If the only constant in life is change, the pace of change often seems to come in waves. This is particularly true in the field of sustainable solutions investing, where we head into a new decade anticipating an acceleration of the recent momentum that was at times absent from the last.
Consider the landmarks we see for 2020:
- The first major offshore wind projects outside of Europe and China will take shape in the US and Taiwan, highlighting accelerating growth of offshore wind as a global renewable energy source.
- Mass-market electric vehicles will for the first time roll off production lines on three continents, as automotive companies hasten development of alternatives to combustion engine cars.
- Groups of South East Asian nations will bring to a halt the imports of ‘waste from the West’, in some cases even sending it back. This will add even greater urgency to a global trend towards of developing ‘circular’ economies focussed on waste prevention and recycling.
Underpinned by a confluence of technological trends, regulatory pressures and public sentiment, these are examples of near-term milestones driving the long-term investment opportunity in just three of our seven sustainable solution themes – Clean Energy, Sustainable Mobility and the Circular Economy.
We have long argued that the increasingly pivotal role that sustainability issues play in global development generate multi-decade opportunities for our clients in finding companies that offer the solutions to associated long-term challenges. As we head into 2020, what has surprised us is the speed with which this is now playing out across our investment universe of sustainable solutions companies. As Lord Browne, the former CEO of BP observed recently of mounting pressure to decarbonise, “it’s as if the energy transition has collapsed in time”.
