As the threat of climate change grows, the race is on to power low-carbon economies through energy efficiency, innovation and infrastructure. At the core of this drive toward sustainability is the engineering of future mobility. In the following insight, Tim Crockford, Portfolio Manager of the Hermes Impact Opportunities Fund, identifies four key areas of innovation in future mobility creating a sustainable direction of travel for transport and long-term investment opportunities.
Rapid urbanisation, decaying infrastructure, population growth and the effects of climate change continue to challenge our world’s cities. While government must play its part in addressing the problems we face by providing much-needed resources, we are now seeing public markets awaken to the innovative role they can play in creating more efficient and resilient low-carbon economies.
The sheer scale of public markets makes them powerful agents of change in generating a positive impact on society and the environment. At the forefront of impact investing, is the philosophy of moving beyond traditional screening methods to capture those companies that are the sustainable leaders of tomorrow. This is the process of driving long-term portfolio returns by unearthing purposeful companies with innovative solutions to meet society’s needs.
This provides investors with the ultimate active edge: finding systematically undervalued companies that create long-term solutions to the challenges societies face. As part of our investment process, we align each of our investments with eight key impact themes – one of which is future mobility. This theme illustrates where sustainability trends in transport are unearthing compelling impact opportunities through efficiency, safety and intelligent technology.