Lars Skovgaard Andersen highlights climate as a key area with great growth potential:
“Sustainability is much more than climate, but global warming and air pollution are, nevertheless, crucial issues. Air pollution in Beijing, for example, is so bad that it is the equivalent of smoking 40 cigarettes a day, and the Chinese are spending huge sums on the green transition of the transport sector, etc. Green energy, meanwhile, is a focus area around most of the world, and I expect that will remain the case for many years to come,” he says.
The US passed a symbolic milestone in 2019, when the country for the first time obtained more energy from renewables than from coal, though in the bigger picture this was just a modest step on the road towards the greening of the energy sector, according to Lars Skovgaard Andersen.
“In Europe, 85 per cent of electricity is expected to come from renewables by 2030, which is around double that of China and the US, but this still requires massive investment, which will benefit the best and most talented companies in the area,” he says.
How can investors promote a sustainable future?
”One possibility is to invest in so-called sustainable funds. These are also called article 9 funds and have the highest level of focus on sustainability. Sustainable funds invest in activities that contribute towards solving some of the challenges facing the planet. That may include investments that have a low climate impact or investments in activities that secure clean drinking water, reduce energy consumption, increase biodiversity, cut pollution or ensure greater social equality.”
Another option is to invest in companies that support sustainable development – for example, within themes like green energy, electric vehicles, clean water supplies and waste management. Typically, however, we recommend investing in these types of themes via equity funds, where your money is spread across a great many companies. This makes investors less vulnerable to negative developments in individual companies, plus it can be difficult to foresee exactly which companies will be the long-term winners,” says Lars Skovgaard Andersen.
This content is not investment advice - you should always speak to an advisor about how a possible investment matches your investment profile before making an investment.