Supertrends: Investment themes to build back better
Credit Suisse has developed six long-term investment themes known as the Supertrends. These important multi-year trends help investors identify fast-growing business opportunities at an early stage and help them grow their capital over the long term.
Why investing with purpose makes sense
This year, we show how each Supertrend relates to specific UN Sustainable Development Goals, in an effort to guide investment decisions that can make a positive social impact.
In the wake of the coronavirus pandemic, the notion of "building back better" has gained significant traction. Making a positive social impact is important to more and more investors. Aligning investments with the UN Sustainable Development Goals can help investors decide how to direct their capital in an effort to make the world better. By prioritizing their investments according to their personal values and purpose, investors can combine social and environmental goals as well as financial returns.
Around the world, the COVID-19 pandemic has heightened people's awareness of inequalities. Key concerns include limited access to affordable housing, healthcare and education as well as rapidly changing work environments and old-age funding. This shift supports companies that provide innovative ideas and new technologies to lower the cost to cover basic needs and companies that have strong human capital management.
Sustainable and resilient infrastructure plays a key role in economic development. Overhauling vital transport, power and telecom systems can help countries recover from the pandemic-induced recessions and reduce the risks related to extreme weather events. Demand for sustainable infrastructure should support construction and infrastructure operator companies, while carbon reduction policies are positive for renewable utilities and grid operators.
The pandemic has also accelerated digital transformation. Consumers and businesses are likely to continue to prioritize digital products and services, while the 5G network rollout is expected to accelerate the adoption of new technologies. Companies that enable digital payments, AI (artificial intelligence), VR (virtual reality), AR (augmented reality) and industry automation processes are well placed to benefit from the opportunities these developments create.
Despite the pandemic's disproportionate impact on older population cohorts, a fundamental demographic shift is underway. The world's senior population will double to more than two billion by 2050. In response, society will need innovative solutions – in healthcare, insurance and consumer and property markets. Ones to watch in this trend include companies that cater to the spending power of seniors as well as the biopharmaceutical, medical technology and life sciences sectors that address conditions affecting the elderly.
The COVID-19 crisis has forced many people to shop, work and socialize online, and pay more attention to our health and the environment. Digitalization trends have accelerated sharply, including in finance. There has also been a noticeable shift toward sustainability. These are all topics that we have long analyzed in our focus on Millennials' values. The now broad embrace of the younger generation's values means that companies that are in tune with the green and digital-first attitude of Millennials have plenty of opportunities ahead.
The world needs to decarbonize economic activity substantially to achieve the greenhouse gas reductions set out in the 2015 Paris Agreement. Around the world, ambitious emissions targets and unprecedented pandemic stimulus tie many global infrastructure projects to sustainability. As a result, firms leading in renewable power generation and those that provide technologies to improve sustainable food production are likely to do well.