Liontrust Sustainable Investment Annual Review 2021 - International - Report - Page 18
Developing themes
Looking beyond meat (Delivering healthier foods, Enabling
healthier lifestyles)
MARTYN JONES
Until recently, obesity and health concerns were the main drivers
behind moving better diets up the global agenda but we are now
seeing growing awareness of the environmental damage caused
by meat production. Food and farming are responsible for 25% of
total global emissions, and the livestock industry, primarily meat and
dairy, makes up a significant share of this.
Given these factors, a recent report from independent think tank
RethinkX has claimed we are on the cusp of the deepest, fastest and
most consequential disruption of food and agricultural production since
the first domestication of plants and animals 10,000 years ago – and
the driving force behind this is what is known as protein disruption.
Alternatives to meat-derived protein currently fall into two camps –
plant and insect. Figures from Mordor Intelligence predict the global
market for these will hit $8.2 billion and $1.1 billion respectively by
2023, so we are clearly in the early days of growth for both.
There is nothing like as much in the news about the impact of meat
and dairy production as there is about renewable energy or transport
emissions but we feel addressing this situation can have a similar
impact on climate change. We expect the same contribution from
innovative companies working in livestock, meat and dairy as we
have seen in sustainable energy.
While there are hurdles to overcome, the direction of travel on meat
production looks as clear today as it is on fossil fuels – and we will
continue to invest in companies exposed to such structural trends
shaping the economy of the future.
Living in a digital world (Connecting people, Improving the
efficiency of energy use)
HARRIET PARKER
As more of us adapt our behaviour with climate change in mind,
most activity has understandably been around how we heat and
power our homes and travel around the world. But it is becoming
increasingly clear that we also need to take a hard look at how we
communicate and consume media.
New figures from think tank The Shift Project reveal digital technologies
now account for 4% of greenhouse gas (GHG) emissions, which is
more than civil aviation, and this could double by 2025 as the
energy required is increasing by 9% a year.
As people cannot see the pollution from selfies and videos streams,
there is a perception these services are boundless. In reality, however,
they suggest we need to move towards greater ‘data sobriety’ and
the fear is that this means greater regulation.
This issue of rising data usage, and the amount of energy it requires,
is one we have been tracking for several years. Traditionally,
companies tended to have on-site server rooms, often in regular
offices, and while these have evolved over time, they were not
purpose built, so cooling and ancillary power requirements make
them highly inefficient.
We therefore see considerable resource benefits coming from the
trend towards outsourced storage and processing, focusing on data
centre operators that have low power usage effectiveness (PUE) and
also use electricity from renewable sources. We believe these colocation centres are vital for the digital economy and will increasingly
underpin the infrastructure necessary for a more sustainable world.
The technology industry in the US now emits more carbon than ever
before, so more efficient data centres are vital.
For the centres themselves, power is their biggest
cost, giving further incentives to design and run them
more efficiently.
Will a cashless society pay off?
(Increasing financial resilience)
CHRIS FOSTER
Anyone who has suffered bemused looks when trying to pay with
cash in a shop or pub will be aware how rapidly we are moving
towards a cashless society. Increasing financial resilience remains a
key theme across our portfolios and, as part of this, we believe the shift
18 - Liontrust Sustainable Investment: Annual Review 2019
from cash to digital payments provides overall net benefits to society.
Technology has transformed the use of money over recent years, with
the rise of online shopping and the often discussed ‘death of the high
street’ highlighting a growing shift from physical to digital payments.
