The first half of 2023 offered investors a bumpy ride. Early optimism, driven by China’s economic reopening and signs of slowing inflation, received a boost from excitement around the potential of generative AI.
While enthusiasm for mega cap AI-related stocks continued through to the second quarter, persistent inflation and a mini banking crisis muted expectations. The return of market breadth towards the end of H1 created a positive dynamic, particularly for sustainable businesses with compelling valuations.
In our interim report, we review recent market performance and discuss AI as an investment theme, reflecting on what it all means for sustainability focused investing. We also highlight our engagement with companies on ESG outcomes, illustrating how we integrate this into our investment process.