John McHughan

[music] Hello I'm Greg Bonnell and welcome to MoneyTalk Live, brought to you by TD Direct Investing. every day I will be joined by guests from across TD many of whom you will only see here. We we'll take you through with moving the markets and answer your questions when investing. Coming up on today show, we will discuss what is slowing growth in energy security risks and what it could mean for the ESG investing space. And in today's WebBroker education segment, Caitlin Cormier will take us how you can make a ladder to bond investment on the platform. You can email us anytime@moneytalklive@td.com or fillet that you viewer response box under the web broker video player. Before we get to all that let's get you an update on the market action. Not a bad way to start the week. A pretty decent gain just shy of 400 points for the TSX Composite Index more than 2% to the upside. All the sectors are pushing into the green territory today. You have crude prices right now, American benchmark crude holding steady a little above 86 bucks a barrel. The price of gold is moving higher today as we see some easing and yields in the US. You have Barrick Gold right now of three to half percent, 20 bucks and $0.34. Some money on both sides of the border moving back and some of the big tech names, let's check in on Shopify here at home. Again of more than 5 1/2%. Let's check in on the S&P 500, that brought a read of the American market. We do have some upside momentum with 3680, almost 100 points. As we said, some money moving back into the tax base. NASDAQ, right now almost 350 points. More than 3 1/3%. A lot of the mega Names, let's check in on Amazon and see how it's doing. And that's your market update. Investing with environmental, social and governance concerns in mind has been growing as a trend but amid fears of slowing economic growth and risks to energy security will that momentum continue? Joining us more for now as John Mchughan, Climate Analyst at TD Asset Management. >> Thanks Greg. >> It's already interesting in times of turmoil. For consumers and companies, what does ESG investing look like in this environment? >> You are absolutely right, it's very challenging for the markets overall and for ESG, you know, this is the real kind of a first challenging market we've seen since it's become a part of the mainstream investment language. So, certainly with its challenges, folks are wondering how it will hold up over the course of the year. it's not just from an economic perspective right now. You are seeing simple it is H in. Energy security looming large in Europe… All of which is creating headwinds for the space. but I would say we are seeing some positive signs so far. If you look at interest in the space first of all, relative to normal funds or nonsustainable funds, ESG is actually continuing to see inflows through the course of the year globally. It is slowing with its inflows. It hasn't grown like it has in recent years which is to be expected. But where is the nonsustainable funds we have seen outflows starting to happen, particularly in the third quarter. So I think that that bodes well as a sign of interest in the space. But, everybody is interested in performance too. So what we see so far, within the US, when we look at a broad-based ESG, US index, it's actually outperforming the S&P by 5% this year. Down by 90%. This was as a Friday. Everything is new today. But as a Friday was only down 19%. Which is down 24. A similar story in Canada. So far not quite as much performance but it's going to remain relatively steady with the S&P TSX. So far, ESG has proved to be resilient in the face of this market downturn. We are not through yet though. So continuing to watch the space and see how investors feel about ESG. >> Now, the energy security component of all this, obviously ESG has grabbed onto that. It is interesting and we know that there are parts of the world, including Europe probably first and foremost, that are facing some pretty serious concerns. At the same time does ESG investing up to be the enemy of it energy security as some people framed it? >> No I don't think so and I think many of the space with nothing so as well. There are folks within ESG investing to think that, really pushing the climate agenda hard and anything that we increase in terms of global missions should be avoided. In our case, we view it from a couple of different lenses. The economic lens but also the human lens here. You know, folkscannot afford to heat their homes and we should think of from the human aspect. To last of the winter this year. From our perspective, it has certainly been a challenging few months in this regard. We are starting to see coal clients reopen which is the number one enemy of climate change. But anyway, politicians are doing what they need to do to keep their people heated and happy from a cold winter. From a Canadian perspective, unfortunately there is not a lot we can do to help out at this point. Europe is really in need of gas. Canada unfortunately right now doesn't have a good way to focus on natural gas. The only real way to do it is to ship it from Alberta down to the Gulf Coast and then a tanker over