AIQ: The Tech Edition

Technology firms are often favoured by ESG funds because of their ostensibly clean, asset-light business models. But investors need to look deeper and challenge unethical and unsustainable practices across the industry, argue Louise Piffaut and Charles Devereux.

No single technology is enough to tackle the climate crisis, a global and systemic issue that requires joined-up thinking. We flag different pathways to address warming gases in the atmosphere – five nature-based and five technical – and ask what steps are needed next.

The tech-driven trend toward direct-to-consumer is transforming consumer brands, their intermediaries and their marketing. Intimate relationships with customers and new shopping experiences are alluring, but companies must tread a fine line between hyper-personalisation and intrusion.

Quantum computers have the potential to shake up finance, cybersecurity and other sectors. But investors hoping to profit from the new technology must be patient – and separate reality from hype.

Like Washington and Brussels, Beijing is worried about the growing power of large technology companies. But China’s regulators are taking swifter, more radical action than their peers in the West.

Facebook, Twitter and other platforms are drawing criticism for their failure to tackle hate content. But will the hit to their reputation do any lasting commercial damage?

Regulatory authorities around the world are targeting the big US tech giants. However, while investors need to keep a watchful eye on developments, Big Tech’s stranglehold and influence on numerous economic sectors will be hard to loosen.

The coronavirus pandemic has spurred companies to upgrade their digital capabilities, boosting productivity and creating investment opportunities in previously overlooked niches.

In these data visualisations, we look at whether COVID-19 will achieve something that millions spent on public health campaigning has failed to do.

In a two-part feature, we look at what asset managers need to focus their engagement efforts on to make a difference on anti-black racism, and why the industry needs to get its own house in order.

While the coronavirus pandemic has devastated livelihoods, it also presents an opportunity for companies and policymakers to reinvent the world of work. The future is full of possibilities – but no easy answers.

Globalisation’s image problem may have been further tarnished by the pandemic, but can political leaders use the crisis to reform it for the better and resist the urge to abandon it altogether?

Global politics are in flux as policymakers scramble to manage the pandemic and revive economies. Can Europe come together and carve a place for itself on the international stage, or will it end up a passive player buffeted by greater forces?

As the world starts to emerge from the COVID-19 pandemic, the US’s position as global hegemon will be under mortal threat from a resurgent China that looks to have escaped the virus relatively unscathed.

Commercial and geopolitical forces are threatening to fracture the internet into competing regimes, making it harder for companies to operate across borders and potentially limiting their growth. We explore the implications for investors.

While much of the world’s focus continues to be on tackling the COVID-19 pandemic, the climate crisis also requires urgent attention. The number of countries and companies supporting the move to a lower-carbon world is growing, but practical challenges remain. How can we build back better after COVID, and navigate to a cleaner, safer and sustainable world?

Emerging market debt investors need to keep a watchful eye on food price inflation as a potential key driver of monetary policy, especially as this has not coincided with a weaker US dollar, argues Nafez Zouk.

Like Washington and Brussels, Beijing is worried about the growing power of large technology companies. But China’s regulators are taking swifter, more radical action than their peers in the West.

Regulatory authorities around the world are targeting the big US tech giants. However, while investors need to keep a watchful eye on developments, Big Tech’s stranglehold and influence on numerous economic sectors will be hard to loosen.

The advent of tougher regulations after the global financial crisis led investors to think banks were safe. Was the Archegos scandal a wake-up call or much ado about nothing?

Deciding when to tighten the purse strings and hike taxes is complex at any time, and even more so when the economic fallout from COVID-19 remains unclear. Getting deficits – the gap between government spending and income – under control will need to happen eventually, but it would be a brave government that pursued such a goal now.

The market for sustainable bonds to fund activities that have a positive impact on the environment or society is booming. But there are many factors to consider before investing. Not least among them is a crucial question: is your money really being used to fund the activities promised?

Debate over the short- and longer-term consequences of COVID-19 dominated the Spring meetings of the International Monetary Fund, with our emerging-market debt team among those following discussions closely.

Deciding when to tighten the purse strings and hike taxes is complex at any time, even more so when the economic fallout from COVID-19 remains unclear. Getting deficits under control will need to happen eventually, but it would be a brave government to pursue that goal in the short term.

Massive intervention by central banks and governments in recent years has left investors struggling to value financial assets.

China’s economic rise threatens US supremacy and the global economic and financial order built up since 1945.

The inexorable rise in asset prices caused by the seemingly never-ending era of monetary easing is calling into question long-held investment beliefs, as members of our multi-asset & macro and equities teams explain.

The COVID-19 pandemic has highlighted the importance and fragility of the natural balance. As governments, companies and investors aim for a just transition, sustainable bonds are being issued at pace in different formats. Is it a fad, and do markets really need so many varieties?

Big challenges bring us the opportunity to think differently. Our investment teams reveal what they have learnt from COVID-19, and how they are preparing to face whatever ‘normal’ emerges in a post-pandemic world.

In these data visualisations, we look at whether COVID-19 will achieve something that millions spent on public health campaigning has failed to do.

Commercial and geopolitical forces are threatening to fracture the internet into competing regimes, making it harder for companies to operate across borders and potentially limiting their growth. We explore the implications for investors.

Impact investment strategies will have an important role to play if the green credentials of the world’s stock of real estate is to be transformed, argue Gregor Bamert and Stanley Kwong.

The green premium is an elusive concept. Laurence Monnier reviews the academic literature and crunches some numbers to try and quantify the extra pricing power afforded by more sustainable commercial properties.

Asset managers of many different hues claim they are thinking harder about their social role: the ‘S’ in ESG. But evaluating social value generated from investment decisions is not straightforward, as consultant Dr Kelly Watson from Hatch explains.

