How can technology support a better tomorrow: Three emerging trends
With Covid-19 changing that way that the world works, the reality is that these shifts will change the future of responsible business practices. Business will have the challenge of adapting to a different world and the implications this will have on sustainability and purpose. We look at three emerging trends emerging from the current situation and how technology can support a better tomorrow.
Each day in our new reality seems to bring something that was previously unimaginable. On one hand, these phenomena can be profound – the exposure of the deep vulnerability of our global systems, the burden borne by those who are most at risk, or the gratitude we feel for the doctors, nurses and key workers protecting us.
On the other, they are transformations in aspects of life which once seemed impossible. For example, the observation that, for many of us, the necessity of organising our day to day lives – alongside our fundamental need for connection – is driving us more online than ever before.
While the outcome of the current situation remains unknown, we can say with some confidence that this global reset will shape the responsible business practices of the future.
Covid-19 is important to the sustainability and purpose agenda because of the implications for how business will be held to account, by institutional and retail investors, by current and potential employees, by policy makers, regulators, and by the media. But it is also relevant because these events are likely to shape how businesses adapt to a new world.
Access to information, insight and conversation online has exponentially accelerated amidst a proliferation of news and data. Clients and customers are finding new ways to interact, share knowledge, and deliver both the transparency and the security customers demand.
Added to this, the global reset has seen institutional and retail investors demand more transparency on the environmental and societal impact of the organisations in which their long-term savings are invested in order to make more informed decisions. Up until now, access to technology, and of course data, has been limited.
Taking this environment into account, we detail three trends we believe will shape the world of the immediate future and beyond:
1) The relative resilience of ESG investments' performance and investor flows in the downturn; ESG funds have continued to outperform the wider market. ESG stock funds outperformed in first quarter of 2020, as reported by the Financial Times and analysed by Morningstar¹.
Based on flows and performance data, post COVID-19 and longer term it is likely that sustainable investments have the potential to be the beneficiary of a disproportionately large share of flows when investors return to equities. Accessing information to understand the environmental and societal impact of investments is likely to become a prerequisite.
2) The global imperative for businesses and governments to act responsibly in relation to the environment and society, and to explain their commitment to clients and citizens, is likely to be solidified.
Transparency and a globally connected world means that now more than ever before, business will be held to account for their practises. An understanding of environmental and societal concerns is increasingly an imperative.
3) The move to an increasingly digital world will accelerate and become the norm.
Increased reliance on technology, including platform providers, advisers and end clients both to deliver access to personalised investment solutions, and for delivering guidance or education.
To enable the shift towards greater sustainability, investors must be empowered to positively reallocate capital towards solving the world’s most pressing environmental and societal issues while achieving robust returns – combining valuations with values.
Over the course of the next few weeks, we look forward to sharing with you a series of FNZ sustainability technology innovations to support your journey through the days, months and years to come.
Vian Sharif is Head of Sustainability at FNZ Group
¹Source: Financial Times Moral Money newsletter, 9 April 2020, Morningstar