Invest
Is climate change the next big investment theme?
Investors looking to outperform the market are being urged to look at structural growth, with climate change likely to create the biggest investment opportunity since the internet, an industry expert has said.
Is climate change the next big investment theme?
Investors looking to outperform the market are being urged to look at structural growth, with climate change likely to create the biggest investment opportunity since the internet, an industry expert has said.
During the GSFM media briefing, Munro’s founding partner and chief investment officer, Nick Griffin, urged investors to look for companies that are going to benefit from climate change.
“Now we conservatively estimate this is going to cost $21 trillion over the next 30 years. So, this is going to be the biggest S curve on my investment lifetime. The one before it was the internet,” Mr Griffin said.
“There’s lots of smaller companies that are going to grow over time. It’s a great place to invest over the next 20 years, we’ve seen one explode already in Tesla.”
Mr Griffin explained that the world is moving towards a less carbon-intensive global economy, which should provide a tailwind for investors.
“The decarbonisation of the planet is going to happen. There’s just too many stakeholders that are on board here,” he said.
“It is important to stress when Europe says they want to go to zero carbon by 2050, China says they want to go zero carbon, Microsoft and BHP say they want to go to zero carbon, they aren’t saying admit less carbon — they are saying admit no carbon.”
The fund manager also pointed out that while much of the focus of 2020 has been on COVID, it also saw the world shift towards existing carbon targets.
“We think there was a pandemic last year that got a lot of attention. But there was also countries, companies, councils, states, you name it, announcing zero emission carbon targets,” he said.
Despite predicting that the overall theme of climate change will likely see growth, Mr Griffin reminded investors that they will still be tasked with picking the winners to maximise growth.
“When we are looking for structural growth, we are looking for things that are going to grow double or triple times GDP,” Mr Griffin said.
“If we can do that and find the winners in those areas of structural growth, then we get earnings growth, then you get earnings growth which generally means share price growth. That is effectively how we get excess returns.”
About the author
About the author
Stock market
2 big questions investors should ask as Australia reopens
Investors need to stop thinking about how to profit from the mineral sector’s struggles, and start looking at when the best time to ride the recovery will be. ...Read more
Stock market
Trading app popularity skyrockets as retail sector booms
In 2021, trading has never been easier for retail investors, meaning the number of users on trading applications has exploded to an all-time high. ...Read more
Stock market
ETF rush predicted to intensify
The Australian ETF sector advanced AU$6.3 billion in August to hit a new milestone, as its popularity among financial advisers soared. ...Read more
Stock market
The 6 unique Australian market affects that all active managers can exploit
The uniqueness of the Australian equities market is providing fund managers with an opportunity to essentially beat the market, new research has revealed. ...Read more
Stock market
‘Don’t believe the hype’: ASIC warns of risks for new market participants
ASIC has expressed concern that inexperienced or uninformed investors are putting their capital at unnecessary risk when tempted into the market by questionable marketing strategies from market promot...Read more
Stock market
How do you choose the best ETFs?
In recent years, exchange-traded funds have become an increasingly popular option among Aussie investors. ...Read more
Stock market
Lockdowns instigate a rise in new investors
Despite COVID-19 leaving individuals and businesses to face an uncertain future, retail investors’ appetites for shares have increased throughout the pandemic, a new report has found. ...Read more
Stock market
‘Code red for humanity’ a wake-up call for private and public investment
Retail investors that have been advocating for sustainable and ESG investing are hoping a new report released by the United Nations will serve as a wake-up call to the financial industry and governmen...Read more
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
Stock market
2 big questions investors should ask as Australia reopens
Investors need to stop thinking about how to profit from the mineral sector’s struggles, and start looking at when the best time to ride the recovery will be. ...Read more
Stock market
Trading app popularity skyrockets as retail sector booms
In 2021, trading has never been easier for retail investors, meaning the number of users on trading applications has exploded to an all-time high. ...Read more
Stock market
ETF rush predicted to intensify
The Australian ETF sector advanced AU$6.3 billion in August to hit a new milestone, as its popularity among financial advisers soared. ...Read more
Stock market
The 6 unique Australian market affects that all active managers can exploit
The uniqueness of the Australian equities market is providing fund managers with an opportunity to essentially beat the market, new research has revealed. ...Read more
Stock market
‘Don’t believe the hype’: ASIC warns of risks for new market participants
ASIC has expressed concern that inexperienced or uninformed investors are putting their capital at unnecessary risk when tempted into the market by questionable marketing strategies from market promot...Read more
Stock market
How do you choose the best ETFs?
In recent years, exchange-traded funds have become an increasingly popular option among Aussie investors. ...Read more
Stock market
Lockdowns instigate a rise in new investors
Despite COVID-19 leaving individuals and businesses to face an uncertain future, retail investors’ appetites for shares have increased throughout the pandemic, a new report has found. ...Read more
Stock market
‘Code red for humanity’ a wake-up call for private and public investment
Retail investors that have been advocating for sustainable and ESG investing are hoping a new report released by the United Nations will serve as a wake-up call to the financial industry and governmen...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
