Jupiter’s investment teams have looked at ESG (environmental, social and governance) issues within their investment process for a long time. Part of my agenda is to make sure that we inform our clients and our wider stakeholders better about how we think about ESG issues.
I believe that ESG is an analytical framework not a fund or security. It is a way of looking at the world that takes account of environmental, social and governance issues and tries to price them. We are thinking about them as investment risk and opportunity.
Another part of my agenda concerns Jupiter as a company. As a responsible business and a sustainability leader, we must continue to behave in the way that our stakeholders expect a responsible business to act. It is absolutely thinking about the triple bottom line: people, planet, profit.
There is a recognition in the industry that if we do not think about the consequences of what we are doing on the wellbeing of the planet and people then we are heading for mass extinction. We know the next decade is critical in terms of shifting the system to allow us to remain within safe boundaries of global warming.
The Global Financial Crisis brought a wave of new banking and capital regulations, and with the climate crisis, we have seen a great many regulatory and policy interventions There will be more because regulation only goes one way.
What will the industry look like in 10 years? Perhaps $2 or more of every $3 will be invested sustainably. The direction of travel is clear. In 2005, investing in onshore wind was pretty esoteric even though the technology was old — a wind turbine is a windmill. Onshore wind is now a mature technology, and it is cost competitive with fossil-fuel generation.
We see innovation in companies developing vertical farming and lab-based meat. We must feed the planet but do not have to use intensive agricultural practises. Investing in our oceans is important. For example, a company is building artificial reefs in Mexico to reverse coastal erosion and rehabilitate fish stocks, and also to protect the local economy and jobs in the tourism industry.
I do not see tension between planet, profit and people. I see natural alignment. If our clients, for whom we are investing, can’t enjoy the benefits of their retirement because of climate change or ecosystem degradation, we will have failed as investment professionals. We are working extremely hard to ensure that does not happen.
The value of active minds: independent thinking
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