Research report also profiles 10 companies well-positioned to capitalize on the opportunities
Sustainalytics, a leading global provider of ESG and corporate governance research, ratings and analytics, recently released a new thematic research report titled, 10 for 2017: Investment Themes in a Changing World. The report looks at the key drivers of 10 ESG investment themes that are expected to create new risks and opportunities for investors in 2017. In addition, the report profiles 10 companies, spanning seven countries and eight industries, that are poised to take advantage of these trends. The unifying threads of the 10 investment themes include:
Rising Concerns over Data Security
The report examines the market opportunities associated with blockchain, autonomous vehicles and cybersecurity, and highlights risks related to data security and privacy. Based on Sustainalytics’ ESG research, BMW Group is well-prepared to comply with tightening regulations around self-driving cars, and Symantec, as a pureplay cybersecurity firm, is in a strong position to capitalize on the significant increase in projected cybersecurity spending.
Growing Sustainability and Market Trends
The declining cost of solar power and the consumer shift toward plant-based proteins are also featured in the report. Pacific Gas & Electric (PG&E) Company is favorably positioned on solar through its generating facilities in California and residential installation products. Danone’s historical focus on health and wellness also provides a strong platform for growth into plant-based proteins. Trends such as value-based drug pricing, energy storage and workforce diversity are also explored.
Improving Corporate Transparency
Sustainalytics’ report also assesses the increasing focus of European regulators on tax avoidance and calls for more transparent corporate tax reporting. The potential impact of US regulations around executive pay disclosure are also covered, with Noble Energy highlighted as an early discloser of its CEO to median pay ratio.
“Given changing consumer preferences, the relentless pace of technology, and more regulatory and investor calls for enhanced corporate transparency, the investment themes we outline are likely to present significant upside opportunities in the years ahead,” said Doug Morrow, associate director of Thematic Research at Sustainalytics. “From our perspective, companies that exploit these trends are in a favorable position to deliver long-term value for investors.”
Sustainalytics’ annual “10 for” thematic research series explores the environmental, social and governance related investment themes we expect to develop over the coming year.
This year’s report, 10 for 2017: Investment themes in a changing world, presents a diverse set of themes, which we believe will alter the competitive landscape for firms and create new risks and opportunities for investors. The themes range from data security in blockchain and autonomous vehicles to the consumer shift toward plant-based proteins to the declining cost of solar.
For each of the 10 themes, we describe the key drivers and identify companies that investors can use to build an investment thesis.
The 10 Investment themes
Blockchain; Tax Avoidance; Utility-Scale Solar; Workforce Diversity; Autonomous Vehicles; Executive Pay Ratios; Plant-Based Proteins; Cybersecurity; Equitable Drug Pricing; Energy Storage.
New condiments, functional beverages and natural foods
Recently, Whole Foods Market’s (NASDAQ: WFM) global buyers and experts announced the trends to watch in 2017. Wellness tonics, products from byproducts and purple foods are just a few top predictions according to the trend-spotters, who share more than 100 years of combined experience in sourcing products and tracking consumer preferences.
Whole Foods Market’s top 10 trends for 2017 include:
Wellness tonics. The new year will usher in a new wave of tonics, tinctures and wellness drinks that go far beyond the fresh-pressed juice craze. The year’s hottest picks will draw on beneficial botanicals and have roots in alternative medicine and global traditions. Buzzed-about ingredients include kava, Tulsi/holy basil, turmeric, apple cider vinegar, medicinal mushrooms (like reishi and chaga), and adaptogenic herbs (maca and ashwagandha). Kor Organic Raw Shots, Suja Drinking Vinegars and Temple Turmeric Elixirs are just a few products leading the trend.
Products from byproducts. Whether it’s leftover whey from strained Greek yogurt or spent grains from beer, food producers are finding innovative—and delicious—ways to give byproducts new life. Eco-Olea is using water from its olive oil production as the base for a household cleaner line, condiment brand Sir Kensington’s is repurposing leftover liquid from cooking chickpeas in a vegan mayo, and Atlanta Fresh and White Moustache are using leftover whey from yogurt production to create probiotic drinks.
