Whether you are a drawer or an investor, you need to consider the impact of climate change on your portfolio


Whether you are a drawer or an investor, you need to consider the impact of climate change on your portfolio. Climate change and scarce resources are in fact redefining the future. The world is constantly evolving and many of the transformations that affect it can have repercussions on the investment sector. Some changes are temporary and temporary, while others can be powerful and disruptive, capable of changing society as we know it today. Climate change and scarcity of resources are certainly among them.

There FAO, the United Nations Food and Agriculture Organization, said a very important thing in 2016. “The world faces an unprecedented double challenge: defeating hunger and poverty and stabilizing the climate before it is too much late.” Earth, understood as a planet, is the crucial node. There are no others, there is no “planet B”. CO2 emissions increased by 1.7% in 2018, reaching a peak since 2013, and intensifying the effects of climate change. And the years between 2015 and 2108 were the hottest years ever, ever.

Melting ice has helped raise the average ocean level by 7 cm over the past 25 years.

Furthermore, extreme climatic events (drought, fires, storms) have doubled since 1980. Floods and other hydrological phenomena have even quadrupled. And, again, the rising heat and the higher humidity rate have led to an increase in the spread of infectious diseases. It is not meant to be a war report: it is only the crude reality. A reality that you have under your eyes every day.

The effects of extreme climatic variations have caused massive property damage, and materially penalized economic production. In 2018, $ 156 billion of insured damage was caused by natural disasters worldwide.

Over the next decade, this figure is expected to double.

Then there are 7.7 billion people on the planet. All mouths to feed. Climate change contributes substantially to creating many problems for farmers. Think only of glaciers, where 3/4 of the world’s fresh water is stored. Their dissolution also decreases fresh water supplies worldwide, including those available for food production. Don’t believe it?

Do you know how much water it takes per day to produce the calories we eat? From 2000 to 5000 liters. The source is always FAO. And we can also talk about the increase in pests that, not coincidentally, are more comfortable with rising temperatures. 2 ° C more than pre-industrial levels could lead to an increase in insects which would reduce the cultivation of wheat by 46%, rice by 19% and corn by 31%. This is why, whether you are a drawer or an investor, you must take into account the impact of climate change on your portfolio.

Whether you are a drawer or an investor, you need to consider the impact of climate change on your portfolio

Still remaining in the food sector, there is a great disconnect between supply and demand. At the first level, there are less and less agricultural workers, and a large waste of food produced (equal to 30%). At the second level, there is an increasing population and high calorie food regimes in all developed countries. In 2050 we will be 10 billion, don’t forget it. And the increase in mouths to feed will not be in rich countries. But you have to think positive, always. The company is working to slow climate change, not to increase it.

And to produce more with less resources. And, in all of this, a drawer is emerging for you, drawers or investors myriad of investment opportunities. The sectors? Renewable energies. Electric and fuel cell (hydrogen) vehicles. Robotic agricultural machinery. Products made with recycled materials. Precision agriculture (which will grow by 13% per year at least until 2025).

Climate change and the scarcity of resources will guide the actions of consumers, companies and governments in the coming years.

If these trends are taken into account, investors will be able to find long-term opportunities. This is a real one megatrendor a powerful and disruptive force capable of affecting the global economy, companies and society. Investing in the sectors mentioned above allows you to invest in companies characterized by structurally higher earnings growth. In the long run, these equities should be able to generate more solid returns. Products?

1) iShares Electric Vehicles and Driving Technology UCITS ETF

2) iShares Global Water UCITS ETF

3) iShares Automation & Robotics UCITS ETF

4) IQ Global Agribusiness Small Cap ETF

5) Defiance Next Gen Food and Agriculture ETF

6) iShares Global Clean Energy ETF

7) VanEck Vectors Low Carbon Energy ETF

8) BNP Paribas Easy ECPI Circular Economy Leaders UCITS ETF.

For those who, drawer or investor, feel touched by the themes exposed in this article, these ETFs allow a responsible and innovative exposure.

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