Back in early 2020, we published a piece exploring Global Challenges, which we defined as the large-scale changes that must be made by consumers, corporates and sovereigns to prevent our environmental impact from adversely affecting commerce and quality of life. We identified a number of particularly interesting themes, from the construction of renewable energy infrastructure to a reconfiguration of how we manage waste. We also questioned whether investors, in the search for solutions to these challenges, were misallocating capital to business models which had fanciful narratives, but little chance of sustainably making an impact.
Two and a half years later, after a global pandemic, conflict in Europe and inflationary forces significantly impacting daily life around the world, we feel these issues are no less pressing, and if anything, more acute. In this piece, we seek to explore another set of Global Challenges, and identify some of the businesses which may have a hand in solving them. In the process, we also will once again demonstrate why we believe one must think critically when it comes to finding such businesses. With so many investors reliant upon often arbitrary ESG ratings (and the products based upon them), few are taking the time understand what will truly be needed to solve the issues we face. In the process, we believe investors can identify undiscovered opportunities that are bringing real solutions to the table.