Renewable energy, food production, infrastructure projects and education offer multi-trillion dollar opportunities to investors. The World Economic Forum (WEF) has identified six global risks areas that combined have a $6.27 trillion annual investment gap, challenges it it is urging investors to focus on.
To support efforts to make this a priority, the WEF has published a new framework document: Transformational Investment: Converting Global Systemic Risks into Sustainable Returns. It outlines the risks, which include: water security, climate change, population growth, geopolitical uncertainty, negative interest rates and technology disruption.
“The COVID-19 pandemic has altered the global economy in unprecedented ways,” said Maha Eltobgy, Head of Investing, World Economic Forum. “The pandemic has impacted capital markets, liquidity, the financial stability of entire industries and even challenged the fiscal solvency of governments. The Transformational Risk framework offers investors a new way to analyse systemic risks in the 21st century.”
Ensuring money flows where it is needed most should be an obvious thing to do. Widespread symptoms of self-interest like hunger, poverty and inequality tell a different story. Perhaps the pandemic will be a lightbulb moment where those controlling the biggest pots understand the interconnected imperative of spending wisely. In the money world, Environmental, Social and Governance (ESG) investment are a step in the right direction.
“At the start of 2020 I said that ESG investing would reshape the investment landscape in this new decade – but this phenomenon has been dramatically and irreversibly accelerated by the current situation,” said Nigel Green, the chief executive and founder of deVere Group.
Read more about the ways ESG creates value in this report by McKinsey.
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