Investor Letters

Below you can find articles on the impact that climate change has on industries
and companies and how it all shapes our investment portfolio.

Falling Iguanas, Solar Coaster, and the Senator with the Snowball

In the latest update from Redwood Grove, we look at the alarming rise in global temperatures, the market’s short-term focus with renewable energy stocks experiencing a significant sell-off, and discuss the increasing attention on the economics of climate change and the importance of a long-term view.

February 1, 2024

The Rise of Custom Packaging and The Habitual Present Tense

Redwood Grove Capital explores the environmental impact of plastic packaging and the growing concern around waste. We highlight our investment in Westrock, a leading cardboard manufacturer, aligning with the global shift towards eco-friendly packaging solutions.

October 30, 2023

The Hottest Day on Earth and the Weather Roulette Wheel

Our latest update addresses the alarming reality of Earth’s hottest day on record, and the impact of extreme weather events. We discuss Generac as an opportunity to adapt to the growing challenges posed by climate change, while introducing NextEra Partners as a strategic addition to the portfolio for its focus on clean energy projects.

July 21, 2023

Redwood Grove’s Impact Report, Impact Resistant Windows and a New Logo

Redwood Grove publishes its first impact report to give our investors a more quantifiable and comparable way to understand how the portfolio performs from a climate perspective. We spotlight the strategic addition of PGT Innovations, a leading manufacturer of impact-resistant windows positioned for growth amid extreme weather.

April 26, 2023

The Anti-ESG Backlash

Redwood Grove addresses the rise of the “Anti-ESG” movement, and recent state legislatures aiming to restrict ESG and climate considerations in pension investments. We delve into the nuances between impact investing and ESG, and Redwood Grove’s unique approach to identifying climate-driven market inefficiencies.

January 23, 2023

Extreme Weather Is Not The “New” Normal

In this update, we discuss how climate change remains inaccurately priced into public equity markets, and why this mispricing represents a significant source of alpha. We look at the impact of extreme weather events, highlighting the disconnect between scientific research and market analysis, and the opportunity to integrate thoughtful fundamental and climate research.

October 25, 2022

Redwoods, Agriculture and Climate Change

Redwood Grove shares the origin story of our firm name and explores the impact of extreme weather on agriculture and companies like Lamb Weston, a major supplier of the American french fry. We explore investment opportunities in companies with sustainable and climate-resilient approaches, such as Gibraltar Industries and their focus on reducing agricultural greenhouses.

August 3, 2022

IPCC Sixth Assessment Report

Our latest letter discusses the recent Intergovernmental Panel on Climate Change (IPCC) report which emphasizes digitization and solar energy, aligning with Redwood Grove’s investment themes. We delve into recent regulatory challenges in the solar industry, examining tariffs and labor law issues, expressing confidence in the long-term prospects of utility-scale solar despite short-term concerns.

May 4, 2022

Redwood Grove’s Net Zero Portfolio

With approximately 40% of global greenhouse gas emissions stemming from publicly traded firms and the surge in corporate Net Zero commitments, Redwood Grove discusses how we separate the signal from the noise. As a member of the Net Zero Asset Managers Alliance, we divide companies across three categories—those aligned with Net Zero by 2050, those with emission reduction targets, and those lacking meaningful reduction goals. Our analysis process goes further with comprehensive company specific climate research that goes beyond mere pledges, providing a nuanced, holistic view of which companies are well positioned for a low carbon transition.

February 2, 2022

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