The UK has brought forward its ban on the sale of petrol and diesel cars to 2035 to meet its target of emitting virtually zero carbon by 2050. So what effect does policy change like this have on our investment landscape? Impact investing naturally focuses on businesses that address specific environmental or social goals. This has three key advantages:
- Sustainable businesses tend to be more efficiently run as they are more mindful of their resources
- Sustainable businesses are less likely to be affected by adverse regulation, policy change and customer apathy
- We all need greener energy and better healthcare so businesses that address these issues are in a strong position to outperform over the long term, buoyed by policy changes and changing global appetites
Announcements like this are an indication of the legislative tailwinds that are going to benefit certain sectors, as governments and consumers place more and more emphasis on tackling global issues like carbon emissions. Companies that lead with sustainable business practices and are focused on solving global challenges are naturally geared for longevity.