Europe. So it's not the most effective or cost-efficient route to get there. I'm sure you are aware of the LNG terminal that is being built up in BC which will come around for a few years and even then it is positioned to go to Asia and not Europe. So unfortunately there's not a lot we can do. The question for governments, companies and folks in Europe and Canada to wrestle with right now is "should we build that infrastructure now to get that natural gas to Europe?" Not really certain about when it will come online and if that demand will be there. Or should we look to clear forms of energy and getting those to Europe? So thanks what it's what you are starting to see. We saw the German Chancellor meet with Trudeau in Newfoundland and make a pact to export clean hydrogen from Canada's East Coast to Europe which will likely come online around 2025 if everything goes well. So we are starting to see that long-term forecast. It's going to be hopefully more positioned where it's renewable rather than continued use of fossil fuels. >> When I think about ESG and building in that direction, sometimes I simplify what the politicians are saying we need to do. And with the corporate is saying no governments can change of course. Perhaps before that if you are a minority government. But what seems to be right now? The corporate commitment to ESG or the political commitment? > That's a related question. I would say we are starting to see, it always goes hand-in-hand with the government that's in Canada. They have a very strong and ambitious climate agenda and because of that, the corporate commitments are following suit. You know, we recently have seen a potential On oil and gas emissions in Canada. And so, oil companies, energy companies are racing to sort of keep up with that. But at the same time, I can tell you from our engagements with energy companies, obviously a focus of a portion of ESG, there is a real focus and interest on deep harmonizing their businesses. They know that this is the trend the world is going in and in order to remain competitive, they have to lower the carbon intensity of the energy they are producing. So they can do that in a number of ways area but to be perfectly frank, I do think the commitment is there and we are seeing earnest attempts from large emitting companies to lower the carbon footprint. >> You did mention the fact that being the environmental component of the ESG, does it overshadow the rest? So many times we have these conversations ESG and sort of forget that the government has a part in it too. >> It's a good question. I would say E has absorbed the most attention from ESG. Probably because climate change is tangible. People can really see and feel the effects of it right now. So at the top of mind for everybody. But it's not to diminish the role of S and G. As we talk about entering a period of economic downturn, "G" is well-positioned, companies are well-positioned to do the best in economic downturn and make sure they have the strongest risk-management practices in place and be able to withstand potential downturns like this. So while E is important not to take with the importance of S and G and we see that a lot happening right now. > Fascinating stuff at the start of the program we will get back to your questions in just a moment. A reminder that you get in touch with any time by emailing MoneyTalkLive@td.com. Or you can fill up that of your response box on WebBroker. Now let's get you updated on the top stories of business and take a look at how the markets are trading. The earnings continue to roll in from the Wall Street banks. Today it's Bank of America which beat expectations as bond trading review came in stronger-than-expected. And aggressive central bank rate hikes also boosted net interest income at the bank. While those were areas of strength, Bank of America's investment banking unit posted a sharp decline in revenue, a theme playing out across Wall Street. Shares of Roblox are in the spotlight today. That is the children's online gaming platform reported a 23% annual jump in its daily active users in September. Roblox wasa pandemic winner as lockdowns kept children at home and in front of their screens. While the stock is higher today, it's well below its all-time highs. The British government is reversing nearly all the controversial tax proposals that rattled financial markets in recent weeks. Newly appointed Finance Minister Jeremy Hunt made the announcement today, saying the reversed cuts total some 32 billion pounds annually. It appears the market is welcoming the about-face with British bond yields following and the pound strengthening in the wake of the announcement. And now the TSX Composite Index up a little more than 2%. A big rally across all the sectors. Seeing some money move back into the tech space as well. Let's check in the S&P 500 holding onto its gains of the session. Up almost 3% of 103 points right now. Of course this has been a pretty choppy and volatile trading environment. Where we are tomorrow, we will see. You might be pleased to see the green on the screen. We are back now with John Mchughan taking your questions. How big an opportunity is the inflation