Coconut everything. Move over coconut oil and coconut water—coconut flour tortillas, coconut sugar aminos and more unexpected coconut-based products are on the rise. Virtually every component of this versatile fruit-nut-seed (coconuts qualify for all three!) is being used in new applications. The sap is turned into coconut sugar as an alternative to refined sweeteners, the oil is used in a growing list of natural beauty products, and the white flesh of the coconut is now in flours, tortillas, chips, ice creams, butters and more. New picks like coconut flour paleo wraps, 365 Everyday Value Fair Trade coconut chips and Pacifica Blushious Coconut & Rose Infused Cheek Color demonstrate coconut’s growing range.
Japanese food, beyond sushi. Japanese-inspired eating is on the rise, and it doesn’t look anything like a sushi roll. Long-celebrated condiments with roots in Japanese cuisine, like ponzu, miso, mirin, sesame oil and plum vinegar, are making their way from restaurant menus to mainstream American pantries. Seaweed is a rising star as shoppers seek more varieties of the savory greens, including fresh and dried kelp, wakame, dulse and nori, while farmhouse staples like Japanese-style pickles will continue to gain popularity. The trend will also impact breakfast and dessert, as shoppers experiment with savory breakfast bowl combinations and a growing number of mochi flavors like green tea and matcha, black sesame, pickled plum, yuzu citrus and Azuki bean. This is playing out in products like 365 Everyday Value Sweet Sabi mustard, Republic of Tea’s new Super Green Tea Matcha blends and recipes like Coconut Mochi Cakes.
Creative condiments. From traditional global recipes to brand new ingredients, interesting condiments are taking center stage. Once rare and unfamiliar sauces and dips are showing up on menus and store shelves. Look for black sesame tahini, habanero jam, ghee, Pomegranate Molasses, black garlic purée, date syrup, plum jam with chia seeds, beet salsa, Mexican hot chocolate spreads, sambal oelek or piri piri sauce, Mina Harissa and Frontera Adobo Sauces (Ancho, Chipotle and Guajillo varieties).
Rethinking pasta. Today’s pastas are influenced less by Italian grandmothers and more by popular plant-based and clean-eating movements. Alternative grain noodles made from quinoa, lentils and chickpeas (which also happen to be gluten-free) are quickly becoming favorites, while grain-free options like spiralized veggies and kelp noodles are also on the rise. That said, more traditional fresh-milled and seasonal pastas are having a moment too, which means pasta is cruising into new territories with something for everyone.
Purple power. Richly colored purple foods are popping up everywhere: purple cauliflower, black rice, purple asparagus, elderberries, acai, purple sweet potatoes, purple corn and cereal. The power of purple goes beyond the vibrant color and often indicates nutrient density and antioxidants. Back to the Roots Purple Corn Cereal, Jackson’s Honest Purple Heirloom Potato Chips, Que Pasa Purple Corn Tortilla Chips, Love Beets and Stokes Purple Sweet Potatoes are all examples of this fast-growing trend.
On-the-go beauty. “Athleisure” is not just a fashion trend; the style is now being reflected in natural beauty products, too. With multitasking ingredients and simple applications, natural beauty brands are blurring the line between skincare and makeup products, and simplifying routines by eliminating the need for special brushes or tools. Trending products include Mineral Fusion 3-in-1 Color Stick, Well People Universalist Multi-Stick and Spectrum Essentials Organic Coconut Oil Packet.
Flexitarian. In 2017, consumers will embrace a new, personalized version of healthy eating that’s less rigid than typical vegan, paleo, gluten-free and other “special diets” that have gone mainstream. For instance, eating vegan before 6 p.m., or eating paleo five days a week, or gluten-free whenever possible, allows consumers more flexibility. Instead of a strict identity aligned with one diet, shoppers embrace the “flexitarian” approach to making conscious choices about what, when, and how much to eat. Growing demand for products like 365 Everyday Value Riced Cauliflower (used for clean-eating favorites like gluten-free pizza crusts), Epic Bison Apple Cider Bone Broth and Forager Cashew Yogurt point to growth in this clean-eating category.
Mindful meal prep. People aren’t just asking themselves what they’d like to eat, but also how meals can stretch their dollar, reduce food waste, save time and be healthier. Trends to watch include the “make some/buy some,” approach, like using pre-cooked ingredients from the hot bar to jumpstart dinner, or preparing a main dish from scratch and using frozen or store-bought ingredients as sides. Fresh oven-ready meal kits and vegetable medleys are also on the upswing as shoppers continue to crave healthier options that require less time. Whole Foods Market’s Freshly Made video series highlights the kinds of recipes and ingredients shoppers are seeking.
