Ecological crisis more dangerous than financial crisis
By Louise Fallon, Worldwise Investor
17 October 2011 | Thematic News | Comments (1)
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.
Fund context:George Latham is Head of SRI for Henderson Global Investors, their SRI funds take a thematic approach to investment, taking into account both social and environmental issues, such as those mentioned in this article.
Tags: Henderson |
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Louise Fallon starting working for Worldwise Investor as an intern over the summer and has written a number of articles during that time.
Louise is studying for a degree in Mathematics and Economics BSc at London School of Economics and Political Science, and graduates next summer.
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The soft closure of the two First State Funds does not mean they are completely closed to new...
The Multi-Asset approach seems to be a sensibel approach.
Our view is that multi-asset investing is a very different discipline to long-only equity (which is...
Has the same sort of definition slipping also happened to Jupiter Ecology? I hope not.
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