In the tribalistic world we live in today, it’s seen that something or someone is either ‘this or that, it/they can’t be both’. However, we all know life has plenty of “grey areas”. Let's take Crypto currencies for example, proponents argue the value of decoupling currency from central banks and putting power in the hands of people. Opponents would argue that it's ripe for corruption and the act of ‘mining’ itself has a negative environmental impact.
ESG stands for Environmental, Social and Governance. It’s a way of investing that considers the impact on both the climate and society, and the way companies are managed. When investing you’re putting your money in the hands of a company to fund their business. That might happen through a Fund Manager but ultimately,that's where it ends up. This is why ESG investing is so much more than just tackling climate change; don’t get me wrong, it’s a huge problem we all need to address, but there are other societal issues we also have to tackle; race and gender inequality, equal opportunities, poverty, clean water and sanitation, access to education, the list goes on (currently 17 in the UN’s Sustainable Development Goals). These challenges are where the Social and Governance side of ESG investing come in. The way businesses now play their part in society through Corporate Social Responsibility (CSR) programmes and the way they look after their employees, their supply chain and the make-up of the board has never been under more scrutiny from investors.
“Thanks for that, but what has this got to do with motorsport?” Well, it’s easy to think that motorsport and ESG just don’t mix, like oil and water, right?However, that's just not the case. Motorsport has always been a test bed for vehicle manufacturers, there is no harsher environment for a machine than being pushed to its limit’s hour after hour, race after race. In 2014, F1 went to hybrid engines and the first Formula E race was run. Without this move to ‘sustainability’,battery technology and therefore electric cars, wouldn’t be as advanced as they are today. Most of the safety in your road car comes from developments in motorsport; disc brakes, four-wheel drive, survival cells, the humble rear-view mirror. Motorsport has also been a power for social change. F1 and Formula E have both had huge social campaigns on equality (‘We Race as One’ &‘Positively Charged’). And so, when used in the right way and when working with the right people, investing in motorsport actually helps tackle climate change and brings benefits to society. This is where RedSeal Racing also plays its part.
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RedSeal Racing is a Not for Profit/Social Enterprise whose sole purpose is to “increase the diversity and accessibility of the Motorsport Industry”. We do this through providing a wide range of experience placements with our team using our strategic partnerships; Racing Pride and Sheffield Hallam University are two of our partners. For example, we offer Pit Crew experience to budding mechanics, joint marketing projects with Media Students, organize events with those on the logistics courses and we’re even branching into parts development and testing with the engineers. These placements are vital to giving people ‘real world’ experience that they can put on their CV’s and a pathway to achieving their ambitions regardless of who they are. The harsh reality is motorsport is expensive and we can’t give that much needed experience without funding so we rely on grants and corporate sponsorship from businesses with a strong CSR programme. Without this funding we may as well try mixing oil & water.
So next time you’re talking to Jon and Nigel about your financial plan and your associated investments, think about your views and beliefs, then ask if your investments meet your ESG goals.
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Patrick Seal is a Financial Services professional and co-founder of RedSeal Racing UK Ltd. If you’d like to know more about RedSeal Racing or even get involved,please visit their website www.redsealracing.com.