This year’s predictions came from Whole Foods Market’s experts and industry leaders, who source items and lead trends across the retailer’s cheese, grocery, meat, seafood, prepared foods, produce and personal care departments, and spot trends for the retailer’s more than 465 stores.
by Rose Marcario, President and CEO of Patagonia, Inc. and Patagonia Works.
Back in November, when we announced we’d give 100 percent of our global retail and online Black Friday sales directly to grassroots nonprofits working on the frontlines to protect our air, water and soil for future generations, we heard from many of our customers calling it a “fundraiser for the earth.”
We’re humbled to report the response was beyond expectations: With your help, Patagonia reached a record-breaking $10 million in sales. We expected to reach $2 million in sales—we beat that expectation five times over. The enormous love our customers showed to the planet on Black Friday enables us to give every penny to hundreds of grassroots environmental organizations working around the world.
Many of these environmental groups are underfunded and under the radar, and they are overwhelmed with your commitment. On behalf of these activists and every Patagonia employee, we extend a heartfelt thank you to our customers, friends and community worldwide who showed up to #loveourplanet.
You can learn more about the past recipients of Patagonia environmental grants in your community here – www.patagonia.com/grants-listings.html . This additional infusion of resources will go a long way toward addressing climate change and other serious environmental issues.
The science is telling us loud and clear: We have a problem. By getting active in communities, we can raise our voices to defend policies and regulations that will protect wild places and wildlife, reduce carbon emissions, build a modern energy economy based on investment in renewables, and, most crucially, ensure the United States remains fully committed to the vital goals set forth in the Paris Agreement on climate change.
Along with many loyal customers, the initiative attracted thousands who have never purchased anything from Patagonia before. We’re encouraged to see the great interest from so many in making buying decisions that align with strong environmental values—and taking steps to get more directly involved as well.
1% For The Planet
Patagonia is a proud member of 1% for the Planet, an alliance of businesses that understand the necessity of protecting the natural environment, and are concerned with the social and environmental impacts of industry. If you’re a business owner, please consider becoming a member. By contributing 1% of total annual sales to grassroots environmental groups, member companies affect real change. To learn more, check out www.onepercentfortheplanet.org
Twenty years ago travelers were just beginning to think about the environmental impacts of their tours. Ecotourism became a catch-all term in the 1990s for making travel environmentally beneficial, and it was frequently cited as the fastest growing phenomenon in travel. Journalists tended to run with any reasonable stats they were given on this growing market, but the fact was that truly responsible travelers were a rare breed. It has taken 20 years to take this phenomenon mainstream!
Ecotourism was defined by The International Ecotourism Society (TIES) in 1990 as responsible travel to natural areas that conserves the environment and sustains the well-being of local people. As the founder of TIES, I found this basic definition a vital tool to manage perceptions of what tourism’s impacts are, how we might manage it differently in the future, and how to ask the industry to put a higher value on conserving the landscapes, wildlife, parks, people, monuments, and cultures that make their businesses possible.
Once I saw travel not as just a personal experience, but a way to touch the global community and help promote positive measures for conservation and sustainability, it became impossible to look back. Ecotourism influences a broad global dialog on the sustainability of travel which even led to a United Nations ecotourism summit in 2002. But for me the growth of the tourism economy has been the most important fact to help the global community understand its potential for good and the need to arrest the bad. This huge industry now generates over 10 percent of the world’s gross domestic product. And for 83 percent of countries in the world, tourism is one of the top five sources of foreign exchange.
Travelers are branching out around the planet, and the Internet makes it possible to book in any country, at any time. Volume continues to go up worldwide, and developing countries are seeing enormous growth. Tourists now spend over $200 billion annually in emerging market nations. No other sector spreads wealth and jobs across poor countries like tourism does, but no other sector grows with so few controls.
Vulnerabilities to the economy of tourism are always there. Security risks can cause drastic downturns, armed conflicts destroy tourism markets, and rising oil prices hit fast and hard. All of these factors will affect ecotourism in the next 20 years. I just returned from Egypt, and due to the current news cycle featuring some political unrest, tourist volume is down over 50 percent. This drastic reduction in sales is painful; huge investments are lost, and local businesses lay off workers. The harsh reality of a market-based product cannot be softened. No matter how one wants to present tourism as a positive force for sustainability, it is still a global market that cannot be controlled.
