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Monday, March 27, 2017

Sustainable investing – Units of trust – Session 2

Posted by steve on June 1, 2006

PREAMBLE .
The background to these sessions is my interest in investing in sustainability. In earlier sessions I visited one place that has been successful using a system called Unit Trusts. These can be placed in organizations providing for a standard of living in a sustainable way.
Please read session one before proceeding if you have not yet read it. Click on the link in the title above or here.

By sustainable investment, I mean putting money into activities and organizations that create and operate infrastructure that produces living standard. After construction they should require very little input of fossil fuel.

Last time, I met the system and the scheme in an introduction exhibition stand and acquainted myself with the trust organization and the organizations it supported.

Questions raised from that include:
How is an organization that has something to offer supported by the Unit trust scheme?

THE QUEST: To revisit the place to find out more about how an organization with a sustainable concept can be supported by the fund.

TAPESCRIPT: On a bench in the departure lounge, I watch people dropping into the stand. A young man in a grey suit comes out and offers to tell me more.
I accept and follow him out of the waiting area up an escalator to their offices in a skyscraper similar to the LETS building in an earlier stream.

The lift takes us to the fourth floor.
He shows me into a rather ornate wood paneled conference room,
He offers me a mineral water.

I explain I have an organisation that fits their profile but I need the finance, could he tell me what the trust provides?

One main activity is the yearly marketing system, where they go out and raise money by selling units. This increases the total number of units. Directly after this activity they have a higher proportion of unplaced units.

Unplaced units create a demand for sustainable products and services. Every unit that is purchased removes demand from counter sustainable operations and
switches to sustainable investment.

The unit trust organizes these exhibitions and different kinds of activities which participating organizations get the right to use . That is, they can attend as exhibitors.

Interested organizations can sign up on the trust’s website.
Some rules:
You must be a registered company or cooperative.
Energy intensive organisations are not allowed.

He also explains you must make your own profile of what you are offering.
I see graphs with investment, maintenance costs etc. and professionally written descriptive texts.

So how do I learn all that?

“Maybe I should get your help.
” I ask
“Once you have placed with us. you can go on courses,“ he replies.
I feel anxious about understanding the point system too, which does not seem accessible.
“It is part of the course.“ he reassures me,

How can you start up with the same number of units you end up with? It is as if the money is used and not used. Or are there systems with points. 10,000 points or 1000 points?

(I feel agitated trying to get everything at the same time)
I calm down and ask;“Perhaps you could explain to me the benefits of joining the trust scheme.“
His reply contains two unarguable essentials.
1) Capital
2) Customers

The scheme plugs entrepreneurs into the system and it only requires one unit to get going.

Furthermore, if it does not work out I can move the unit over to the sustainable development section.

I remark.: “It seems like a good idea. I get my marketing done, get my customers and get my capital.“

“Exactly! You have to provide the activities and set the infrastructure and organization up. Along these lines.“

I just commit to a unit and at any time I can take it back.
About the prices of units; Nominal value is 10,000 Swedish crowns.

This can go up and down. depending on the economic climate in general.
But that is not to do with what you get from you investment. Everything is relative to units and points. Even if the value of units go down, they still generate the same services. This is essentially how the scheme decouples production of living standard from economic climate.
If you buy a house and house prices go up then you can get more for your house. then you have made money. If you sell your unit placed in housing when prices have fallen then you will get less for it. But through the rise and fall of the economy you get the same housing service.

“So how do you work the unit price out?”
“We make an aggregate that follows the consumer price index “

The cost of units goes up and down with the economy.*
“Can I buy more units? “ I ask.

More units give more exposure in more local areas.

One unit is enough to get a small organisation started.

I wonder: “Can a company earn points?“

“Yes if it does activities that earn points with other companies in the scheme. Otherwise they can’t.“

“It seems organizations can take this at different speeds. Once I have placed a unit with the trust I can go on courses and be developing for ever, can’t I?”

“That’s true.” Some things take time. Some things go fast. Business plans and stuff are required, you need to describe what you will do in terms of what your organization is going to give unit holders. Then you get a team of people who will help you create a sustainable business plan.

My question then is – what’s the best way to start so I can use the Trust’s services most effectively.
He explains. If you just got an idea, then you need to describe it in terms of contribution to sustainable development and use the same description methods they use. This is so people can understand what it is they are going to invest in.

He senses I am very wary of this sort of thing. I explain I lost some money in investments before.

He says I can let it take its own time, in small steps. He points out that 10,000 is a small investment risk.

I ask if I can get stuck in the scheme and then can’t get out of it.

“You already are.“ he says. You are always in a scheme. You need to choose which one. “We are giving you a chance to choose.“

I agree.

.I sigh “I need to do all that work – not so appealing.“
“Look. It’s fun once you get into it.“

I sort of feel uncomfortable and ask for the next step.

He suggests I attend an exhibition of the point system and go through the materials explaining how it all works.

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