Generation Investment Management LLP released their 5th Sustainability Trends Report (STR) on Wednesday, 14th July. The STR is primarily based on Generation’s investment frameworks and focuses on how sustainability manifests across various sectors of the economy.
In the five years Generation have been producing this report, it’s possible to observe a step change across many areas, among them: flows to ESG funds and sustainable debt issuance; investments into solutions for net-zero; deal flow in private equity and venture capital in sustainability-related areas; and the market capitalisation of companies focused on the green economy.
The STR2021 shows that this has been a year of tipping points and transformation, from capital allocation and government commitments to technological innovation and societal awareness.
As investors focus on long-term value creation and sustainability, the report highlights that this has also been a banner year for social and governance (ESG). Businesses and investors are coming to terms with the global imperative to cut greenhouse gas emissions in half by 2030. Launched in 2020, the Net Zero Asset Managers Initiative now has 87 signatories with $37 trillion of assets under management.
However, the report finds many governments and companies lacking when it comes to interim commitments and short-term action plans, as the world still works to contain and recover from the pandemic.