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AIQ Editorial TeamGlobal Investment Thinking @avivainvestors
In this month’s instalment of our visual series on topical data themes, we look at melting ice caps, the rising value (and volume) of ‘unicorn’ companies, and the hidden power of your pension.
How fast is the ice melting?
Ice is melting at an incredible speed, equating to a down payment on the cost of global warming. As shown in Figure 1, 28 trillion tonnes of ice melted between 1994 and 2017 – approximately two thirds of which has been caused by the warming of the atmosphere and the oceans.
Figure 1: Global ice loss (1994 – 2017)1
Source: The Cryosphere, January 25, 2001
The annual amount of melting ice has increased from 0.8 trillion tonnes in the 1990s to 1.3 trillion tonnes in 2017. To put this in perspective, one trillion tonnes is the equivalent of an ice cube taller than Mount Everest, while the amount lost over the entire period would cover the UK with an ice sheet 100 metres thick.
One of the key consequences of melting ice is global sea level rise, which increases flood risk. The ice loss over the study period is estimated to have raised sea levels by 35 millimetres.2 Urgent solutions are needed, as the rate of loss is now in line with the worst-case scenarios from the Intergovernmental Panel on Climate Change.
Is Apple worth more than 817 unicorns?
Privately owned start-up companies with a valuation of $1 billion or more are dubbed unicorns. However, what was once quite a rare occurrence (hence the mythical name) has become far more commonplace, with 817 unicorns globally.3
The list includes well-known names like online-learning platform Udemy, Uber rival Ola Cabs and social network Reddit, with valuations of $3.2 billion, $6.3 billion and $10 billion, respectively. Popular former unicorns include vacation rental company Airbnb and tech giants Facebook and Google.
Perhaps some of the current crop will go on to replicate their success. But it is also worth putting their current value in context: all the unicorns combined are roughly worth the same as Apple – currently the largest company in the world.4
Figure 2: Unicorns versus Apple (market cap)5,6
Source: CB Insights and Aviva Investors, September 2021
How to make your money matter
Many of us are making lifestyle changes to reduce our carbon footprints – including adopting vegetarian diets, switching to renewable energy and reducing the amount we fly.
Is our pension the bigger ‘superpower’ we could all use to reduce our respective carbon footprints?
However, there is a bigger ‘superpower’ we could all use – our pension. According to the latest Make My Money Matter campaign, the best way to make a positive impact on the environment is to align your pension to your values. Its campaign states that greening your pension is 21 times more powerful than all three changes mentioned above combined.7
Figure 3: The power of greening your pension8
Source: Make My Money Matter and Aviva Investors, September 2021
To put this in perspective, those with an average-sized pension who move from a traditional fund to a sustainable option can expect to save 19 tonnes of carbon per year, while people with a larger pension of at least £100,000 could save up to 64 tonnes of carbon. That’s nine years’ worth of the average UK citizen’s average carbon footprint.
There are about £2.6 trillion invested in pensions in the UK – an amount that could make a great difference if invested the right way.
