’s sustainable investment strategy. After reading Tim’s article, I (Matt Illian) asked Tim some follow up questions shared below.

Matt (VIIF): Many of us know that climate change is a problem but feel relatively helpless to change the current course.  What do you take away, if anything, from the recently released U.S. National Climate Assessment?

 Tim (Terra Alpha): While the recent U.S. National Climate Assessment wasn’t the first of its kind, it has sounded the loudest alarm. The report makes clear that current and projected climate-related impacts pose substantial risks to our economy. Among these risks are disruption of supply chains, shifts in the availability and prices of commodities, and increased risk to operations of U.S. businesses. Reports such as these, demonstrate the necessity for investors and business leaders to incorporate natural resource use into their decision-making processes.  

Terra Alpha’s investment strategy provides our investors with a better way to invest their assets, by incorporating all material environmental, social, and governance information to identify businesses that are better prepared and positioned for success in response to the growing impacts of climate change. It is our contention that our investment approach will provide our investors with better long-term financial returns, while driving the transition to a more sustainable economy.

Matt (VIIF): Beyond investing in your fund, what other recommendations do you have for investors who care about climate change and want to make their voice heard?

 Tim (Terra Alpha): Climate change and other environmental challenges (e.g., soil health, clean air, clean water, raw materials, forests) can seem both far away and overwhelming. This makes all of us feel there is little we can do. In truth, the solutions to these very real problems require collective and multilateral action from all of us. We must all be informed voters, savvy consumers, forward-thinking investors, mindful community leaders, and citizen advocates for change.

It is clear to us at Terra Alpha, that if investors rapidly move toward long-term and sustainable investment strategies, companies will respond by shifting to more sustainable operational practices and products and services. As the National Climate Assessment points out, our complex and interconnected natural and economic systems are particularly vulnerable to deterioration if we continue with “business as usual.” There are a growing number of legitimate investment products across the full spectrum of asset classes that allow investors to drive impact and champion climate action. We encourage all investors to seek out sustainable investment approaches because we believe that it is a better way to invest.

 Photo by Markus Spiske on Unsplash

or, to view the entire report, click below