What do you think will be the biggest industries to have invested in within 10 years?
At the time of filming this video, we are in the middle of the 2nd wave for coronavirus Covid-19, areas and countries and moving into tier 2 and tier 3 lockdowns but we still have to think about where the growth will come from, where to invest and who will be the next ‘techno’ bubble stocks.
For the last 20 years it has been the ‘FAANG’ i.e. Facebook, Amazon, Apple, Netflix and Google (now Alphabet). What about the next 10 years?
Financial Technology? Artificial Intelligence? Driverless Vehicles? Space Travel? Home and Remote Servicing, Streaming everything, ESG Investing (Environmental, Socially responsible and Governance of the same).
ESG will be a growth area for investors.
The Paris Climate Change Agreement of 2015 set this in motion with a target to reduce global warming temperatures forecast to be in excess of 2 degrees higher than pre industrialisation to less than 1.5 degrees higher. This may not seen a lot but this is a huge task.
More recently, we have seen from the MiFID II (Markets in Financial Instruments Directive) that all businesses have ever increasing targets on environmentally friendly and socially responsible with governance now being forces on not just businesses themselves but also on investors, pensions and investment fund managers and larger, pension schemes to ensure that they have adequate ESG reporting and monitoring procedures in place. This came into force in October 2019 in the UK and from January 2021, all financial planners and smaller pension funds etc must also make ESG part of their investment planning discussions with investors. This is not a guide or a principle to follow, this is mandatory.
The UK Pensions Schemes Bill currently passing through Parliament has a requirement that larger pensions scheme by 2022 and smaller pension schemes by 2023 but consider climate change, environmental change and reporting requirements of the same.
ESG investing has a big future and will be a multi-billion dollar, pound, euro business by the end of the decade.