The profile of the ecotourist is changing rapidly. It was once assumed that the ecotraveler was a foreign visitor to exotic locales, dressed in khaki and ready to view wildlife by day and sit by campfires at night. Now, the ecotraveler has many profiles. Throughout the world, ecotravelers often visit rural and exotic locales in their own countries. Brazilians from Sao Paulo are a major market for parks in the beautiful mountains of Minas Gerais. Travelers from Dhaka in Bangladesh are the major market for the parks and reserves on the Bay of Bengal. Indian and Chinese travelers are a growing force in their domestic destinations. Ecotravel is no longer a reflection of a colonial past, it is a highly globalized market. It is dependent on neither backpackers nor luxury safari enthusiasts, but is a full spectrum of nationalities and demographics representing all ages and incomes.
In the last 20 years, sustainability and the environmental management of tourism have become a greater focus of the largest tourism corporations on earth. Systems to manage hotel waste, water, air quality, and energy conservation are standard procedure now among most major hotel brands. Travelers may see only that they are being asked not to waste their sheets and towels, but behind hotel walls, efficient systems for lighting, heating and air conditioning, and water conservation measures are being installed across the globe.
Ecolodges, once a rare phenomenon, have become a strong market trend worldwide. Frequently designed by inspired architects; ecolodges set the standard for environmentally sustainable lodging, using renewable energy, reducing waste, composting, growing their own organic gardens, and avoiding the destruction of native vegetation. Dozens of independent lodges now operate in the globe’s beauty spots, from Caiman Ecological Refuge in the Pantanal of Brazil to the Kosrae Village Ecolodge and Dive Resort in Micronesia. Tourism and travel awards are frequently given to chains of ecologically managed hotels that take their cues from the ecolodge movement, such as Six Senses, which operates in Thailand, Vietnam, the Maldives and Jordan. This company builds lodges using local sustainable sources wherever possible and serves organic food, helping travelers to appreciate the “slow life.”
There have been many global gains for ecotourism, but when it comes to aviation, we are talking about one of the most carbon intensive industries in the world, not an ecological strong point of this industry. The global aviation industry presently accounts for three percent of carbon emissions worldwide and is rising fast. With all known measures, including improved efficiency, emissions will nevertheless be up 175 percent in the next 20 years, particularly because of ever increasing numbers of long haul flights. At present, the EU is mandating carbon trading for aviation, but the global airline industry is fighting this tooth and nail. It seems few are worrying about the environmental threats of global aviation, so initiatives to manage the carbon impacts of air travel are difficult to advance.
Making ecotourism a genuine tool for conservation of the world’s ecosystems is a battle which never flags, but also never receives the needed unconditional support. For example, travelers without question are ready to pay for entrances to parks, and foreign visitors are frequently prepared to pay more than they do. Yet parks and protected areas around the world have been extremely slow in adopting measures to be certain tourists pay what is really required. How many times do travelers enter parks around the world without knowing how to pay? Ecotourism in the next 20 years must be a primary source of revenue for parks, and ecotravelers will be ready to pay.
Historic monuments also suffer greatly from a lack of wise management. In the Valley of the Kings in Egypt I was lucky to visit when few other travelers were present, but I was told that there are no limits on the numbers of visitors entering the ancient tombs, which are among the greatest monuments of human civilization. When I questioned whether there might not be a system to implement limits in the future, I was told I was dreaming. If Egypt or Cambodia or any other nation with major monuments cannot control visitor volume, the future of ecotourism is compromised. Traveler overload will damage these sites and they may eventually have to be closed. However, managers of Macchu Picchu in Peru have come to terms with this problem and set out a permit system to control the number of trekkers on the Inca Trail. Through this type of volume management, we can hope that ecotourism will be a positive for the world’s important monuments.
Travel suppliers are increasingly diverse. Small communities across the globe have sought to join the travel economy. We now call this community-based tourism. But often local communities do not offer the quality that travelers can embrace, and as a result do not find ready buyers. Helping these businesses has become an agenda for the ecotourism world, and investments in local community-based providers can help local people to maintain cultural roots and protect their environments.
In my current work, as the head of the Planeterra Foundation (http://www.planeterra.org ) we are investing in local community providers throughout Latin America. We are presently helping Mayan women in a small village on Lake Atitlan in Guatemala to build improved home-based accommodations. As travelers visit the community’s art and handicraft workshops, medicinal herb gardens, and tree-planting ceremonies, tourism is making a positive contribution to the community and creating a living example of the benefits ecotourism can generate. Planeterra can ensure these small businesses get a real market, as we are the foundation for G Adventures, the largest adventure travel company in the world. Wherever Planeterra invests, we work with G Adventures to be sure their passengers enjoy these wonderful authentic experiences that genuinely benefit local people.
