Investing For A Cleaner, Safer And Healthier World
From what you eat for lunch to where you buy your shoes, sustainability is creeping into everybody’s lives. People increasingly want what they wear, eat and drive not only to look, taste and feel good – they want it to have a positive impact on the world around them, too. In the food and clothing industries, for example, sustainability is becoming synonymous with quality.
It is not surprising, therefore, that there is also increasing interest in sustainable investment. Demand will only continue to grow as investors increasingly expect the companies they engage with to be socially responsible and care about how they make money as well as how much money they make.
Customers and investors’ expectations aren’t the only driving force behind businesses changing, from high street retailers to industrials and even commodity producers. The political climate continues to change. Environmental and social responsibility are now regarded as mainstream issues and policy is increasingly decided with sustainability in mind. This political will has a marked effect on regulation, which in turn affects the competitive landscape for businesses.
Basic financial sense is also pushing companies down the sustainable path: as regulation and legislation increasingly penalise polluters, those businesses creating less toxic waste, and those involved in reduction and efficiency technologies, should prosper.
There is also the growing realisation that investors do not need to sacrifice financial returns to meet their values. Indeed, there is a compelling case for all investors to take a sustainable approach – not only those who want their assets to ‘do good’.
In a fast-changing world, the Liontrust Sustainable Investment team believes the companies that will thrive are those that focus on improving people’s quality of life, be it through medical, technological or educational advances; driving efficiency in the use of increasingly scarce resources; or on building resilient, prosperous and stable societies.
The investment process starts with a thematic approach in identifying the key structural growth themes that will shape the global economy of the future. The team invests in three transformative trends and 20 themes within these which are related to the United Nation’s Sustainable Development Goals. The transformative trends are Better Resource Efficiency, Improved Health and Greater Safety and Resilience.
The team then invests in well-run companies whose products and operations capitalise on these transformative changes and, therefore, may benefit financially.
We believe identifying these powerful themes and investing in exposed companies can make for attractive and sustainable investments.
Do remember that the value of investments and the income generated from them can fall as well as rise and are not guaranteed. Therefore, you may not get back the amount originally invested and potentially risk total loss of capital. This video should not be construed as advice for investment in any fund or company mentioned and examples of stocks are provided for general information only to demonstrate our investment philosophy.
Liontrust Fund Partners LLP (2 Savoy Court, London WC2R 0EZ) is authorised and regulated in the UK by the Financial Conduct Authority (FRN 518165).