In light of growing concern around climate change and natural disasters, one asset manager has said investors should be looking to place their money in improving human safety, an area it believes is worth more than $870.2 billion.
Natixis affiliate Thematics Asset Management has published a new white paper exploring the theme of human safety, recommending that investors adapt to long-term structural shifts resulting from climate change, as catastrophic events like Australia’s bushfire emergency become more common.
Thinking around human security has tended to focus more on man-made disasters, such as armed conflicts and human rights abuses, but the asset manager has insisted that threats following natural disasters are similar.
Thematics has estimated the group of companies that contribute to safety could be worth upwards of US$600 billion ($870.2 billion), with a combined market cap of more than US$4.5 trillion ($6.5 trillion), growing at a rate of 11 per cent annually.
With human lives at stake, demand is increasing for technology and services that can help people find secure locations and keep basic services operating “when the lights go out”, particularly in hospitals.
The report has pointed to notification and localisation technology as well as back-up power, renewables and storage.
The EU has legislated that over the next few years every country should implement a mass notification system, representing a US$100 million ($145 million) plus market opportunity, according to Thematics.
Frédéric Dupraz and Matthieu Rolin, portfolio managers of the Thematics Safety Strategy commented: “Adaptation to climate change is one of the long-term structural shifts that we see taking place today, and that we’ll increasingly need to face tomorrow.”
“The world, sadly, isn’t getting any safer. However, the rise of mass notification and localisation technology, among others, is helping [us respond] more effectively to the increasing threats posed by intensifying hurricanes and other major critical events.
“This, in turn, can offer investment opportunities that will help not only sustain the development of these tools and solutions but may also provide investment returns in the long-term.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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