The comparisons with the environment are clear, George said: "If we think about the way that we live in ecological terms, and our ecological annual allowance is equated to our income, then we are living in debt in a much greater sense than we ever were in terms of the savings rate." He referred to the statistic that from a sustainability point of view we use up our annual entitlement by Earth Overshoot Day , which was 21st August in 2010 ( in 2011 - 27th September).
The investment funds that are using Environmental, Social and Governance (ESG) analysis to decide which companies to invest in are taking into account the risks that come from ignoring these issues. With many stakeholders such as NGOs, employees, the government and shareholders all demanding more action on these kinds of concerns, the businesses that are already taking them into account are likely to benefit, something that Thematic and Environmental funds on the Worldwise Fund Library are taking into account.
Although he admits "We don't know what the catalyst is going to be for the crystallization of this ecological debt into something that we really all take account of", a number of key factors were highlighted. These include water scarcity, increasing health issues, rising global temperatures and a growing population. These are all potential themes and sub themes covered in the Worldwise Investor fund library. He highlighted the accumulation of effects from multiple catalysts such as the Horizon oil spill, or the Fukushima disaster, which are all increasing awareness and pushing more investors into the sector.
George's presentation showed the increase in green and ethical investing, particularly in the European market. He commented that "Sustainability concerns have real impacts on the businesses that we invest in", and put emphasis on the fact that many of these investments are long term, and will benefit from large global changes.
Worldwise Investor makes the process of understanding and comparing different funds in this sector much easier, and investors and IFAs are encouraged to "dip their toe in", and include these funds in their investment profiles.
When I first looked at this article I noticed that Louise had inserted a comment about Earth Overshoot day in 2011 being on 27th September (cf 21st August in 2010). It seemed unlikely to me that it should have moved by as much as a month from 2010, and in the wrong (or right, depending on your view) direction.
It turns out that the methodology used to calculate Earth Overshoot Day has changed, explained in detail here: http://www.footprintnetwork.org/press/EODay_Media_Backgrounder_2011.pdf [PDF 114.84 KB] .
Using the new methodology, this would have put Earth Overshoot Day at 1st of October in 2010, so we are living further beyond our means this year than last.
By George Latham on Nov 07, 2011 at 11:16 AM