reduction act for the SG space? >> It's a huge commitment from … The government put in a price range there that range from $60 a ton to $100 for direct air capture. Which is significant to say the least. Some American companies… I think probably the traditional energy companies are going to benefit the most from this. If we think about a company like Chevron which has set a target of capturing 25 million tons of carbon by 2030, and if you take the low end of the incentives, the tax credits by the government there, that could be a $1.5 billion tax credit for Chevron by 2030. At the same time, you see companies like Occidental Petroleum who are ready to invest $1 billion in direct air capture technology which would put them up on the higher end of the tax credit there. So, with carbon capture, it's a new technology. There is still a long way to go before we start seeing, I would say, significant improvement in the amount of carbon being captured by these energy company's. But the investments so far are encouraging and I would say incentives like what the government is recently put in is helping move it forward quicker than it would be. >> We are bouncing off we were talking about earlier of course. Governments put incentives in place and businesses will act on incentives. >> I would say the tone of the energy overall has been that we need these incentives. We want to D carbonized. We need these incentives to be able to make it economical for us to actually do it. And so, I know they are going out in their lobbying activity both in Canada and the US. They want to just security in the sense that we know it's not going to change. So they are advocating to the parties not in power right now. To not go and just reverse everything if they do come into power. > That was the American act but what about Canada? What's the situation here? >> Canada had the unfortunate time of being the first mover here. So they came out with credits in budget 2021 and updated to budget 2022. Which provides the focus on a 60% credit for purchasing and installing carbon capture equipment in Canada. So it's not for the continued operation. Which is where the US went. It's focused on the insulation. It is a less generous incentive on what the US has come out with. To say the least. I think the tone from Canadian energy companies now have the government is being "okay, we need to at least make ourselves competitive but the US. So" we actually just heard from the Canadian environment minister last week with week before that they were going to be reviewing the incentives and hoping to align them to make it competitive with industries or jurisdictions around the world. Mind you, that is potential. We may see it in budget 2023. But, there are incentives there and I don't think the fact that it is not quite as generous as the US is stopping the US and the skate case by Canadian companies. They made the commitments. It's just in terms of making it a bit more economically viable for them to invest in and ultimately capture the carbon. >> A conversation about carbon capture has our audience interested in how they can get involved. We mention some of the oil majors. What are some of the sectors you been looking at? >> Sure. The oil majors of the big one here. Unfortunately, there is not a huge opportunity to just purely invest in carbon capture like a standalone carbon capture company. There are few of them. But they are still relatively small. Where you are seeing it is primarily in the oil and gas base. These are companies well-capitalized, well incentivized now to reduce their emissions. So they are the ones putting all the money and carbon capture. Not just for capturing their own omissions but they see an opportunity to go out and help other industries capture their missions. So they have a lot of experience in the space in terms of the storage space and being able to store underground for long periods of time. So they are well-positioned there. There are other ways though, to get into it. I would say there are carbon capture equip in companies like Mitsubishi heavy industries of the main ones and they'd do help dominate the market. I did mention some standalone carbon capture companies like a Norwegian company called Acre carbon caption. There sort of the biggest in the standalone companies right now. >> Two things I wanted to touch on: a picks and shovels idea where you give the Canadian oil majors are embarking on the space and people who build the technology, that would be one thing. I think some people think about in terms of picks and shovels. "Do I want to be the guy mining for gold? Do I want have the pick? >> Certainly for the PIC provider,we are still in the early stages of carbon capture. It's still a very logistically challenging exercise for energy companies. You need to figure out how to capture the carbon, separate the two molecules, >> I wanted to ask you, is the technology mature? Or is this a new way were people can disrupt everyone in terms of how they thought they could go about carbon capture? >> I hope so. The golden goose right now is direct air capture which you may be familiar with. So that would be just sucking carbon directly from the