Citi on ESG investments, green energy, renewable energies, cybersecurity
Large solar panels are seen at a solar power plant in Hami, China, May 8, 2013.
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From green energy to equal access to education and technology, investors can find opportunities to make money through these “unstoppable trends,” Citi explains.
Alternative and green energy is “very productive right now” when it comes to global trends, Ken Peng, head of Asia-Pacific investment strategy at Citi Private Bank, said at a conference. virtual press Wednesday.
“Governments around the world, from China to Europe to the United States, are focused on sustainability and putting money where they say it is,” he said.
But the industry “ran a little too hot” in 2020 as investors borrowed money, he said. In the months following January, investors exited their positions and this market fell 40% in May.
Now, he said, “I think this presents a very exciting opportunity to get on the bus for this trend that is likely to be with us for much of the next decade.”
David Bailin, chief investment officer at Citi Global Wealth, also said that over the next five to ten years, investors – especially younger ones – will place “huge emphasis” on sustainable and responsible investing, and not just on profits.
They will consider how companies treat the environment, employees and even politics will be part of their investment decision, he told CNBC on Tuesday.
He said the most important will be “unstoppable trends” such as climate change and social justice, including equal access to education and technology.
“These are all areas that I think will see unusual growth over the next five to ten years,” said Bailin, who is also the company’s global chief investment officer. “So those two things are going to converge and I think, create an opportunity for investors to make money by doing good.”
Such investments, called environmental, social and governance (ESG) investments, are increasing. Last month, BlackRock told CNBC that ESG investments could reach $ 1,000 billion by 2030.
Cybersecurity in the context of ESG thinking
The ability of companies to manage cybersecurity risks is also part of the whole ESG discussion, Bailin said.
“In my mind what you have is this unstoppable trend with the need for greater defense (which) results in higher spending in this area, it’s good for the people who make that kind of security. and you can invest in those, ”he said.
Last month, Colonial Pipeline was hit by a cyberattack that forced the company to shut down approximately 5,500 miles of pipeline in the United States, crippling gas delivery systems in the southeastern states.
At the same time, Bailin warned that such investments can present “substantial risk”.
“Remember that cybersecurity also has a very important military component,” he said.
“It is used not only by companies to obtain ransom, but by the military to destroy the infrastructure of their opponents,” he added. “So for us this is an area of continued concern, an increased concern – but also an area that is really investable.”