Impact Investing Investing in the responsible consumer
Climate change is raising serious questions about how sustainable our lifestyles are. As a consumer, you can support sustainable companies with your everyday purchases. In turn, responsible companies will be well-placed to attract investors who are looking for both financial return and positive impact. Our new report looks at why responsible consumerism is on the rise and which sectors it will disrupt.
The consumer goods sector has been an engine for economic growth in many parts of the world and makes up a huge proportion of global trade. The sector's size comes at a cost, though. 60% of global greenhouse gas emissions and 80% of freshwater usage originate from consumer products. The World Wildlife Fund described this as a looming ecological credit crunch.
The way we make, produce and consume goods means we are exhausting natural resources. Our inefficient supply chains often end up polluting the environment. It's estimated that there will be more plastic in the world's oceans than fish by the year 2050. The system also builds in wasteful practices: every year, we throw away around one third of all food produced globally.
Recognition of these facts has led to a new focus on responsible consumerism. Goal 12 of the United Nations Sustainable Development Goals (SDGs) seeks to ensure sustainable consumption and production1. Achieving this goal would do more than save the planet. It could also create vast new economic benefits. From secondhand fashion to plant-based proteins, a more sustainable consumer economy could unlock USD 4.5 trillion in new opportunities every year.
New opportunities for investors
These trends will leave many consumer sectors ripe for disruption. Investors need to consider how to use their wealth more sustainably, for the good of the environment as well as for the long-term health of their portfolios.
The challenge is to identify which companies are acting in anticipation of regulatory and consumer changes. This means evaluating how companies get to grips with sustainability.
Business models that cater to responsible consumers will be better placed to face disruption. Investors in these companies will be better able to position their portfolios for the long term, and to do well by doing good.
Contact us today to learn more about investment opportunities in this area
1. The Sustainable Development Goals lay the groundwork for promoting a universal access to a more sustainable future. Their main focus is to tackle global issues including poverty, environmental and climate change as well as social inequality. The Goals are interdependent and the objective is to meet each target by 2030.