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By investing in companies that focus on sustainability, investors are positioning their investment dollars to benefit from our global reality.
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Will sustainably focused companies actually contribute meaningfully to our global economy?
Yes. According to a report by the World Business Council for Sustainable Development, by 2050 the business opportunities for sustainability-focused companies are expected to be between $3 trillion and $10 trillion annually, or up to 4.5 percent of global GDP. To put it in perspective, in 2016 the entire economic output of Russia represented 4 percent of global GDP, according to the International Monetary Fund.
Why does investing with impact matter?
It matters because our population is growing rapidly and we don’t currently have sufficient resources on our planet to support us. In 1900, the world population was estimated at 1.7 billion and by 2000, this increased to approximately 6.1 billion. By 2050 it is forecast to reach 9.7 billion. By then the demand globally for resources such as water, food and energy is projected to rise as much as 55 percent, 60 percent and 80 percent, respectively. Companies that profit from working to resolve the globe’s sustainability challenges or maintain this focus as part of their corporate culture will be at a significant advantage over others.
How do these global conditions affect our financial lives?
The current state of the globe requires each one of us to consider how our daily choices affect our ability to thrive in the future. As the collective conscious becomes more aware of this global imperative, people will respond by asserting their worldview in the way they spend money, give money and invest their money. By investing in companies that focus on sustainability, investors are positioning their investment dollars to benefit from our global reality.
Noel Pacarro Brown is financial adviser of The Pacarro Group at Morgan Stanley. Reach her at Noel.Brown@ms.com or 525-6910.