Looking to the future

15/07/2011

As the global population continues to rise, there is increasing demand for energy and water, particularly as the growing middle classes in emerging markets start to demand higher living standards. We explore the growing investment opportunity this presents.

Every cloud has a silver lining

It is widely expected that the world has enough oil to last the next 40 to 50 years. This, combined with the widely held belief that our behaviour has warmed up the Earth by 0.75 degrees Celsius over the last 100 years, paints a worrying picture.

The good news is that these factors are driving improvements in efficient energy usage, including waste recycling, as well as sourcing energy from alternative technologies.

Support for these initiatives

This situation has already led to total global investment in clean energy projects of $243 billion as of 2010. This is up 30% from the previous year (source: Pew Charitable Trusts’ Who’s winning the clean energy race? 2010 report).

Many commentators think it is likely that government support will grow for industries that actively support energy efficiency and low carbon technologies. A sentiment supported by the Mercer’s Climate Change Risk Report (2011), which predicts that investment in efficiency improvements and the low carbon energy market could be worth as much as $5 trillion by 2030.

Not just for the future

Involvement in this sector is not just about technology or investing in unproven firms like the ‘blue-sky’ stories of the internet investment bubble of the late 1990s. Companies are already making money in these industries, with revenues from low carbon activities tripling between 2004 and 2009 (source: HSBC’s Climate Change report – September 2010).

How to access these opportunities

Our innovative Global Environmental Enterprises Fund aims to provide long-term growth by investing in companies at the forefront of providing solutions to global energy scarcity and environmental issues.

You should consider this fund as a medium to long-term investment, ideally of five years or more. The value of your investment and any income from it may fall as well as rise and you might not get back all the money you invest.

The fund invests in companies in a specialist area. In addition, some of these investments will be smaller companies or companies from emerging markets. This means that the fund is higher risk than other more general equity funds. The fund invests overseas and changes in exchange rates between currencies may cause the value of your investment and the level of income from it to fall as well as rise.