Climate change: a sustainable investing megatrend
We discuss five megatrends related to climate change and the investment implications.
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LONG-TERM STRUCTURAL TRENDS ARE DRIVING THE GLOBAL LANDSCAPE
We constantly encounter disruption in our everyday lives. Disruption transforms the way we live and provides us with more choices, comfort and convenience.
Be it online shopping, ordering our favorite food or listening to the best-loved music, we experience the power of disruption all around us which continuously giving rise to new markets, challenging established leaders.
Transforming our
everyday life
Selections based on choice, comfort and convenience
Revolutionalising
patient care
Provided to illustrate macro trends, not intended to be construed as research or investment advice.
Today, a cloud is no longer just what you see in the clear blue sky…
it’s also the heart of the digital transformation we experience in our everyday life.
DIGITAL REVOLUTION IS TRANSFORMING OUR EVERYDAY LIFE
| AUTOMATION |
Fully automated vehicles1 are still in the distant future. The algorithms and software required to provide automotive grade safety in all driving conditions is still being developed, while cybersecurity is one of the consideration factors.
Still, continuing advancements of automotive driving technology are making good progress in improving the safety of semi-autonomous vehicles, which are attracting a wider consumer base.
Sensor technologies or advanced driver assistance systems enable the digitalisation of information for navigation and communication, and allow the automation of certain functions. For example, adaptive cruise control, parking assist and fatigue recognition are becoming more common features in motor vehicles.
1. Fully automated vehicles are vehicles that can perform all driving functions in all road conditions for an entire trip with no human intervention required.
| MORE INVESTMENT IDEAS |
Today, consumers are going beyond the basics….
they also want more choices, comfort and convenience.
CONSCIOUS CONSUMPTION IS SELECTIONS BASED ON CHOICE, COMFORT AND CONVENIENCE
| PET HUMANISATION |
Increasingly, pet owners are treating their pets as part of the family. And the emergence of pets as ‘family’ rather than just companion animals is driving consumer spending on pet care. Additionally, mobility restrictions have presented opportunities for pet ownership.
The global market for pet accessories is projected to reach US$42.3 billion by 2026 from 2020’s US$29.4 billion2.
Housing and bedding products designed for pets are also gaining popularity in the developed economies of North America and Europe. Companies are thus targeting these regions, emphasising on product innovations to provide assistance to pet owners in adopting a convenient lifestyle. And there are a variety of goods and services, from grain-free meat to ‘social petworking’.
2. Source: “Pet Accessories – Global Market trajectory & Analytics”, Research and Markets, April 2021. Forecasts and estimates may or may not come to pass.
Today, healthcare is not limited to just the human touch….
the latest innovation is set to revolutionalise our future.
HEALTHCARE INNOVATION IS REVOLUTIONALISING PATIENT CARE
| VIRTUAL CARE |
The public health crisis since 2019 has brought significant opportunities in the medical technology market. In March 2020, only 13% of American Academy of Family Physicians (AAFP) members had provided video or phone consultations to their patients. By May 2020, 94% of members were regularly doing so3.
The public health crisis has demonstrated that enabling physicians to virtually care for their patients at home can help reduce patients’ and clinicians’ risk of exposure and infection while also increasing access and convenience for patients4.
Telehealth visits can also enable physicians to get to know their patients by observing them in their home environment, which can contribute to more personalised treatment plans and better referral to community-based services.
3. Source: “A toolkit for Building and Growing a Sustainable Telehealth Program in Your Practice”, AAFP, September 2020.
4. Source: “Preserving Access to Telehealth Beyond COVID-19”, AAFP, July 2021.
Today, green is no longer just a colour….
it also means sustainability, clean energy and low-carbon technologies.
GREEN IS SEEKING SUSTAINABILITY
| A SHARING ECONOMY |
The shared creation, distribution and consumption of goods and services is a rising trend among economies5.
The focus is on the sharing of under-utilised assets in ways which improve efficiency, sustainability and community. This can have a positive impact on sustainability as the overall use of resources is reduced, helping to cut down carbon footprints and emissions6.
Digital sharing platforms and mobiles apps for ride-hailing and home-sharing services are disrupting some industries such as transportation, hospitality and payments.
The sharing economy is transforming businesses and has the potential to promote shifts in collective consumption behaviour.
5. Source: “How the Sharing Economy is Transforming Business”, Washington State University, Carson College of Business, 2021.
6. Source: “The sharing economy promotes sustainable societies”, Nature Communications, 14.03.2019.
Today, inclusion is not just a trendy concept....
it drives government and corporate agenda to strive for equality.
INCLUSION IS STRIVING FOR EQUALITY
| BROADENING ACCESS |
Economies are attaching greater importance to financial inclusion, which covers the availability and equality of opportunities to access financial services7.
Much effort has been placed on promoting access to basic financial services to meet the needs of everyday life and businesses. And digital technology has been a game changer.
For example, digitalisation has enabled the building of successful ecosystems, taking into account the right participants, their interdependencies, while creating a commercially viable, inter-operable payments system.
Payments are supporting the development of digital economies and driving innovation — all while functioning as a stable backbone for economies8.
7. Source: Financial inclusion, Banking Conduct and Enforcement, Hong Kong Monetary Authority, July 2021.
8. Source: “Payments 2025 & beyond”, PwC, 07.05.2021.
ACCESSING GLOBAL EQUITY OPPORTUNITIES
Today, the speed at which disruption is happening and the way in which companies are preparing for and managing it is unprecedented due to technological breakthroughs. Companies that continuously reinvent themselves by adapting to these fast-paced changes could have the potential to generate sustained growth over the years to come.
We believe that strong disruptive trends and beneficiaries of those trends may continue to present opportunities for superior returns for much longer than many expect.
By identifying those long-term durable and impactful disruptive trends, we can align the portfolio towards companies that we believe are well-placed to benefit throughout the economic cycle and importantly, avoid those that may be negatively impacted or disrupted.
JPMorgan Investment Funds -
Global Select Equity Fund9
- High-conviction ideas and a strategy based on fundamental research
- Seeks to achieve a return in excess of global equity markets by investing primarily in companies, globally
JPMorgan Investment Funds -
Global Dividend Fund9
- Seeks to provide long-term capital growth opportunities by investing primarily in companies, globally, that generate high and rising income
- Balancing growth opportunities with yield generation
9. The Fund seeks to achieve its stated investment objectives. There can be no guarantee the objectives will be met. Investors should make an independent evaluation, refer to offering documents (including for the risk factors) and seek financial advice before investing.
OUR EQUITY CAPABILITIES
Assets under management |
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US$699 billion |
|
Locations worldwide |
|
7 |
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Investment professionals |
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370+ equity investment professionals with 13+ average years of experience 145 equity research analysts with 10+ average years of experience |
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Source: J.P. Morgan Asset Management. As of 31.03.2021. Includes portfolio managers, research analysts, traders and investment specialists with VP title and above. |
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