The inequalities highlighted by COVID-19 have led to much soul searching, including among investors on whether they are doing enough to address the issues of the day. Ed Dixon, Aviva Investors’ head of ESG - real assets, contemplates how investors in tangible assets can put capital to work to drive change.

The tragedy and destruction caused by the Blitz created an unintended natural experiment in urban redevelopment. Chris Urwin reflects on what this can teach us anything about agglomeration economies and the resilience of cities.

Unlike liquid markets and real estate, a lack of publicly available data has made assessing risk more challenging for infrastructure equity assets. Laurence Monnier considers the options for investors looking to complement qualitative assessments with quantitative rigour.

Herd-like lending behaviour is counter-productive and exacerbates real estate risks. Gregor Bamert argues a wider range of capital sources and investment approaches may help combat this in future.

Low interest rates, regulation and ESG risks are not new considerations for insurers’ investment strategies. However, the long-term fallout from COVID-19 is adding a layer of complexity they will need to adjust to.

In our monthly visual series on topical data themes, we look at whether Bitcoin could be the new gold, if COVID-19 has put pressure on London office rents, and the extent to which transport affects the carbon footprint of foods.

Talent, clusters and scale are three key reasons why Paris is one of the world’s most attractive office markets, explain Souad Cherfouh and Chris Urwin.

Too much emphasis on geographic and sector diversification within real estate portfolios can hinder alpha generation. More focus on lease length, asset quality and other factors is a preferred means of reducing specific risks whilst allowing specialisation, argues Tim Perry.

We take a visual approach to highlight why Copenhagen is such a rich, vibrant and economically prosperous city.

In the first of a new monthly series, we take a visual approach to illustrate topical data themes in economies, markets and beyond. This month we look at the correlation between stock market performance and vaccinations, the illiquidity premium in real assets, and whether there are still more men called Dave running funds than female managers.

Our Head of ESG, Ed Dixon, recently joined Blackstock Consulting on a PropCast episode to launch their new series of ESG insights with industry leaders. Together, they discussed how the government needs to be partnering with businesses to reach their climate pledges, how the “green premium” is yielding higher rents for eco-friendly offices, and much more.

More countries are contemplating their visions for a lower carbon world. Norway has excluded fossil fuels entirely for heating buildings, while others are taking a more nuanced approach. So, what are the options for those with environment at the heart of their agenda?

The UK government says nuclear energy may have a vital role to play in cutting carbon emissions. However, more detail is needed to help investors assess nuclear technology’s ESG credentials, argue Darryl Murphy and Stanley Kwong.

Now that the details have emerged on the remit and tools available to the UK Infrastructure Bank, meaningful engagement with industry should be the priority, argues Darryl Murphy.

In a wide-ranging interview with AIQ, the former UK minister of Energy and Clean Growth explains why the private sector needs a seat at the negotiating table if the world is to solve the climate crisis. Words by Miles Costello.

No single technology is enough to tackle the climate crisis, a global and systemic issue that requires joined-up thinking. We flag different pathways to address warming gases in the atmosphere – five nature-based and five technical – and ask what steps are needed next.

The tech-driven trend toward direct-to-consumer is transforming consumer brands, their intermediaries and their marketing. Intimate relationships with customers and new shopping experiences are alluring, but companies must tread a fine line between hyper-personalisation and intrusion.

Quantum computers have the potential to shake up finance, cybersecurity and other sectors. But investors hoping to profit from the new technology must be patient – and separate reality from hype.

Regulatory authorities around the world are targeting the big US tech giants. However, while investors need to keep a watchful eye on developments, Big Tech’s stranglehold and influence on numerous economic sectors will be hard to loosen.

Asset managers of many different hues claim they are thinking harder about their social role: the ‘S’ in ESG. But evaluating social value generated from investment decisions is not straightforward, as consultant Dr Kelly Watson from Hatch explains.

In this month’s instalment of our visual series on topical data themes, we look at corporation tax rates, climate-related litigation and the ongoing misfortune of pubs.

Individual investors have long been derided for buying and selling investments at the worst possible moment. But recent events suggest this characterisation is outdated.

In a wide-ranging conversation with AIQ, the self-described “disruptive capitalist” whizzes through the highlights of a varied career and ambitions for his latest venture, the UK’s first consolidating pension ‘superfund’. Words by Miles Costello.

The focus on net-zero targets has intensified scrutiny on measurement and disclosure of greenhouse gas emissions. But carbon accounting is a young art, explains Dr Matthew Brander, senior lecturer at the University of Edinburgh.

A landmark legal ruling in the Hague has ordered Royal Dutch Shell to move faster to bring its emissions in line with the Paris Agreement on climate. Thomas Tayler, a trained lawyer and senior manager at Aviva Investors’ Sustainable Finance Centre for Excellence, assesses the fallout.

In the latest instalment of our visual series on topical data themes, we look at Tesla’s market cap relative to the European “Big Five” carmakers, the average CSR spending of FTSE 100 companies versus their procurement budget and the most common reasons for a CEO to leave a company.

While much of the developed world appears to be on the road to recovery, aided by the rapid roll-out of vaccines, the outlook for many poorer countries is far less favourable, says Ian Pizer.

As governments and companies strive to reduce carbon emissions and achieve net zero, questions are being asked about the role of natural climate solutions. We analyse differing approaches to offsetting and their impact on forest management.

Some companies have long sought to mislead the public about their commitments to sustainability, but greenwashing has become more widespread and sophisticated in recent years. Now regulators and investors are fighting back.

Companies cannot thrive without healthy and happy employees, consumers, and communities. Investors must use their influence with companies and other stakeholders to ensure the basic rights of these groups are respected.