Liontrust Sustainable Investment Annual Review 2021 - International - Report - Page 37
Second is health. The long-term picture is clear: in the last 100 years,
child mortality has fallen from one in four dying before their 5th
birthday to fewer than one in 200. Again, this is a 20 to 40 times
improvement (in the UK, US and China) and progress continues:
even in the last 20 years in the UK, it has improved by 30%.
Finally, the riskiest thing we do every day, which is getting in our
cars. Since the 1950s, when mass car ownership took hold, road
deaths have fallen 70%; this is in spite of a 10-fold increase in miles
driven, so another 30 times improvement per km driven.
What these three dramatic improvements share is the same
mechanism of delivery: society demands change and governments
act to regulate for clean air, safer cars or better healthcare.
Companies then do what they do best: competing and innovating
to grow profitably – delivering the catalytic convertors, the vaccines,
and the airbags that improve our world.
We do not want to come across as naively optimistic about the
state of the world. There is still a huge amount to improve and
the challenges of halting climate change, biodiversity collapse,
eradicating poverty, and providing fulfilling employment and lives for
all are daunting. All of these require huge improvements in the way
we do things but, to reiterate, the most likely way of solving them is
through the same mechanisms we have used before.
This means these macro themes will continue through the next
decade, and the story of businesses delivering strong growth and
profits while improving our world has a long way to run.
In the space of just under a decade, this outlier became the solution
— the cheaper, cleaner and quicker motor car. If you look at a photo
of New York streets from just 10 years later, there is barely a horse
to be seen. Change can be non-linear.
These are a few examples of powerful trends we should celebrate.
In general, our world has got much, much better in the last 20 years.
Many of these improvements have been achieved with the help of
ingenious, efficient businesses whose profits have grown in line with
demand for their solutions.
Importantly, if you judge the future by assuming it will look much
like the present, you risk being very wrong. Instead, we believe it is
important to look at the weaker signals, the single car-like thing in the
1901 photo, and imagine ‘What if…?’
All this leads to our investment philosophy, which is that most investors
underestimate the power and predictability of positive trends and the
growth prospects of sustainable companies aligned with them.
As we said at the outset, the Sustainable Future fund range launched
in February 2001 with the primary aim of delivering strong returns to
our clients by investing in sustainable companies and we continue to
have a strong track record of doing so.
Our clients know they are providing capital to these sustainable
companies, accelerating the improvements they deliver – and
doing their part in making the 2020s another best decade ever
for humankind.
Let us look at another characteristic of these positive transformations:
they do not always happen slowly. Nowhere is this truer than the
story of transport in New York. In 1901, the city was full of
horses and each of these was producing 10kg of
droppings a day. When it rained, the roads
were a river of effluent; when dry, there
were clouds of dust and a plague
of flies. A photo from 1901
shows equine-filled streets
and just one odd
looking vehicle.
Liontrust Sustainable Investment: Annual Review 2019 - 37
