ImpactAlpha, July 14 – San Francisco and London-based Generation Investment Management, the $36 billion investment firm founded by Al Gore and David Blood, has for five years previewed the “sustainability revolution” in its annual trends report.
“This year the penny dropped,” says Generation’s Lila Preston, as the confluence of crises thrust long-term sustainability trends into the consciousness of consumers and onto the agenda of policymakers.
This year’s report charts the capital allocations and commitments, falling cost curves and technological innovation, and customer demand and social awareness driving the shift. Pick your metric: The report notes a “step-change” over the last five years in flows in sustainable finance, including the 10-fold increase in flows to ESG funds in Europe and the tripling (from 2% to 6%) of the share of market capitalization companies focused on the green economy now command among global listed equities.
“There is a recognition from a lot of different angles that sustainability is an imperative for our economic systems,” Preston says.
The accelerated adoption of alternative proteins, electric mobility, sustainable building materials and other trends long tracked by Generation “are doing what we would have thought they would do,” says Preston. Now on the radar: the impact of net-zero commitments on mineral prices, the boom in telehealth and mRNA interventions for diseases from cancer to rabies.
To be sure, costs and benefits remain wildly unequal, and negative trends may yet overwhelm positive ones. COVID-19 stimulus spending, for example, averaged more than $8,500 per person in rich countries, compared to $25 per person in poor countries. Nature loss threatens more than half of the world’s GDP, or $44 trillion in economic value.
ImpactAlpha dug through the 200 sources in this year’s report to pick two dozen trends shaping the sustainability revolution.