Investment funds

Nine billion people and one place: Earth

Categoría: Investment funds
Tipo de contenido: Actualidad
Tiempo de lectura: minutos
Publicado: 28 Sep 2022

This is the number of people expected to inhabit the Earth thirty years from now. Increasingly populated cities that consume more food, more water and more energy than the rural population. A growth that directly influences the environment and that is synthesised in two words that resonate like a mantra: climate change.

Why invest in this trend?

The finite resources of the planet.
A larger population entails a greater demand for resources, which makes it unquestionable to seek solutions that improve energy efficiency, reduce food waste and offer alternatives to increasingly scarce resources. A real scenario that has intensified the debates on how to deal with climate change.
The global drive towards a more sustainable world.
The new regulations on emissions, plastic waste and food, the preferences in consumer demand and, most importantly, the improvement of the economy of costs will guarantee the growth of the action against climate change, even in spite of the tightening of the monetary policy of central banks.
The need to increase food productivity.
An opportunity for companies that manufacture chemical products and fertilisers, for machinery producers, new technologies applied to predictive weather analysis and precision agriculture are essential to increase crop yields around the world.
And the growth of the sector known by all: the renewable energy industry.
A sector that is going through a period of rapid growth thanks to favourable market conditions, technological advances, lower costs and social awareness. In 2020, despite the pandemic, renewable capacity installations increased by 45% compared to 2019.

Climate change is a pressing problem that is unquestionable and impossible to ignore. A problem with impacts on health, but also on the economy.

Investors and policy makers have begun to consider biodiversity risks alongside investment risks. Ensuring food safety, air quality and promoting water savings are objectives present in consumer brands. Quite a challenge in the face of a bleak panorama:

The atmospheric pollution.
Responsible for four million premature deaths registered each year. More than 80% of the population is exposed to air quality that exceeds the limits established by the WHO. A particularly serious problem in low- and middle-income countries.
Water scarcity.
29% of the world population does not have access to drinking water and reserves are constantly declining.
Rising temperatures and extreme weather events.
The report prior to the United Nations conference on climate change indicates that global warming will continue throughout the 21st century unless CO2 and other greenhouse gas emissions are reduced.
Plastic.
13 million tons (we repeat, 13) accumulate each year in the oceans, threatening the quality of food, human health and coastal tourism.

Millennials, the largest demographic group on the planet, are more self-aware and demanding in the face of inaction.

Source: Deloitte Global Millennial Survey 2019

Never before have environmental and social issues been so intertwined.

Climate change affects our society through changes in water, air, food, the ecosystem, livelihoods and also in new infrastructure models. From the USA to Europe, policies are undergoing a transformation towards a more sustainable economy.

A global institutional interest.
The EU has approved the Green Deal; The USA has once again become part of the Paris Agreements and has re-approved the Green Pact. Even China, always reticent on this issue, has announced an ecological shift in its policies.
“Zero emissions” objective.
While many areas of the economy have been focused on decarbonisation for decades, the fight against climate change requires expanding the scope of action and considering all sources of environmental pollution.

Sustainable investing: a worldwide trend confirmed by the numbers.

Sustainable funds.
According to the 2021 Morningstar report, the assets of sustainable funds amount to 11 billion euros.
Companies that are governed by environmental, social and corporate governance (ESG) criteria
The same report shows an increase in the financial flow to these companies, which rose from 126 billion in 2019 to 233 billion euros in 2020. An increase that is expected to continue thanks to global efforts to reduce polluting emissions.

The selection of companies focuses on activities that contribute to achieving environmental or social objectives, such as providing solutions to climate change, the energy transition or water scarcity.

Innovative companies providing solutions for climate change.
Producers of solar panels, wind turbines and electric vehicle technologies.
Companies producing scarce materials.
Especially those materials used in new and essential technologies such as batteries and smartphones.

What do the experts think?

From the European Union.
The presidency of the European Union aims to harness the economic power of the continent's digital and green transformation to boost jobs and growth. The renewable energy industry created 1.5 million jobs globally in 2017 and it is estimated that every euro spent on clean energy has a multiplier effect that translates into an additional €0.8 of GDP.
From the WHO.
The United Nations conference on climate change set 2030 as the deadline for abandoning the use of coal, ending deforestation and reducing methane emissions by 30%.

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Fund

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Fact sheet/Subscribe

LU0348926287

NORDEA 1 GLOBAL CLIMATE AND ENVIRONMENT FUND

4/7

EUR

View Investment policy

1000 €

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LU0306804302

SCHRODER GLOBAL CLIMATE CHANGE EQUITY

5/7

EUR