External Keynote: How US tariff policies and global climate pressures will shape the future of sustainable investment in the UK
Synopsis
We will begin the day discussing how international policies will affect the future of sustainable investment.
Not just about quantity of growth, also about quality of growth
Tariffs- trump doesnt want Chinese cars from Mexico .
Companies have already shifted their supply chains- 1/4 warehouse occupiers have already changed supply chains (sunk cost) . If you want to invest sustainably - where your supply chain sits is essential. Raises another layer of due diligence.
A lot of companies and countries are thinking about how you operate in a multi aligned world. how you think about investing is about how countries / companies position themselves. “Multi alignment”. If you are a country/ company you could align to US on some things and China or some things. For a lot of WM.
Manufacturing is slowly returning to US- but not creating new jobs. It’s automation that’s leading to investment. The aim of tariffs is to generate jobs, which this isn’t doing.
In China, growth is the goal. They will be thinking about just transition - their influence on sustainable investing will be more challenged.
AI bubble - will only trigger recession is there is debt. Investment in data centres- if fuelled by debt, then as valuations come down for AI could this trigger something worse? This is unlikely to happen to Microsoft / Amazon unlike dot com boom. Bubble will always burst- will just need to determine impact. Late 1990s/ period of history to look at…
How do companies respond - have scenarios (rather than forecasting), what are the no regret decisions you can take. Biggest winners from crashes are those who are good at focusing on their own business. The upside scenario is important - focus on gaining market share is more important.
Not just about quantity of growth, also about quality of growth
Tariffs- trump doesnt want Chinese cars from Mexico .
Companies have already shifted their supply chains- 1/4 warehouse occupiers have already changed supply chains (sunk cost) . If you want to invest sustainably - where your supply chain sits is essential. Raises another layer of due diligence.
A lot of companies and countries are thinking about how you operate in a multi aligned world. how you think about investing is about how countries / companies position themselves. “Multi alignment”. If you are a country/ company you could align to US on some things and China or some things. For a lot of WM.
Manufacturing is slowly returning to US- but not creating new jobs. It’s automation that’s leading to investment. The aim of tariffs is to generate jobs, which this isn’t doing.
In China, growth is the goal. They will be thinking about just transition - their influence on sustainable investing will be more challenged.
AI bubble - will only trigger recession is there is debt. Investment in data centres- if fuelled by debt, then as valuations come down for AI could this trigger something worse? This is unlikely to happen to Microsoft / Amazon unlike dot com boom. Bubble will always burst- will just need to determine impact. Late 1990s/ period of history to look at…
How do companies respond - have scenarios (rather than forecasting), what are the no regret decisions you can take. Biggest winners from crashes are those who are good at focusing on their own business. The upside scenario is important - focus on gaining market share is more important.