According to the UN Intergovernmental Panel on Climate Change (IPCC), the evidence is clear that important tipping points, leading to irreversible changes in major ecosystems and the planetary climate system, have already been reached or passed. Leading publications are increasingly using the term ‘climate crisis’, instead of ‘climate change’. The stark reality of climate change has major financial implications. Mark Carney, Governor of the Bank of England and François Villeroy de Galhau, Governor of Banque de France, both wrote in the Guardian this year that the climate crisis requires “a massive reallocation of capital. If some companies and industries fail to adjust to this new world, they will fail to exist.” While climate change poses risks and opportunities to most industries, few industries are in the crosshairs quite like the energy industry. Oil and gas companies are facing pressure from regulators, pressure from consumers, and pressure from investors. Exxon is presently being sued by the state of New York for misleading the general public and investors about the health effects of oil and gas and for hiding the long term impacts of carbon dioxide in the atmosphere. Companies and investors alike are concerned about the costs associated with stranded assets - oil and coal deposits that will ultimately be left in the ground. At Honeytree, we don't hold any fossil fuel companies in our portfolio because of the risks noted above and the fact that energy companies don't demonstrate the consistent responsible growth that we require in our portfolio. Their businesses are cyclical, face major policy and regulatory uncertainty, and are dependent on the price of oil. While we are aware that oil and gas is currently critical to the global economy, and that we, as a society are still dependent, we believe that a transition is taking place where new and more renewable energy technologies will gain market share at an accelerated pace. The companies in our portfolio still use fossil fuel, but have low relative carbon emissions, which makes them better positioned to adapt to carbon regulation and to capitalize on new green technologies. The firms we invest in are committed to continuously lowering their carbon footprint, and have targets in place and the strong governance and leadership to make this happen. Adidas, the German footwear company has set significant targets to reduce its carbon emissions and water consumption year-over-year for many years. In addition to responding to climate change through tailored programs in its own operations and in the supply chain, the company addresses the impacts of climate change through various partnerships. One such initiative is their partnership with Parley for the Oceans where a line of Ultraboost shoes are made completely from recycled plastics retrieved from the oceans.