Thematic Thoughts
Real world sustainability linked changes and what they might mean for companies and investors
Investors must cope with uncertainty
One way that investors are different is that we deal with uncertainty. We cannot be sure what the future will bring, but as we invest we can prepare for possible future events. Companies betting on only one outcome, normally the status quo, can be risky. The steel industry is a good example of this.
Better homes are possible - don't just focus on quantity
The building industry faces two big sustainability challenges, greener building operation, and encouraging the use of greener construction materials. And within each challenge lies a massive opportunity. It's not all about quantity, we can also build better - utilising best practice.
Deforestation - an increasing risk for food companies
A lack of supply chain resilience is one of the most material investment risks faced by companies in food related industries. Within this deforestation is becoming more prominent. Put simply, if there is material deforestation taking place within a company's supply chain, the time to act is now.
Insurance - the 'hidden' risk for real assets
Adequate insurance is a crucial part of many financial investments, including homebuying. We take it for granted, until it's no longer available. The impact of climate change is prompting private insurers to exit some markets. But this is not inevitable - resilience investments can reduce the risks.
A new resurrection for coal - probably not
The data for 2024 electricity trends is out. And coal use has grown. Is this a permanent shift away from sustainability toward energy security, implying a new dawn for coal use? Probably not. Investors would be wise to exercise caution - coal mining is likely to remain a sector in terminal decline.
Electricity demand management, jargon and investor communication
We often use too much jargon, and as a result instead of informing investors, we just end up confusing them. This is not a good thing at a time when we want more money to come into sustainability solutions.
How firms adapt to climate change
Do we really think enough about how firms will adapt to climate change. At the risk of sounding defeatist, we are already heading for c. 3 C of global warming. We need companies to prepare = adaption.
Will Europe hit its EV targets, or do fines beckon? Who really knows?
Estimates of the fines the European automotive companies might need to pay for missing emissions targets vary massively. Understanding the company strategies is key, but for this we need better disclosure.
Wine, cognac, sustainability and financial risk
Grape growers face material climate change risk, in terms of temperature increases, water shortages and climate volatility. Companies are starting to disclose some information on their responses, but we need to dig deeper.
Food companies, sustainability and financial risk
Climate change is going to alter what can be grown where, and the yields that farmers can deliver. This is very likely to lead to higher prices. And yet current financial reporting by companies in the agricultural value chain doesn't really talk about this. This needs to change.
Stopping cows from burping.
Could gene editing could solve the cow methane problem? Although innovation sometimes over promises and under delivers, there are times when it's necessary. When the alternatives are unlikely to get delivered at the scale we need. And cow based methane looks like just such a case.
What the public believes about EV's matters, even if it's not true
Politicians are not brave people, they want to do something that a large minority, if not the majority, will support. Which is why what the public believes about Electric Vehicles' really matters. And why 40% saying that they don't think EV's are better for the environment is a worry.