EXECUTIVE PERSPECTIVE: No limits to growth for sustainable investments

EXECUTIVE PERSPECTIVE: No limits to growth for sustainable investments

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Friday, January 10, 2014 - 4:40pm


CONTENT: Article

By Dr. Jan Amrit Poser, Chief Economist and Head of Asset Management at Bank J. Safra Sarasin | 7 January 2014

The United Nations Climate Change Conference in Warsaw showed us again how difficult it is to translate obvious facts into clear actions. The UN’s climate change report published at the end of October evaluated recent years’ climate change studies, and got to the heart of the issue. Despite all the controversies, scientists agree that there is no doubt that global warming has occurred over the past decades, and continues up to the present day. According to data produced by Global Footprint Network, we already consume resources equivalent to one-and-a-half times the planet Earth.

If resource consumption continues to rise as it has to date, humanity will require three-and-a-half Earths by 2050 to satisfy its hunger. However, we have only one planet, and we will not be receiving another. Although opinions about the extent and causes of the climate phenomenon continue to diverge, it is clear that economic growth, as we know it today, will reach its limit unless a radical change occurs in the way we operate and do business.

What is uncontested from a macroeconomic perspective, nevertheless frequently fails to be translated into microeconomic analysis. Investors focus too strongly on quarterly financial results. Sustainability issues such as climate change, demographic shift and resource scarcity are rejected as abstract scientific concerns. Yet they have a tangible relationship with how portfolio securities perform.

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