Looking back on an extraordinary year for the world, 2020 may very well be the year marked down in history as, ‘The Great Disruption.’
I recently had the great pleasure of attending a roundtable discussion, courtesy of Phoebe Stone at LGT Vestra, called ‘Climate change: how do we play our part?’ Phoebe is Head of Sustainable Investing at LGT Vestra and had invited, among others, the fantastic Paul Gilding to speak. Paul is a former CEO of Greenpeace and works as a business consultant advising some of the largest companies in the world on their climate impact and how to improve their processes to adapt to the climate emergency; companies such as Ford, Dupont, Diageo and BHP Billiton.
Back in 2012 Paul wrote powerfully of the need for a global market response to the climate crisis, to wage the One Degree War and embrace an ethic of sustainability in private and corporate finance. From his experience of consulting with some of the largest companies in the world he also had this lesson for us all: human innovation and the disruptive impact of new companies creating new technologies must be harnessed as the dominant economic mechanism for change.
This lesson has been driven home by the present pandemic, something Paul foresaw back in 2012. As Mark Carney himself has recently stated, in his role as UN special envoy for climate action, harnessing, ‘the greatest economic opportunity of our time,’ in a, ‘whole economy transition,’ is imperative at a time where systemic risk has become so very real for us all (https://www.greenhorizonsummit.com/event/a777a3fa-9c35-4901-a077-41d295a85990/websitePage:650f08ac-4ffe-4fdb-a107-0fc39e38d583).
Paul further analysed the present pandemic, describing it as a deeply sobering shock that has exposed the fragility of our markets to systemic risks such as climate change. But this threat is also an opportunity to respond positively and embrace the inevitable changes coming. This can be done through massive investment in the companies which are leading the charge in offering solutions to the challenges that face us.
But how do we, as individuals, play our part? The Investment Association’s 2020 Q3 update on the UK’s investment market shows that £7.1bn has flowed into responsible investments during 2020, raising total funds under management to £40bn within this investment space (https://www.theia.org/media/press-releases/record-ps71bn-flows-responsible-investment-funds-2020-so-far). This huge consumer-led reaction to the pandemic is also being supported by large institutional investors (such as Legal & General, Aviva and Blackrock) who are taking significant stands against companies that are failing to adapt and change. As Paul has so powerfully argued, the year of The Great Disruption is perhaps, at its heart, something hopeful.
We at Scott Fyffe Wealth Management Ltd. are proud to be involved in this economic transformation, gaining accreditation with the CFA institute to better support our new and existing clients in making the change to ethical investing. If you want to discuss the ethical investment market, and the opportunities and risks of this type of investing, we would be delighted to start a conversation with you.
No individual investment advice is given, not intended to be given, in this blog. If you are unsure whether any particular investment or course of action may be suitable for you, you are urged to obtain independent financial advice.
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