air. You are not using it at a point source of omissions. So really, that's kind of the big one that a lot of folks are investing in. It still really early stages and nothing on a major scale that would really move the needle in terms of admissions. I think continued investment in that space, Occidental investing $1 billion, you are going to see improvements and innovation in the space, perhaps, you know, in an elaborate university somewhere they are working on being indeed required to make direct air capture feasible. >> Fascinating stuff as always. Make sure you do your own research before making any investment decisions. We will get back to your questions for John in just a moment's time. You can get in touch with us anytime just email MoneyTalkLive@td.com. And now the educational segment for the day. Blonde laddering is one strategy available to investors in WebBroker has tools which can help. Joining us is Caitlin Cormier, Client Education Instructor with TD Direct Investing. >> Bonds have not been as popular, more of a popular topic if you will with everything going on in the current economy. So, one of the strategies that you can use in the fixed income as an investor is blonde laddering. Blonde laddering has a couple of different features that make it a great tool if you're looking to build a portfolio. What it is is essentially a strategy repurchase bonds with maturities staggered over several months or more often over the years. Having a fixed income, blonde laddering strategy will help improve predictability of future income. Ensure adequate liquidity is maintained for the future. So making sure you have something all the time. Reduce your risk overall with a portfolio because you are well diversified over a bunch of different investments as opposed to just one. Also of course, offer diversification in this new stream of income over that period of time. > All right. Let's start with the tools that WebBroker has at her disposal. How do we create a bond ladder? >> Absolutely. So what we will do is what will happen to WebBroker and we will go under the "research" button and click on "fixed income". As you said, building a bond ladder means putting a few different bonds and putting them together in an investment maturity date as well as different types of bonds. So we have a couple of featured portfolios but we will quickly just run through how you can add a bond to a ladder. Kind of create your own. Let's go ahead and click on the "corporate bonds". Showing us a bunch of different type of fixed income products and we can add to a portfolio. A minute click on the 5 to 10 year corporate bonds. Then I can just, again, randomly choose in this case. We want to our research part of it today. But today, for illustrative purposes, we will go ahead and choose one of these bonds here. We see the maturity date is 2027. We will add, let's create a new portfolio. We will call it "October" we will click "add". So that will actually add this particular security that we just had their to this new portfolio that we've built. We can go back to the home button and choose another. Let's just choose a corporate Canadian corporate bond. Again, let's choose a maturity date different than the last ones. We are going to choose a shorter term here for 2025. Again we will choose October and "add to portfolio" and we have two different investments under that same portfolio. Now, again, just to make things a little similar I will go ahead and grab one of the previous ladders that we had created. So here's one that we have here. It has five different investments in it already. We have staggered maturity dates here, 2023, 2024, there are two and 2028 and one and 2031. So if you different investments there. We can see on the far right hand side the ratings. So we have a variety of different ratings for these particular bonds. From a credit perspective, we have a little bit of different variety there. What we actually want to do is create a report. So I will put in of hypothetical amount of investment for these. I'm just in a choose 10,000. What we're gonna do is we will actually create a report to see what this particular portfolio would look like if we were actually to move ahead and purchase it. So we will click "create ladder report". Perfect and one can see that just to make sure. So I will just's hope that you can see it okay, what we see here, this is report created as of today. We can see the quantity of investments, we can see the price. So all of these particular bonds are currently selling at a discount and you can see the total cost of us purchasing this portfolio as well as the yield maturity. Our annual yield, our term to maturity, how long before on average the portfolio will be mature that is. Our portfolio duration, telling us what the price in the portfolio change would be based on interest rates on the market and a total annual income all listed here. If we just go down to the next page, this is also a really cool feature of this report were we can see what those monthly incomes will be. So when we can expect to get money in each month from this portfolio as well as how much each month. You can see our diversification here. Showing