There are currently over seven billion people living in the world and this number is expected to increase by a further two billion by 2050. A growing population poses significant challenges to the environment, global resources, public spending and healthcare.
Therefore, I predict that impact investing, investment with sustainability at its core, will become increasingly vital to a range of businesses in different sectors throughout the UK, Asia, North America and beyond.
The benefits are primarily twofold: not only will it meet increasing demands, it will also be financially rewarding. So, if you thought that being an altruistic investor and generating healthy financial returns were mutually exclusive, you would be wrong.
The challenges posed by a growing population, as well as by climate change, impact particularly on the developing world. Whether these challenges relate to food production, energy, the environment or access to education and healthcare, it is our shared responsibility, based not least on enlightened self-interest, to ensure we look out for the global community.
Over the next ten years, investing in new technologies such as green technology, biotechnology and agricultural technology, will not only benefit us in the immediate term but for generations to come.
Though these technologies may not seem as glamorous as buying a classic car, for example, they are essential for safeguarding the future. At present, we are seeing significant strides being taken by China and India, in this space. Both are increasingly investing in technologies, including in Europe and North America that will help provide solutions to significant challenges of both the present and future.
China is spearheading the growth in electric vehicles and the Chinese company Geely acquired a nearly 10% stake in Daimler this February. Looking for a sustainable source of energy, Soochow University in China has pioneered a solar panel that can generate electricity from falling raindrops, thereby circumventing the issue of cloud cover that has impacted on solar energy technologies to date.
In the healthcare and biotech space, it is my assessment that diagnostic technology will develop to a point where we can identify such catastrophic diseases as cardiovascular, cancer, and diabetes at their earliest stages, within the next decade. Companies like DeepMind, which is within the Google family, are already making huge strides here. This has the potential to transform mortality rates, medical costs and demographics. With artificial intelligence increasingly being applied across industries and sectors, I expect to see tremendous growth in biotech. Robots will be able to run simulations and provide solutions concurrently – something that might have taken years for a scientist to complete.
Lastly, looking to the agricultural space, it is our duty to leave future generations with a legacy of innovations that can ensure that humanity is well provided for. This can be achieved through improved irrigation, fertilisers and farming, advances in plant breeding programmes as well as through gene therapy and modification.
Technology is helping to increase yields and drive down overall costs. The quality of water has been greatly improved through initiatives backed by impact investors, such as ‘AgTech’ trailblazers Omnivore Partners, who focus specifically on India. The availability of clean, safe drinking water is something that we all take for granted, yet this is still not the case for more than two billion people on earth, something that is estimated to cause more than half a million diarrhoeal deaths each year.
Impact investment is therefore vital – our population will continue to grow, so we need to think long-term before it is too late. Collectively, we have the power to effect real change – and change for the better.