The world ground to a halt last spring and overnight the social component of environmental, social and governance (ESG) frameworks took centre stage. On the surface, COVID-19 presented itself as a health issue, but very quickly the pandemic escalated into a crisis impacting all of the UN Sustainable Development Goals (SDGs). An initial narrow focus by investors on the social consequences of the pandemic has shifted to a more holistic perspective and a recognition that it affects all of the SDGs.
Covering 71% of the planet’s surface, oceans are the source of protein for more than 3bn people globally. They provide 350m jobs in fishing, shipping, energy and coastal tourism, and currents, such as the now weakening Gulf Stream system, act as a climate regulator by redistributing heat. With assets valued at $24trn (€20.2trn) in 2015 and producing goods and services worth over $2.5trn per annum, why has the ‘blue’ economy not captured the responsible-investor zeitgeist in the same way as the climate?
Infectious diseases only just made it into the 2020 World Economic Forum’s risk impact list, yet the World Bank estimates that the pandemic caused global output to fall by 4.3% last year. So, when markets melted last March, did the $3trn (€2.5trn) hedge fund industry deliver?
Blue Sky Thinking
“Fortune is arranging matters for us better than we could have shaped our desires ourselves” – Miguel de Cervantes, Don Quixote
The Great Lockdown's silver lining has been a drop in air pollution and an increase in the quality of water. But as urban birdsong starts to be drowned out by the return of cars and planes, can we really ‘afford’ to go back to normal? The political debate, at least in the US and UK, appears to be a stark choice between the economy and our collective health. Is this right?
SDG 16.5, covering bribery and corruption, is central to other SDGs but hard to tackle in practice
The annual costs of corruption amount to $3.6trn in the form of bribes and stolen money, according to United Nations secretary-general António Guterres, speaking on International Anti-Corruption Day last year. Put into context, $3.6trn was more than 4% of global GDP at the time. That sum is greater than the $2.5trn estimated by UNCTAD that is needed to close the SDG financing gap to achieve the Global Goals by 2030. Corruption manifests in ways that touch most of the SDGs, so what can be done?
Robust and credible reporting standards will be essential to avoid any suspicion of impact washing
Even before a group led by The Rockefeller Foundation coined the term ‘impact investing’ in 2007, some firms had already started using private equity, venture capital and private debt strategies to generate attractive financial returns and social or environmental impact. This is hardly surprising, as the degree of governance control allows venture/private equity strategies to be aligned with impact more readily. But as brand name private equity firms enter, how can impact integrity be ensured?
How are asset owners looking to scale up impact as their portfolios and experience grow?
Resilience is the noun of our times. Not just from a human perspective, but also economically. When a ‘new normal’ arrives, could COVID-19 bring an element of humanity into investing? Some believe impact investing is one mechanism for building returns-driven resilient portfolios. So far, more than $500bn of the $13trn invested within some kind of responsible investment framework is in impact investments, according to the Global Impact Investing Network.
A decade since the financial crisis empowered managed accounts as the institutional go-to structure for transparency, liquidity and control of hedge fund strategies, assets on dedicated platforms continue to grow, driven by convergence, customisation, emerging managers, and soon, socially conscious investing. The ability to parse big data is key if service-driven and allocator platforms want to enable investors to enhance ‘alpha’ operationally and structurally.
Rubbish or Resource?
“Plastic is indeed now on the menu” – Prince of Wales
Imagine an island three times the size of France in the Pacific. Idyllic, right? Hardly. This 1.6 million square kilometre floating mass is made of more than 1.8 trillion pieces of rubbish. Add to this that by 2050 there will be more plastic than fish in the sea and the futures looks bleak. Yet, plastics is now in the throes of a revolution. How can both people and the planet profit from plastic?
“We are facing a man-made disaster of global scale…Time is running out” Sir David Attenborough
Despite the Doomsday Clock hand remaining at two minutes to midnight for 2019, the imminent threats to humanity and the planet continue as world security enters a period of ‘new abnormal’. Three of the top five risks by likelihood (and four by impact) in the 2019 Global Risk Perception Survey are environmental.
On the friendly Hawai’ian isle of Molokai, Niki Natarajan reviews Advivum Journeys’ transformational retreat where through hula, candid portraits and life coaching, her Re-Imagined Self is ready to rock the second act on a women-only retreat.
Formal review of a life coaching retreat in Hawaii. An Advivum journey is a self-discovery process that reconnects you to your authentic self, re-igniting passion and purpose so that you return from the seven-night retreat with the glow of inner wisdom that will guide you towards life’s next stage.
Economics of Happiness
“The greatest wealth is health” – Virgil
Two thousand years ago, Virgil made a very good point. Today, wellness—the quality or state of being healthy—is a significant creator of wealth. Funded by the stressed-out city-living executive and the youth-seeking ‘Silver Tsunami’, the wellness economy is now converging with the global health care industry and growing at 6.4%, per annum, faster than the global economy.
Interviewing veteran hedge fund investor Jeffrey Tarrant on the future of asset management, Bitcoin, Blockchain and Cryptocurrencies.
Impact of Insta Travel
“Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts” ― Mark Twain
Snap, crop, filter, geo-tag, share. Repeat. At more than 300 million Instagram posts, #travel is today’s postcard. It is hardly surprising therefore that millennials—the digital natives who prioritise experiences over material possessions—pick their travel destination according to ‘Instagram-ability’.