us the provincial, municipal, Government of Canada and corporate bonds. So we are diversified there. Then we can see the maturity profile. So when money is due and how much is due in those time frames. Finally, the credit rating break down as we can see. We have all different credit readings or rather ratings for this particular bonds. Finally at snapshot at the bottom to show our total income annually, are maturity values, our market values, all that sort of stuff with one quick snapshot. If you are looking to build a bond portfolio, this is a great tool to see what the impact will be in having a portfolio and when your income can be expected and just give you that snapshot before you go ahead and click the "buy" button. >> Great stuff as always Caitlin. Thanks for that. > No problem. >> Caitlin Cormier, Client Education Instructor at TD Direct Investing. A reminder that October is investor education month. TD is offering free master classes to help you level up your IQ.and a reminder of how you can get in touch with us. Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box at the bottom screen right here on WebBroker just type your question and hit "send". We will see if one of our guests can get you the answer right here at MoneyTalk Live. We are back now with John Mchughan taking your questions about ESG investing. This one fresh off the platform. There seems to be a growing backlash against ESG… >> Everybody is well aware of the politicization of ESG recently. Personally as somebody is in the space, I'm a little frustrated by it. I think it's an over supplication of what ESG really is. Which to me is just kind of a modern form of risk management. It's something you can layer into traditional risk-management practices. But despite that, there are some, I would say, myths out there that ESG is just out to destroy the oil and gas sector and "here come the crusaders looking to eliminate fossil fuels". Which honestly could not be further from the truth. There are certain funds obviously the have exclusions of fossil fuels but by and large, I would say ESG's is there to work with and ensure these carbon intensive companies and fossil companies are managing their transition to a carbon economy well and understanding the risks that are there with this transition to their business. I would say by and large, our conversations companies are productive and they are all investing heavily in this space. We are seeing though, particularly in certain states within the US, a push back against ESG and ESG funds, the big one being this state of Texas, they just withdrew all their pension money from Black Rock. It was a modest Psalm, it didn't really move the needle from the seven or $8 trillion in Black Rock currently manages but it is a symbolic move that we will put this somewhere we feel is more friendly to the industries that are driving our state. Which is fair and it's their decision. But I would say at the same time that that is happening, you're seeing a real place from some other states to invest more in ESG funds and really try to capitalize on the outcomes and goals and potential impacts of certain ESG funds. So, it's a bit of a, there are two sides on this story and I think we are in one right now. We will see how it continues to emerge but we'll see. >> Interesting stuff. One of the best battery metals for EV vehicles? >> Well lithium is the popular one. It's required not just for EV's but for most batteries. Cobalt, aluminum, those are kind of the big minerals that are potentially seeing growth as a result of the push to electrify everything, as you say. I would say the challenge in that space right now, we've seen a ton of growth in those valuations already. Kind of the run-up of that happening last year. It's really plateaued. You haven't seen it fall like you have a lot of industries this year. So all those companies that are involved with lithium miners, there is not a ton around the world. We think of one American company in particular that is seen incredible growth in their stock prices over the last year. I think some of the gains that you have seen over the last year, their pricing in already the potential for growth in this sector. We might've already missed the pitch there unfortunately. We will continue to see how the electric vehicle market on holes over the next few years. There could be new opportunities arising. >> We were talking about the other question about how oil and gas doesn't pass some people's ESG screen. What about mining? maybe some people have problems with that. Is there an danger there that the mining company falls heavily under ESG scrutiny? >> Yes these minerals, typically with any mining in particular, some of these minerals that come from certain countries where governance and social issues might not receive the same priority as they do here in Canada, it is a challenge. We have seen human rights issues emerge and, mining itself is not the cleanest activity. So that generates omissions. So it is something that we are focused on as well in the transition to electric vehicles and electric everything, as you say. Something that I think investors need to be watching closely. The companies that