Ecotourism has built an influential market base which draws customers committed to a green economy. Its market potential is not limited, but the resources upon which it depends are. One of the biggest issues with providing ecologically sound tourism will be the management of landscapes and regions where tourism has taken off. Authorities rarely have the knowledge to implement smart growth strategies, and the landscape quickly becomes overcrowded with hotels, restaurants and services for travelers. As tourism fans across the land, local services are frequently not provided to local workers who live without basic sewage treatment, fresh water, health services or adequate education for their children. It is difficult to advocate a more ecological future for tourism if basic sanitation and human needs are not met.
The Planeterra Foundation has developed a system for governments to track the impacts of tourism and make better decisions on the investment required to manage tourism. This system, already tested on Ambergris Caye in Belize, is being implemented further by the Belize Tourism Board and plans are now being made to work with other governments to help local authorities develop destination management systems needed to arrest unplanned growth.
What the ecotourism experience will be like in 20 years depends on the commitment of governments to create well-planned destinations. Without local planning, ecotourism could easily be just another problem on the landscape. Local people are increasingly recognizing that they need to protect their resources. What local people do to preserve their destinations must be a high priority for the future of ecotourism.
In Egypt I traveled to the Western Sahara. After one night in the large oasis of Bahariya, four hours west of Cairo, we had a soak in the crystal oasis waters and afterwards ate lunch in a simple building, decorated with local handicrafts and rugs, served by local guides. This was one of those authentic meeting grounds, where locals and tourists enjoy the same laid back experience of being away, sharing each other’s cultures, eating local foods, enjoying interesting indigenous handicrafts and honoring the beautiful place they are visiting without artifice. I found myself loving the Sahara desert, its timeless beauty, and the fun-loving nature of our local guides. I relaxed, got into the groove, and thought to myself, this is the future of ecotourism!
Article by Megan Epler Wood, who founded The International Ecotourism Society (TIES) in 1990, the oldest and largest non-profit organization in the world dedicated to making ecotourism a tool for sustainable tourism development worldwide. Since 2003, Megan’s firm Epler Wood International has devoted itself to aiding some of the poorest countries in the world with sustainable tourism development. Megan is presently the Co-Executive Director of the Planeterra Foundation where she is leading a global effort to scale up the community and environmental benefits from sustainable tourism.
Online and Terrace at L.A. LIVE, Los Angeles, CA
The Net Zero Conference is back. Join leaders in sustainability for Verdical Group's 8th annual conference and expo - the largest
Online and Terrace at L.A. LIVE, Los Angeles, CA
The Net Zero Conference is back. Join leaders in sustainability for Verdical Group’s 8th annual conference and expo – the largest in the world dedicated to net zero, decarbonization, and climate resilience. Topics include: Agriculture, Buildings, Energy, Fashion, Materials, Personal Care, Technology, Transit, Waste, and Water.
Measure. Validate. Act. The event convenes thought leaders, investors, regulators, policy makers, sustainability professionals and scientists online to delve deep into conversations about the impact that climate-related risks will have
Measure. Validate. Act. The event convenes thought leaders, investors, regulators, policy makers, sustainability professionals and scientists online to delve deep into conversations about the impact that climate-related risks will have on businesses and how management can respond. We will assess the best ways of measuring the exposure to physical and transition risk and how to improve disclosure and how to mitigate the threats from climate change litigation. The flip side of risk is opportunity – identifying opportunities to enhance and develop new products and services based on a better understanding of climate risk will play a big part.
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A 4-day virtual gathering to share insights into how climate change can affect
• Use Promo Code – GMJ10 – to save 10% when you register for this online event •
A 4-day virtual gathering to share insights into how climate change can affect investment portfolios and financial decision-making. The Great Repricing is a new event with 1,000+ financial advisors and industry professionals to discuss risks and opportunities surrounding climate change. We are bringing together leaders in science, business, and finance to share insights into the integration of climate risk in investment portfolios. This is event is presented by TheImpact and Gitterman Asset Management.
• Use Promo Code – GMJ10 – to save 10% when you register for this online event •