The warning that, “Past performance is no guide to future results”, which appears under every investment advert in the UK, has never been more true. Our rapidly transforming world faces a perfect storm of rising demand for food, energy, living space and water, while also dealing with climate change - and these forces mean investors cannot rely on a rear-view mirror to invest their money.[caption id="attachment_2224" align="aligncenter" width="492"] Shanghai apartments: Global population is heading towards nine billion by 2050 with most people aspiring to a high-consumption lifestyle.[/caption] Sustainable investment is investment that considers the long-term risks and opportunities that our changing planet presents. As Seb Beloe of prominent sustainable investment firm WHEB Asset Management describes:
“Fundamentally, sustainable investment is about investment in companies that are providing solutions to the world’s critical social and environmental challenges. Ultimately we want to invest in companies that enable and benefit from a transition to more sustainable development.”With the global population accelerating towards nine billion by 2050, and with most people aspiring to a high-consumption lifestyle, it is widely accepted that our current pattern of resource use cannot continue indefinitely. The International Energy Authority expects global demand for energy to increase by 50% over the next 17 years, while demand for steel is expected to rise 80% in a similar timeframe. According to McKinsey, we have already seen a 147% increase in commodity prices since 2000. Although technological innovation may help accommodate some of these growing demands, it is almost inevitable that these changes will have major economic, social and environmental impacts. That affects how companies do business.