I had a chance to look at what might be the future of ESG investing last week in the company of Edward Soffer, ESG manager for Interactive Brokers.
Edward is based in the US and is working on some very interesting and exciting projects he was kind enough to walk us through one of these.
The Interactive Brokers Impact App, which, is designed to allow clients to “put their money where their heart is” as the firm’s strapline has it.
The app brings together commission-free and fractional share trading alongside sustainable, environmentally friendly and socially responsible investing.
Carbon offsets in the palm of your hand
The latest addition to the Impact app is Carbon Offset which allows individual investors to calculate and offset their own carbon footprints at a fixed cost, on an annual basis.
Interactive Brokers has partnered with data specialists Sustain.Life to create a calculator within the Impact app that will accurately predict the carbon footprint that you and your household produces, through their daily activities and consumption.
Users simply enter relevant information by answering some questions, and data science will do the rest.
Having completed the data input the calculator tells the user how much carbon they will need to offset, to neutralise their carbon footprint.
Not only that but the app tells you what that’s going to cost.
Interactive Brokers has partnered with CBL a digital carbon exchange to facilitate the carbon offset transaction.
And that means that removing your carbon footprint becomes as simple as authorising the deal on the Impact app, and watching the money, to pay for the carbon offsets being transferred out of your Interactive Brokers’ account.
Once purchased the carbon offsets are deleted from the available pool, and all carbon transactions are recorded and tracked within your Interactive Brokers transaction history.
As well as calculating and helping to offset household carbon footprints, Interactive Brokers has made it possible for travellers to offset the impact of their journey.
So for example, if you are flying from New York to London you can offset that, by using a dedicated flight time offset function in the Impact app.
On the face of it, Interactive Brokers has made the whole process pretty much foolproof.
However, for now, at least it will remain on a wish list for UK investors, as carbon offset and some other facets of the Impact app, such as charitable donations are only available to US account holders at the present time.
Mr Soffer made it clear that Interactive Brokers does have designs on launching the full Impact App to UK and European customers, in the not too distant future.
Not least because the ESG investing culture in those two markets is far more advanced than it is in the USA.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
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