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The closer you look, the more you see

The closer you look, the more you see
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ARTICLE TYPE
Sustainability Soapbox
TOPIC
Responsible Investing
PUBLISHED
July 07,2023
READ TIME
3 mins
AUTHOR
Georgina Laird
SHARE
Back
ARTICLE TYPE Sustainability Soapbox
TOPIC Responsible Investing
PUBLISHED July 07,2023
READ TIME 3 mins read
AUTHOR Georgina Laird
SHARE

Things are not always as they appear. Often a company’s role in creating a sustainable future is not clear at first glance, but a closer look shows its products are a key enabler of the transition.

Similarly, a company may not have the most world-changing products, but its practices – the ‘how’ it does things - are having a considerable positive impact on society. The Sustainable Growth pillar within our sustainable strategies looks for those underappreciated companies that we think have meaningful positive impact, even if it is not entirely obvious at first look.

 

One of the areas we continue to focus on is innovative and disruptive growth, which we believe is integral to addressing many of the sustainability challenges we face today. This can take various forms, although is often linked to the pace of technological growth. It is clear that electric vehicles and wind turbines alone will not secure a sustainable future – it is going to take much, much more. It will require strong innovation right through the value chain.

 

Technology is increasingly a vital enabler of many positive impact solutions. It can provide the essential components and infrastructure underpinning the green transition, meaning it can have both positive direct and indirect impact, the latter coming when products are used in downstream applications.

 

Semiconductors are a prime example. As the backbone of the connected world, we believe that semiconductor technology is an underappreciated force for good. Without it, there would be no internet or smartphones to connect us, or satellites to better understand our planet. There would be no electric vehicles, or advancement of medical technology that aid in the diagnosis and treatment of illnesses.

 

Semiconductors are synonymous with technological development. They help make the world smarter, more efficient, and more interconnected. A trend that will only accelerate if the current pace of development in artificial intelligence continues.

 

Another focus of our sustainable growth pillar is the rapidly evolving field of gene sequencing. Advances here over the past couple of decades have made sequencing faster, cheaper and more efficient, making it more accessible for a wide variety of end uses. It now has applications as diverse as healthcare, agriculture, forensics, with benefits to many areas of sustainability from food production to biodiversity.

 

Oxford Nanopore is a key essential enabler in this area. The company makes a novel generation of DNA/RNA sequencing technology that is changing the way we live and work. They have designed a unique gene sequencing lab that is compact enough to fit in a suitcase. That suitcase can travel to the fields in Africa or rivers in Asia, and help to test the environment in real time, directly informing actions to address biodiversity challenges. Scientists can now carry a (relatively) inexpensive lab in their backpack.

 

Oxford’s aim is to “to enable the analysis of anything, by anyone, anywhere”. Their MinION device has made significant contributions to research, environmental monitoring, medicine, and food and water safety. Oxford have also combined their technology with another sustainable growth Company, Nvidia, to deliver the fastest ever human gene sequencing sample in just five hours (and receiving a Guinness World Record) – a great example of first and second order impact working together.

 

These examples both highlight areas where core, innovative products go on to have significant and far-reaching impacts on many other applications. That, in a nutshell, is exactly what we are looking for in our Sustainable Growth pillar.

 

You can read more on the philosophy behind our sustainable strategies in the Aegon Global Sustainable Equity strategy Sustainability Report.

Important disclosures

More about the authors

Georgina Laird Senior Responsible Investment Associate

Georgina Laird is a senior responsible investment associate responsible for analyzing and monitoring environmental, social and governance factors within the firm’s sustainability-themed equity and multi-asset mandates, and engaging with investee companies on a regular basis.

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