Sustainable investing: Revolution to evolution?
Julia Warrander and Russell Waite reply:
Recent weeks have brought enormous change, reminiscent of the quote from the former Soviet leader, Lenin: ‘There are decades where nothing happens, and there are weeks when decades happen.’
It would be unfair to say we are experiencing the upheaval associated with revolution, but we believe the impact on the behaviour and expectations of society – and the fabric of our economy – will be profound. The inevitable changes to our lifestyles, both at work and at home, may well have far-reaching implications. Sadly, some businesses will fail, whilst others will emerge stronger. This period of uncertainty will also result in a re-evaluation of how many investors choose to allocate their capital.
At Affinity, we believe sustainable investing will transition into the mainstream. Financial markets and consumers will increasingly reward companies who demonstrate they care about more than just profits and whose products and services respect planetary boundaries. Indeed, before this crisis, it appears a structural shift in investor preferences was under way. The world’s biggest investment management company, BlackRock, reported year-to-date net inflows into their sustainable tracker funds totalled US$14B, as of 24 March, more than half of 2019’s full-year figure.
We are uncertain as to how Covid-19 made the jump from animals to humans. However, the destruction of natural ecosystems and the associated threat to biodiversity are believed to have played an important part. Maintaining the delicate threshold between ourselves and nature will continue to be key in protecting society over the coming years; be that from future pandemics or the escalation in natural disasters driven by climate change. As we now know, Jersey will have
to develop strategies to deal with both of these physical crises.
The naturalist Charles Darwin, father of the theory of evolution, wrote: ‘It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.’ It is an imperative we think beyond the short term, and the roadmap provided by the UN Sustainable Development Goals enables us to do just that. Change has certainly arrived – now is the time to adapt.
