World News – GB – Sustainable Investment After Covid-19

Through the disruption of the Covid-19 pandemic in the economy and global markets in 2020, sustainable investment strategies and tools have performed similar or better than the traditional equations

This is a short time frame and an unprecedented case, so the relative performance should not be extrapolated directly over the long term, but investors with SI exposure within a diversified portfolio should be encouraged by recent short-term returns

We believe that the following trends have arisen or accelerate as a result of the Covid-19 pandemic and may affect the long-term landscape for sustainable investment

Corporate management issues such as human rights, employee welfare and community relations are subject to scrutiny, as issues that were considered luxuries in the past (such as flexible business models) have become important business continuity mechanisms in the event of an epidemic shutdown whose actions could have a lasting impact on their reputation and future relationships with Customers, suppliers and regulators

Sustainability is at the heart of many governments’ recovery plan, with plans to invest in large-scale renewables, clean transportation, sustainable food, and shortening and diversifying global supply chains, this will likely support continued investment in sustainable industries, even with setbacks. Short-term closures related and the need for urgent financing to be directed at citizens and basic industries such as healthcare

While we expect many of the long-term dynamics in sustainable investment to maintain their current focus, we are witnessing a structural change in focus on social issues with the possible exception of investment from a gender perspective over the past three years, social issues have played a minor role in environmental issues For many years since Covid-19 has focused the world’s attention on public health, any social changes that emerge, such as investment in healthcare or elderly care, will ultimately be reflected in new investment opportunities.

There are many important social issues, but we highlight health care, access to medicines, education, sustainable tourism and social ties as areas that we believe will rise in importance for investors in the wake of the pandemic, especially in the context of improving service provision to disadvantaged communities to have a positive impact. / p>

It has been widely reported that the carbon emissions for 2020 for countries and most companies will be reduced as a result of the economic shutdown. So far, we have witnessed the largest recorded decrease in global carbon emissions, as energy analysts now predict that global energy-related carbon dioxide emissions (two-thirds of global energy emissions) Global warming) will decrease by more than 5% This is more than four times what has decreased in previous financial crises There are also direct links between the environment and health crises, with preliminary WHO studies identifying links between rising air pollution and more severe cases of Covid-19.

The momentum of investors, companies and politics on environment-related issues was accelerating in early 2020, along with increased community action such as climate school strikes in particular, we believe renewable energy, sustainable transport, biodiversity and green bonds will be the focus in the wake of Covid -19

The low growth environment and low bond yield should drive international system philosophies and new issuances on a wider range of asset classes and instruments, diversification beyond the dominance of stocks and, more recently, and to a lesser extent, bonds

We see strong potential for structural changes in SI and innovation in SI compliant investment strategies in alternative asset classes however, the sustainability benefits of the new approaches must be paid attention to, to avoid ‘greenwashing’

Hedge funds, structured products, and other potential derivatives can provide sustainable investors with significant risk management capabilities using underlying securities that are relevant to their personal values ​​or to sustainable economic activities. It makes sense when used as diversification of the core SI portfolio, especially when the investor wants to remain a long-term owner. The term is for other sustainable assets but manages temporary risks related to market movements, currency, capital protection, tax efficiency, etc.

SI strategies are not a homogeneous set of investment strategies (our SI portfolio defines eight distinct, albeit not exclusive, classes of SI approaches and instruments) but, on the whole, the performance of ESGs, funds that themselves advertise as being ESG instruments Sustainable, Defined, and Very Flexible in the first quarter of 2020

Looking to the future, we still expect a diversified portfolio of global SI stocks and bonds to perform overall in line with traditional strategies. While the approach of ESG leaders and philanthropists will provide slightly more defensive properties, we believe that allocations to ESG topics, ESG Sharing Shares and high yield bonds will be a stone. The angle to growth opportunities and returns we also see benefits in staying focused on bonds with the highest credit quality: corporate bonds, environmental, social, and institutional governance, green bonds, and development bank bonds

Additionally, private market fund managers who have developed robust impact management frameworks from the start and have experience in engagement teams as being better placed to weather the crisis and prepare for growth and recovery

The crisis emphasizes the importance of environmental, social and institutional governance considerations for the company’s performance and investment returns, and we expect this to continue to affect the actions of companies and investors in the future

Robert Bruton is Senior Client Advisor at UBS Wealth Management in Jersey Robert was born in Jersey and has had a diverse and enjoyable career so far, having traveled widely and spent several years living and working in the Middle East before returning to the island more than before. Ten years to join UBS

Disclaimer: The value of the investment and the resulting income may decrease or increase (due to market and currency fluctuations) and may not restore the original amount invested Previous performance is not a reliable indicator of future results. Expectations or expectations are not a reliable indicator of future performance and may not be realized.

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Environmental and Social Management and Corporate Governance, Finance, Investor, Socially Responsible Investing, Investment Fund