Key Takeaway: We enter the new decade full of promise for innovation and discoveries in healthcare, financial services and clean energy. Here are some of the top trends that impact investors should watch.
1. Financial Inclusion
With big tech companies including Facebook and Twitter looking at the financial inclusion space, central banks are also waking up to their role in reaching the underbanked.
For big public companies and even smaller ones, it’s going to mean taking a closer look at how they treat their own employees. If a company claims to be financially inclusive with regards to customers, how inclusive is it regarding employees?
The next year and decade will be about walking the talk.
Companies like PayPal, with a financial inclusivity agenda for employees as well as resources to execute on it, will have an advantage over fintech competitors or startups looking to cut corners or shortchange their own employees while claiming to save the world and make it more financially inclusive.
2. Sustainable Travel
Pinterest has identified “responsible travel” among its top trends and has projected that “tourism is reaching an eco-conscious crossroad.”
Earlier this year, l attended a launch event for Ever & Ever, which sells water in aluminum bottles, at a boutique hotel in Brooklyn. After the presentation, a lonely voice in the audience yelled out how becoming a more conscious consumer and traveler might help.
Over the next several years, big airlines and smaller startups will all face more scrutiny about how they manage their carbon footprints, water resources, plastics and human resources in terms of diversity, inclusion and fair pay.
3. Conscious Consumption
Beyond the travel industry, a huge polluter on its own, is the broader trend toward more conscious consumerism — where buyers make purchases based on how products are sourced and made.
Also, the fact that a lot of consumer products, like electronics, rely on never-ending production cycles is something consumers are learning about and beginning to reject. The manufacturing of consumer electronics makes up 80% of the total energy consumption of these products, and there are studies that show that continuing to use current devices rather than buy the latest update translates into significant energy savings.
As more consumers start asking questions about environmental impact, more manufacturers will have to rethink and adjust their practices.
4. Disrupting the Food Chain
The public market success of Beyond Meat and Impossible Burger have shown investors the promise of plant-based foods and the appetite consumers have for more environmentally friendly solutions and food products.
Over the next few years we’ll see more companies and technologies thinking beyond one specific product or solution. We’ll see companies and founders that are looking to disrupt entire food systems that are failing to fulfill demands of a new generation of consumers.
People want to have more food options in public spaces like airports, hospitals or government buildings. Consumers would like more transparency and accountability in how ingredients are sourced and manufactured.
We’ll likely see more regenerative agriculture, more food solutions inspired by space technology and solutions like Farm Fare that are aiming to bring data to farmers to target bigger corporate clients.
5. More Affordable Energy
Microgeneration of electricity and renewable energy will become more affordable for individuals.
Caio Bersot at EnergyRates.ca projects that solar and wind and the trend of micro-generation of electricity in individual homes will gain traction as it becomes more affordable.
Companies like Dandelion will help to make geothermal energy more accessible for individual homeowners.
These solutions will spur the transition of renewable energy from a luxury product to a more accessible, cost-saving tool.
6. Moving Beyond SDGs
While the United Nations’s guidelines have shown to be useful for impact investors, they’ve also demonstrated their limitations.
The next year and decade will be about refining the guidelines.
The Impact Multiple of Money (IMM), which was put together by The Rise Fund and Bridgespan Group, is another measure that can help investors to evaluate performance in this space.
Different types of investors like family offices, for example, will also have to define for themselves how to measure success and track reporting.
Another major development we’re likely to see is growing familiarity by investors of different asset classes in the ESG sector, as well as the embracing of these investments.
7. Move Beyond Gender to Include Broader Diversity
Gender equality and the inclusion of women on boards and founding teams has been a big theme over the past year and will continue to be an important agenda item.
However, as more investors recognize that diversity translates into more representative, better informed teams, we’re likely to see a bigger drive to redefine diversity beyond gender alone.
When it comes to diversity, there is still a lot of work to do and we shouldn’t limit this scope to gender alone.
8. Circular Economy
The promise of the circular economy will remain a dream if we don’t tackle broader, structural challenges of the recycling systems and address countries that are the biggest polluters.
Startups and companies that offer promising solutions that bring nations closer to a circular economy will see growth and traction in 2020.
More people are likely to join the ranks of mission-driven investors like Closed Loop Partners who are laser-focused on backing solutions as the urgency grows.
9. Corporate Activism
Corporations have seen the power of Greta Thunberg and other next-generation activists to affect change and criticize government-level inaction.
My prediction is that we will see more marketing campaigns and initiatives looking to politicize and leverage this consumer angst at new level.
This can easily backfire, if these slogans or campaigns are not backed by real action and a corporate set of values.
Can chocolate conglomerates really pretend to be activist, if they’re still unable to cut out child labor from their production chain?
10. Personalized Medicine
Breakthroughs in microbiome research, diagnostics and declining costs will help usher a new era for more customized approach and personalized data.
The Theranos blowback will die down and more consumers will be curious to find out what new solutions and technologies can tell them about their health based on increasing amount of medical data we’ll be able to acquire.
New developments in AI will also enable us to extrapolate and analyze that data in a more efficient way.
You won’t just be signing up for another DNA test via mail, you’ll be able to tell what it means to you specifically.
Investors who’ll be able to sift through the noise and really back solutions that aim to offer a more holistic approach to personal health will be the winners in this new era of CRISPR applications, quantum biology, and greater volume of medical data than we’ve ever seen before.
