Regulation is evolving
Regulation in Europe has only intensified since European Commission President Ursula von der Leyen proclaimed that the EU Green Deal would be Europe’s “man on the moon moment”. The deal aims to reach carbon neutrality by 2050, making Europe the first climate-neutral continent. The pandemic did not weaken the support for the Green Deal but reinforced it, leading to a recovery plan with a strong focus on green investments and digitalisation. We believe this regulatory tailwind will intensify this year and beyond. For example, the Paris Agreement requires all buildings to be net zero carbon by 2050, but less than 1% are today. Companies like Schneider, the global leader in buildings’ energy transition and automation, offer solutions to this challenge and will ultimately benefit from the intensifying regulatory backdrop.
Corporates committing to a cleaner planet
Corporates are making bold commitments towards a brighter future for our planet. Swiss giant Nestlé recently announced ambitious targets to reduce its greenhouse gas emissions that will ripple through its supply chain and various sectors, creating opportunities for companies tackling the complex challenges facing our global Agri-Food system.
One such company is IFF, a US-based flavours and fragrances company, which provides solutions to some of the complex challenges faced by the food and personal care manufacturers. Consumers want products that are high quality without harming the planet, and IFF enables this by providing the insight, world-class innovation and application expertise. The company is strongly positioned to benefit from the sustainable nutrition tailwind.
Similarly, the transition from traditional to electric vehicles (EVs) reached a tipping point in 2019. Covid-19 has seemingly accelerated this process, and in November 2020, EVs hit an incredible 17% of new car sales in Europe’s four largest car markets – a figure that would have been unthinkable as little as a year ago. And the runway for further growth is clear, driven by regulation: to reach the Paris Agreement goals, EVs must be 50% of the European market by 2030. Belgium-based materials technology company Umicore plays an important part in the transition to decarbonised mobility. As a leading supplier of cathode materials for EV batteries, Umicore is a key enabler of the growth.
We expect momentum in tackling urgent environmental and social issues to continue unabated in 2021, catalysed by regulation and corporate actions. We are focused on identifying and investing in quality companies that can harness the huge opportunities being created, as we believe they provide outstanding long-term investment opportunities.
Get to know the author
Sacha El Khoury, Director, Portfolio Manager, Global Equities
Sacha joined the firm in 2009, following an extensive education. She graduated with an MSc in Finance (with distinction) from City University, The Business School (formerly Cass), and a BA in Economics from the American University of Beirut. She is also a CFA Charterholder.
Away from her desk, Sacha has been practicing yoga for the past 10 years. A classical pianist by training, she has recently decided it was time to start thinking outside the box and has taken the plunge to learn how to play jazz and improvise – which she admits is extremely hard! During lockdown, Sacha discovered the meditative properties of pottery. With a studio just five minutes down the road, she’s now hooked and running out of cupboard space for her various creations.
While her hobbies provide ways to reconnect to nature and herself, Sacha feels her job gives her the best outlet to make a positive influence on the world around her, through engagement with companies and a positive attitude to investing.