are, you know the end consumers of those like Tesla and Ford and those companies that are building the electric vehicles, we engage with them. We are trying to understand how are they paying attention to those risks and their supply chain? You know, by and large, they have kind of robust supply chain programs in place. The risks are still there. They don't get totally eliminated by these programs but certainly something to pay close attention to. >> Fascinating stuff. Let's get to another question about extreme weather. We seem to be getting more volatile weather like hurricanes recently. How is that impacting the electrical grid? >> A lot. You probably remember last year the snowstorm in Texas that took the grade out for like, four or five days. There is a being some deaths. People trying to keep their homes with fires inside. It just wasn't a nice event it is a risk and for those utility companies, it's really twofold. The physical risk to their assets, resuscitating repairs down the road as a result of these that the cost, it's an expense for the company. Being able to provide and continue to provide electricity that people need so badly in those extreme events. One of the priorities for us, as we go into her conversations with utility companies is understanding that they are hard in their assets and preparing for extreme weather events like this. Now we are seeing, in the US, winterizing of natural gas lines. Something that may be people did not think was required a few years ago. But since we've gone through this before, it is imperative. At the local level, you are seeing some bearing of electrical lines, things like that that will ensure continued safe flow of electrons to the homes when they need them during difficult times. >> Okay we will get back to your questions for John Mchughan on ESG and just moments time. A reminder to make your own decisions and do your own research before making investment decisions. A reminder how you get in touch with us. Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box at the bottom screen right here on WebBroker just type your question and hit "send". We will see if one of our guests can get you the answer right here at MoneyTalk Live. Canadian e-commerce companies are set to begin reporting their September quarterly results in late October. Anthony Okolie is here to discuss more. >> Despite what we've seen recently, TD Securities expects the names in the coverage universe to print solid Q3 earnings. They point to things like consumer spending which has remained solid in recent months. According to the U.S. Census Bureau. As well as monthly credit cards spending activity. I brought along a charred the details the latest in US retail sales. As you can see, US retail sales roles just over 7% year-over-year in the past three months. That's quicker than the nearly 6% increase in the prior three months. Now, healthy spending recently has been driven by food and drinking places. Travel and leisure. As well as in person shopping. TD Securities is cautious on sustainability of consumer spending in the near term. They believe that the continued strain in spending reflects positively on the coverage universe. Meanwhile, e-commerce spending is improving modestly according to TD Securities. In this next chart, you can see that more than 60% year-over-year in July, 12% year-over-year in August, that's an improvement over the prior quarter's year-over-year growth. However, sales are down from the peak levels reached in 2020. Certainly the head of the pandemic, 2021 as well. But inflation still remains elevated. While interest rates continue to rise an economic and certainties have persisted, this cloudy macroeconomic backdrop has driven tech valuations to stay volatile in recent months. So TD Securities has updated their target price on their coverage universe. TD Securities is reducing the target prices on the names in their e-commerce coverage universe given these macro uncertainties in these headwinds. In some cases e-commerce is growing spending is growing in a more normalized pace indicating that modern online activity may be modest going forward. Greg? >> Always a risk and everything what is TD Securities saying on that plan? > They point to a couple of risks. They point to technology risks including operational and cybersecurity risks. They also point to the fact that we could see potentially sector wide shares and multiple contraction. They also point to competitive among the products and come complacent technologies that are emerging more and more. They also point to foreign exchange with the strength of the US dollar against. >> Thank you so much Anthony. >> My pleasure. >> MoneyTalk Live's Anthony Okolie. Now let's look at the markets. A little high at the beginning of the show. 2%, pretty much strength across a lot of the names only a few names to the downside. Let's check in on Cameco. The mining space. Uranium… Up almost 6%. Anthony just talked about some of the e-commerce : Shopify making some gains, LightSpeed making some gains up almost 10%, up 2576. South of the border, check in the S&P 500 after the very choppy ride around last week. Still choppy I guess, but to the upside. 