Sustainable investing will continue apace in 2022, with four key themes including energy transition, digital transformation, automation and robotics and healthcare dominating the landscape, according to Aegon.
Malcolm McPartlin, co-manager of Aegon Sustainable Equity and Global Sustainable Equity Funds, says: “We invest in companies that are disrupting and transforming industries. Companies that have the potential to be significantly bigger on a long-term view, regardless of the wider economy.
“The companies and themes we invest in are addressing long term sustainable issues and while we don’t expect them to change too much from year to year, there are a number of areas we are closely monitoring in 2022.”
McPartlin says the current energy crisis will accelerate the transition to renewable energy, with governments and companies worldwide continuing to announce new investments. This year will, according to Aegon, be the year green hydrogen cements its position as a key component of the energy transition.
McPartlin also expects the digital transformation to have a significant impact on sustainability.
McPartlin comments: “Last year we called out digitisation as an exciting theme emerging as a response to the Covid-19 pandemic. Moving forward, we expect the digital transformation trend to continue in 2022 and for years to come. The migration to cloud computing for example is good for both businesses providing them with flexibility and resilience and for the environment in reducing the energy intensity of computing and reducing e-waste.”
Furthermore, Aegon expects automation and robotics to also experience a pick up in demand in 2022. While companies are facing ongoing labour force disruption and rising wage bills, the cost of automation technology continues to fall.
According to McPartlin: “The incentive for companies to invest in automation has increased markedly over the last year. We believe that leads to an acceleration in the adoption of automation as companies try to mitigate operational disruption and cost pressures.”
Finally, McPartlin sees huge potential for transformational change in the healthcare sector.
He says: “One area that particularly excites us is genomics. Progress made over the last 10 years including the exponential fall in the cost of gene sequencing is opening up so many possibilities for the sector. This sequencing has transformational potential, indeed it was genomic technology that enabled such rapid development of the MNRA covid vaccines that have been so crucial in fighting the Covid-19 pandemic.
“Elsewhere in healthcare we like the general theme of digitisation, which in many respects is years, even decades, behind other industries. Technological improvement and shifting consumer behaviours will drive this change. Again, we believe Covid-19 is acting as an accelerant for digitisation of healthcare and in this sector.”
