Road to 2030

Climate change

Climate change, and the world's response to it, will profoundly alter the economy and society. Here we examine the multi-faceted impact on investments, which we divide principally into transition risks and physical risks.
The Road to 2030 project is an investment-led project designed to articulate possible visions of the future, and the key drivers behind those outcomes. We explore five key themes, one of these is climate change.

Managing risk—that is to say, building strategies that are resilient to events like these—is not easy. So what can investors do?

In Road to 2030, we take a practitioner's perspective aided by both internal and external experts to ask the ‘what if’ questions and consider major changes to the status quo.

Forecasting is difficult, especially about the future, but one can prepare for “the future that has already happened”.

The project is laid out in five overarching themes followed by a scenario at the end. At the very least, the Road to 2030 is a horizon-scanning and risk management exercise. At its best, it provides a foundational understanding of the main drivers that will transform markets over the next decade.

Because climate scenario analysis typically sits in the risk department, the opportunities arising from the transition to a low-carbon economy are much less widely discussed than the risks.​

How do we think about climate change?

The growing recognition of the severity of climate change is prompting global changes to production and consumption systems, in turn creating transition risks for a number of industries, as well as vast opportunities for industries able to participate in decarbonisation.

We use mindmaps to organise and articulate our thoughts about subjects that are conceptually complex, and below shows our theme climate change.

Road to 2030 - Climate change mindmap

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Debt

Road to 2030

Debt

The last four decades have seen an explosion in public and private debt growth around the world, facilitated by declining real and nominal interest rates and latterly by quantitative easing. Unexpected events like COVID-19 have merely accelerated the trend towards the debt build up.

Painting of a river of lava

Road to 2030

Scenarios

Our scenarios are designed to help stir the imagination and highlight areas of undiscounted change. They ask investors to think through the investment judgment they would make if certain conditions are fulfilled and therefore before the decision actually has to be taken.

The rise of China

Road to 2030

The rise of China

Predictions are straightforward to make but hard to get right. For Chinese​ economic growth, things have typically been a little easier, since GDP growth is an input into (rather than an output of) China’s planning regime. The success of that developmental system is why China’s economy has grown fourfold over the last 20 years, from the global number six to number two today.

Road to 2030 - Demographics

Road to 2030

Demographics

Demographic challenges by their nature take time to materialise and addressing them has always been difficult to prioritise within the context of an electoral cycle. Unlike the complex adaptive system that is the global economy, demographics is relatively straightforward to model, being largely a function of births, deaths and life expectancy. What is less certain, however, is the impact these trends will have on their respective economies, as the spirit of Thomas Malthus bears testament to.

Road to 2030 - Technology

Road to 2030

Technological disruption

Widespread technological disruption in multiple fields continues to challenge traditional industries and create new products. We think of technology not as a series of objects but as an enabler of the increasing abundance of goods and services, as well as transformations in the workplace, mobility and healthcare.

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Important Information

This communication is provided for general information only should not be construed as advice.

All the information in is believed to be reliable but may be inaccurate or incomplete. The views are those of the contributor at the time of publication and do not necessary reflect those of Ninety One.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

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