3681, up almost 100 points, 2 3/4 of percent. The tech name is getting a bit on both sides. The NASDAQ heavily weighed in on the tech names. Nvidia has had some wild swings, up almost 6% 218 bucks and change. Let's pick get back to your questions for John Mchughan. What about the nuclear renaissance if anyone was curious… We seem to be getting more. Is it here to stay? > It's a good question. Lovely to see Cameco doing so well today. I would say there is certainly a lot of wins for the nuclear industry recently. I'm not ready to declare it back yet. But, what we've seen so far or in the news recently, particularly in Europe, you're seeing some extensions in nuclear power plants which is positive, in my perspective. Nuclear provides an extremely powerful in missions free, baseload amount of energy for the electrical grid. From my perspective, it should be getting prioritized. There are questions around safety. A lot of questions around the time it takes to build a nuclear plant but despite all that we saw them build nuclear energy which means it's eligible in Europe now to be included as part of green bond frameworks. Certainly a positive for the industry. We saw some similar move in South Korea just last week. Here in North America, we are starting to see some positive investments in the space as well. Cameco and… Just went in and bought Westinghouse last week, a big American producer of nuclear power plants and power technology. So there is definitely interest in this space, a lot of progress. But you still see a lot of hesitation and pushback from certain folks. >> You talked about the fact that it's expensive to build new reactors. What about the current infrastructure, clear and close to home… When it was in the news saying they would extend this life and it came on Monday saying that was the year I was born. I don't feel that old but it sounds like the infrastructure might be getting on. >> I mean 50 years is a long time to be operating a nuclear reactor. But, what happens with these reactors is that you go through these long refurbishments. It takes having to go off-line for several years and they are basically getting almost entirely new infrastructure in place to be able to continue running which is what's going to happen with Pickering as well. They are extending the life there. It is possible but we would also like to see, instead of just continued refurbishing, we would like to see some investments in new reactors here in Canada. I would say there has been a push for investments in small modular reactors which is essentially a much smaller, almost mobile nuclear reactor unit. It is still a relatively new technology. We are seeing some investment here in Canada. Ontario Power generation in particular is looking at it. We are also seeing oil and gas companies investigating the technology to potentially use at their really remote locations where it's difficult to get wind and solar or electrical grids all the way out there. This is a good way to get a missions free energy there. >> Before we run out of time, we want to get one question. We know this question comes in quite regularly. How big of a problem is "brown spinning" when listed companies with dirty assets? >> It's a problem in the initiative you're paying close attention to now. A lot of investors have recently become aware of this as an issue. For a long time, we are looking at the chart of company greenhouse gas emissions and seeing them reduce over time. Excellent progress and then you learn about how they did it and they spin off some dirty assets to a private equity company and actually prolong the life of those assets in the net benefit for climate changes, there is no net benefit. It's actually worsening. So it's an issue. I think there were some studies that show in the US between 2017 and 2021, the majority of divestments from large energy companies went to companies without any sort of net zero or climate commitment which is unfortunate. Something we brought up in our engagements with energy companies in the past, there are ways that we have seen done before where it can either be built into a contract that a company has to maintain a certain climate standard when continuing to operate an asset. So again, it's something that we are paying close attention to now. We don't want to have the companies just be spinning things off to improve the look of their greenwashing or brown spinning, however we want to frame it. We also understand that divestments in M&A are part of any company strategies so we have to, there are a couple of different factors at play here that we have to look at as investors. And we are certainly pushing for companies to be avoiding any more ground spinning right now. >> Fascinating space John really pleasure to have you here. Great conversation. > Thanks for having me. >>. Thanks to John Mchughan, Climate Analyst at TD Asset Management. Stay tuned coming up tomorrow, Hafiz Noordin, Portfolio Manager at TD Asset Management take your questions. You can get in touch with us anytime to email your questions early by emailing moneytalklive@td.com. That's all the time we have for today thanks for joining we will see you tomorrow. [music]