A Grape Leap Towards Sustainability

A Grape leap towards sustainability

When you invest your hard-earned savings for the potential of high growth returns - you naturally would do due diligence on the underlying asset and your expected return on investment. But increasingly, importance has also been placed on value-based investment options that bring not only those high returns, but socially responsible investment returns.

Demand for sustainable investing means incorporating environmental, social and governance (ESG) factors into your everyday investment decisions. Seeking out sustainable investing opportunities means you can realize intrinsic returns not replicated elsewhere.

And, as the demand for alternative assets rises at an exponential rate where investors become increasingly frustrated with traditional asset classes, so too does the opportunity for greater integration of ESG in investment portfolios.

As we approach a point-of-no-return, the European Parliament predicts shipping emissions could grow by 50 to 250% by 2050. Without significant changes, billions of people will be more vulnerable to unprecedented heat, flooding, and environmental degradation. Simply put: we must act now. There are 8.7 million species in the world, but we are the only ones capable of being a steward and protecting it. 

We want to lead the way in making investing in fine wine more sustainable too. At Vinovest, sustainably investing in wine is not a preference, but a norm and key part of our brand.

And we’re not alone….the wine industry is adapting quickly and notable improvements that reflect this commitment to sustainable winemaking include reduction in winery waste water, reduction in vine protection products and the re-use of by-products. 

Environmentally responsible winemaking is being embraced wholeheartedly by the industry and today’s consumers and investors are rewarding these initiatives through their wine buying and investment choices. It is a powerful movement when individual decisions can bring about a socially responsible impact for the collective. 

Making Red and White wines more Green

For some wine growers sustainable practises is a top priority and organic or biodynamic wine production has certainly become more mainstream. Wine lovers may be interested to learn that according to a 2016 study, sustainable wines that used organic or biodynamic methods scored higher than conventional wines in quality by an average of four points (out of 100) when rated by experts at Wine Advocate, Wine Spectator and Wine Enthusiast.

Let’s look at Bordeaux - in 2014, 34% of wineries were certified organic or biodynamic. This has nearly doubled in the last six years which is impressive for a region with so many distinct appellations. Some of the more well known Cru classes that are organic, biodynamic or in conversion include Latour, Margaux, Palmer and Angelus. Château Guiraud (Premier Grand Cru classe Sauternes 1855) has pursued organic farming and permaculture for over 250 years.

By 2030, all Bordeaux winegrowers will have to be certified as part of an environmental approach that meets the Bordeaux AOC specification. Far from taking a back seat, the push for a sustainable future is clear as more and more producers recognize the environmental as well as the commercial advantages in sustainable production methods, so much so that the region is looking forward to having 100% of its wineries being part of a certified sustainable scheme by 2030. In Champagne, the region has been committed to sustainable winegrowing practises since 2001. It was the first wine-growing region in the world to conduct a carbon assessment back in 2003 and they are aspiring to achieve 100% sustainability in Champagne winegrowing by 2030. And this has not held back Champagne’s performance in the market - quite the opposite in fact: The Champagne 50 index is up 12.7% over the past 12 months and is enjoying its best one-year performance since 2017. In Q1 2021, Champagne trade by value was up nearly 60% over the same period in 2020. This is a great reflection of how sustainable wine growing and fine wine have been extremely complimentary.

The glass bottle also has warranted some consideration in the wine ecosystem, where even some wine critics are starting to weigh the bottles when they taste wines and record the weights of particularly heavy, or particularly light, bottles in order respectively to condemn or praise those producers who had chosen them. All this in recognition of the act that making and transporting glass bottles is a significant contribution to wine’s carbon footprint. One of the largest international supermarket chains launched their “lightest ever wine bottle”- weighing at just 300g vs the typical 900g bottle. 

It doesn’t stop there - even the humble wine seal has attracted some airtime on the topic of carbon footprint when an EY study found that a wine bottle sealed with a cork can have half the carbon footprint of a wine bottle sealed with a screw top.

“Climate Risk is Investment Risk” are famous words in the world of an institutional investor. But it wouldn’t be unimaginable to see whether in time we even see requirements for wine producers to disclose Co2 emissions/carbon footprint metrics on the wine label - the same way companies (such as in the UK) are required to state climate-related financial disclosures in their Annual Report.

What Vinovest are doing and how you can make an impact 

While the world needs to reach net zero, companies that can move faster towards that goal should. That is why Vinovest is taking a proactive approach to minimize carbon emissions. We have built the company on sustainable business practices for effective carbon reduction.