Louie French, portfolio manager of the Tilney Sustainable MPS
Today marks World Habitat Day, the first day of Urban October, where the United Nations and Habitat come together to raise awareness and organise activities on urban sustainability. The theme for this year’s World Habitat Day is Accelerating urban action for a carbon-free world.
Migration around the physical impacts of climate change is a key megatrend and will continue to be over the next 20 years. Indeed, we are already seeing migration happening on a huge scale; China has seen dramatic urbanisation linked to its economic growth, while populations in other developing nations are increasingly moving away from climate-change affected areas due to issues such as water stress and famine. Some countries in Africa and South America have already seen thousands of people leave their homes in search of a more prosperous and sustainable future.
To help manage this population trend and the transition to net zero, societies need to focus on resource conservation and saving energy during industrial production, as well as improving the connections between renewable energy sources and where people live. Our cities and the global economy continue to waste energy on an enormous scale, making energy efficiency key to a more sustainable future. We need to look at the greening of buildings, combined heat and power networks, moving away from gas-fired boilers, and insulating homes throughout the country. Many of these measures are not only good for the planet, but also have the potential to help consumers save money.
As investors, there is an opportunity to help move urban areas to more environmentally friendly metropolises while also delivering returns for clients. In our Sustainable Managed Portfolio Service, we hold several strategies that have resource efficiency, water management and health as key themes.
SDCL Energy Efficiency Income Trust
As its name suggests, energy efficiency is at the core of this FTSE listed investment trust, with a diversified portfolio of global investments across a variety of sectors.
FB WHEB Sustainability Fund
The FP WHEB Sustainability Fund features resource efficiency as one of the key themes that the managers focus on when selecting high quality companies. Of the portfolio, 22% is focused on resource efficiency, with another 7% in water management.
Impax Environmental Markets
Impax is an investment trust that we hold in our growth focused portfolios, which invests in firms that are creating cleaner and more efficient energy, water, and waste markets. The trust currently has 29% of its portfolio invested in the theme of energy efficiency, and we believe has a portfolio that features companies that will be key in the transition towards a greener world.