The biggest investment opportunity of the decade

by Jan Amrit Poser, 02.04.2022
Humanity faces enormous challenges. The good news is that the global community has realised that these challenges need to be addressed swiftly. To put the world on a sustainable path, the United Nations have launched the Agenda 2030. Taxonomies are being worked on all over the world to redirect finance into promising technologies and solutions. This opens up enormous opportunities for investors.

Related SDGs

Humanity is facing major challenges

We are increasingly feeling the consequences of overpopulation, resource scarcity and climate change firsthand. Extreme weather, forest fires, geopolitical conflicts and refugee flows are increasingly reminding us that humanity must act.

A fundamental transformation of the global economy is needed, away from fossil fuels, monocultures and economic dependencies, towards a decentralised, circular, resource-saving and inclusive economy. All of this can be described by the word “sustainability.” A sustainable transformation of the global economy is required.

The global community lifts the 17 SDGs on the global political agenda

The global community has recognized this need for action. In 2015, it therefore launched the Agenda 2030. Within the subsequent 15 years, it has set its sights on achieving the 17 Sustainable Development Goals (SDGs) established by the UN. These 17 goals represent the reference framework for sustainable development set to address global challenges.

In the same year, the Paris Climate Agreement was also adopted, which 196 countries have now ratified. This has set the goal of limiting the global temperature increase since pre-industrial times to significantly below 2 degrees Celsius by 2050. However, according to the UN, financing these global goals alone will require 2.5 – 3.0 trillion US dollars annually. That is why regulators around the world are thrashing out green taxonomies. These taxonomies are classifications of economic activities into “green,” meaning promising, and “brown,” meaning harmful. The goal is to redirect finance to sustainable economic activities, thereby helping to finance the transformation of the global economy toward qualitative growth.

Incentives and regulations promote the sustainable transition of the global economy

To this end, since 2015, governments in all regions of the world have been working to draft legislation, create incentives, provide subsidies, and initiate regulations to encourage investment in sustainable activities. Civil society, as well as business associations, are increasingly promoting transparency in the reporting of environmental and social impacts. This involves looking at both the impact of the environment and society on companies, as well as the impact of companies on the environment and society. This increased transparency, not least, empowers consumers to fulfill their long-held desire to favor more sustainable products and penalize manufacturers of environmentally harmful products through self-guided decision-making.

Enormous opportunities for investors in the 2030 Agenda

In this environment, tremendous opportunities are opening up for investors. Economic activities that support the 17 UN Sustainable Development Goals should benefit from growing demand over the next decade. Those that harm them should be avoided and risk ending up as significant write-offs in portfolios. Investment trends that align with achieving the 17 goals should provide opportunities for investors, whether investing in renewable energy, the mobility transition, recycling solutions, providing drinking water, or empowering disadvantaged people through education, women’s empowerment, or pay equity. We believe that the 17 Sustainable Development Goals represent the investment opportunity of our time. At the same time, they are a source of mindful and purposeful investing that makes deeper sense to investors.

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