Planet under Pressure
The 2020s are the make-or-break decade for Sustainability. But Covid-19 questions almost everything. How can we handle increasingly frequent shocks? What can a resilient society and economy that is in line with planetary boundaries look like? These and many other questions are discussed in the new 2020 edition of the Global Goals Yearbook titled “Planet under Pressure”. The Yearbook supports the UN Sustainable Development Goals and is one of the publications in strong international demand.
The 2020s are the make-or-break decade for Sustainability. But Covid-19 questions almost everything. How can we handle increasingly frequent shocks? What can a resilient society and economy that is in line with planetary boundaries look like? These and many other questions are discussed in the new 2020 edition of the Global Goals Yearbook titled “Planet under Pressure”. The Yearbook supports the UN Sustainable Development Goals and is one of the publications in strong international demand.
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ECONOMIC LESSONS<br />
Prior to the pandemic,<br />
there were two core hypotheses <strong>under</strong>pinning<br />
the growth of sustainable<br />
investing. First: that broad sustainable<br />
exposures could not only perform in<br />
line with traditional benchmarks (moving<br />
away from the “financial trade-off”<br />
stigma), but could in fact build greater<br />
portfolio resilience by better weathering<br />
market downturns. Second: that investors<br />
were on the front-end of a long-term,<br />
structural shift in<br />
preferences in favor of sustainability,<br />
which would lead to a major<br />
reallocation of capital and ultimately a<br />
revaluing of assets and risks consistent<br />
with these preferences over the course<br />
of many years.<br />
Market performance and market behavior<br />
during the first quarter of 2020 have<br />
reinforced both hypotheses. The Covid-19<br />
crisis is the first real test for sustainable<br />
strategies during a period of historic<br />
financial<br />
market stress since sustainable<br />
investing has gone mainstream,<br />
and although one quarter is short and<br />
certainly not determinative, what we<br />
observed was meaningful.<br />
First, from a performance perspective,<br />
sustainable strategies demonstrated<br />
more resilience than their traditional<br />
counterparts. From an index perspective,<br />
Morningstar reported that 51 of their 57<br />
sustainable indices outperformed their<br />
broad market counterparts in the first<br />
quarter, while MSCI reported that 15<br />
Global Goals Yearbook 2020<br />
51
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