Despite all the historic evidence showing a rapid pace of change in technology and societies, when it comes to investment, the dominant thinking is that things will stay as they are forever. Thus tobacco companies command valuations implying they will exist forever; oil companies trade as if fossil fuels will continue to provide four-fifths of our primary energy for centuries; and banks will act as if irresponsible behaviour is a fact of life.
Apparently this misplaced belief in the permanence of the present is hard-wired into human thinking, from an investment perspective anyway. But it is a trait that is unhelpful when trying to decide which companies will be tomorrow's winners. This is why we have developed our four themed approach to highlight long-term growth trends within our economies as they become more sustainable – that is delivering a better quality of life from less resources. In the past this has guided us to invest ahead of the market into areas such as LED lighting, renewable technology, pollution control and innovative medical technologies and steered us away from companies that do more harm than good in society.
In this newsletter we highlight a few more future trends: on page 2 – how banks need to adapt if they are to provide the essential financial services we require; on page 3 – how fossil fuels enjoy (for the time being) subsidies that dwarf those of the renewable energy industry; and on page 6 – how we will move around more efficiently on our bicycles and safely in our cars (page 9).
In 2025, our economy will be very different and many of today's dominant companies will have been replaced by companies exploiting new knowledge, and providing services which improve quality of life, while using far less natural resources. Their success will look obvious with hindsight. The Sustainable Future approach is to identify these future success stories today, rather than waiting a decade!
Finally, we regularly promote our Sustainable Future funds to the Independent Financial Adviser (IFA) market and we were delighted to win the Business Green Marketing Campaign of the Year Award. It was one of the most competitive categories and we emerged victorious as the judges were impressed by the campaign's multi-platform approach, and the high approval rates we secured amongst IFAs. It is always encouraging to be recognised for the work we are doing to raise awareness in this exciting but sometimes challenging space.
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