Hugo Investing

Sustainable Investing

Do we want to go back to normality?
Last year was memorable in many ways but not really a year that anyone would
like to repeat any time soon. Yet it hasn’t brought all doom and gloom. It has
become very clear that not everything we considered “normal” was actually
good for our personal health, global prosperity or our planet. It’s time to redefine
“normal”. If we reboot our society and economy, there is a tremendous
opportunity to create a world that is happier, healthier, more ethical and with a
higher level of equality. But it will take a lot of courage, cooperation and a great
deal of strength to achieve this.
Company responsibility
Sustainability was initially embraced by many companies because it scores
highly with the public. But it turns out that the public are not that easy to fool.
Serious guidelines have now been drawn up: the so-called Environmental Social
and Governance standards. Larger listed companies are adapting their policies
which is good news for investors. The various investment parties have also
developed special investment funds for sustainable investment. At Hugo Broker,
we have also noticed that our clients are increasingly opting for sustainable
investments.


The challenges

Companies will most likely always brag about the ESG goals that they achieve.
That’s normal. But at the same time, there will always be certain ESG goals that
they grapple with – some companies are simply better able to achieve certain
goals, and no company can be expected to achieve each goal on its own. In the
future, companies must seek help and work together to achieve their ESG
goals. A good example is in the pharmaceutical industry where companies often
depend on pure water for the production of medicines. Pharma organisations
could work with startups like Desolenator, which use solar energy to make
affordable drinking water from the sea, instead of tapping existing water
sources. 2020 has changed people’s priorities in countless ways. Many consumers now have an even greater preference for sustainability and are demanding this from producers. Research in the UK shows that 73% of customers now expect
2 online retailers to use recyclable packaging. More than a third of consumers only
buy products that are made from natural raw materials and/or originate from the
natural environment. 4 out of 5 Texans now believe in climate change.
With this in mind, low prices will certainly be questioned more than ever. In
2021, companies will need a full understanding of their supply chain so that they
can ensure they act ethically and sustainably.

Collaboration on a large scale

Companies working together to achieve their sustainability goals is one thing,
but to achieve global goals, such as reducing the temperature rise to 1.5%, will
require entire industries to work together. The United Kingdom, for example, has
decided to supply all homes with wind energy by 2030. To achieve this goal, a
huge amount of infrastructure will have to be set up. The rollout of electric cars
faces the same problem. As 2030 approaches, the demand for infrastructure
materials and services will grow exponentially. This includes things like charging
stations, roads and wind turbines. Flexibility and cooperation will have to
become the new normal.
For an overview of individual sustainable stocks or sustainable ETFs (baskets of
stocks) that you can purchase yourself, please contact me. You can also
choose to have Saxo Bank do it for you!

Kaspar Huijsman
Kaspar Huijsman is the director of Hugo Broker. A seasoned expert in investment, he offers seminars throughout Spain and Portugal.

The information in this article should not be interpreted as individual investment advice. Although Hugo compiles and maintains these pages from reliable sources, Hugo cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk. We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks.

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