Professional Investor: The winners and losers in a brave new world

Many savers who are contributing to a personal pension will not be drawing on that pension for another 10 or 20 years. So what sort of world will they be retiring into? What are the challenges we will then?

Climate change is the obvious one. Over the next 20 years, we will experience increasingly extreme weather conditions, with hotter summers, colder winters, storms, floods and droughts. By then, one hopes, most governments will have responded in a concerted way to the climate-change challenge, and there will be big changes in our sources of energy, in the cars we drive and in the way we fuel our homes and industries.

Meanwhile, landfill space will be scarce to non-existent, so waste will have to be recycled or minimised.

Societal issues may include increasing concern over obesity, which in the US has now overtaken smoking and alcohol as the main preventable drain on the health services. The response may be a greater emphasis on healthy diets and exercise, particularly for children.

The ageing population in developed countries will place great demands on healthcare. There may be breakthroughs in the fight against major diseases, but demand for joint replacements and care for the aged will continue to rise steeply.

At the same time, population growth in the developing world, along with a demand for higher standards of living, will increase pressure on the earth's limited resources and fragile ecosystems. The trend towards urbanisation will continue, with sprawling slums creating hotbeds of poverty and frustration, leading to rising terrorist attacks.

As socially responsible investors, our brief is to take the long-term view, examining all these themes. Once we have suppressed the desire to throw ourselves out of the window, we try to focus on investing in those companies that are providing solutions to some of these pressing global issues.

With climate change, for example, we see huge potential for investing in alternative energy sources. Wind and solar firms have already done well, but they remain highly attractive long-term investments. Solon and Solarworld in Germany, Conergy in the US and Clipper Windpower in the UK are favourite long-term plays.

We are also interested in companies involved in biofuels, such as Abengoa in Spain and Novozymes in Denmark. Energy-efficiency solutions are attractive long-term prospects, including insulation companies such as SIG in the UK.

Water shortages mean that water meters will probably be mandatory. Techem in Germany makes water meters, while Hyflux and Biotreat in Singapore are pioneering purification technologies.

We're concerned about companies with high energy requirements and high waste outputs. Major companies not addressing these issues are storing up problems - and huge costs - for themselves in the future. Companies whose design innovations incorporate environmental solutions are of interest to us; Apple and Sony are just two examples. Many major utilities are involved in recycling, but an interesting UK smaller company is Fonebak, which recycles used mobiles.

The challenge in knowing which themes to focus on is to identify those that have an obvious investment impact. For example, there is a clear trend towards greater consumption of organic food in the UK, but the market for organic food production is very fragmented and largely in private hands, so investment is limited to the likes of Wholefoods Markets in the US, which owns the organic food chain Fresh and Wild.

By contrast, changing demographics can be played in a number of ways. A host of companies are involved in healthcare innovations, such as Roche, the Swiss pharmaceutical giant, which make the breast cancer drug Herceptin, or Elekta in Sweden, pioneering new developments in radiotherapy. We are also interested in companies involved in broader healthcare solutions, such as Fresenius in Germany, which runs dialysis centres.

It's wise to avoid companies that are part of the healthcare problem rather than the solution; not just tobacco, but those whose main product is junk food, sweets or fizzy drinks. France has banned canned-drinks machines from all schools, and we see the closure of 25 McDonald's restaurants in the UK as just the start of this trend.

Clare Brook is head of socially responsible investment for Norwich Union. Derek Pain is away

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
Life and Style
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions