ESG changed my mind on…what brings about meaningful change

Columbia Threadneedle's Harry Waight discusses investing in healthcare and why he's cycling around London

In this summer series for ESG Clarity, members of the sustainable investment industry tell us how their thinking on this fast-moving industry has adapted over the years and what changes that has led to.

Here, Harry Waight, portfolio manager, global equites at Columbia Threadneedle Investments, discusses engagement versus avoidance, life expectancy and why he’s hitting the road on two wheels instead of four.

What has ESG or sustainable investing changed your mind about over the past couple of years?

From an investment perspective, I have become increasingly aware, over the past few years, of the power of engagement as a tool to drive positive ESG change in the world. This is due to an industry wide shift in emphasis.

 Historically, we have been focused on screening, avoiding businesses engaged in ‘sin’ sectors such as arms dealing and tobacco for example. Recently we have come to realise that, while there is certainly a place for avoidance, there is always the risk that this strategy ends up becoming too negative, or even means we could be shirking our responsibility as investors to bring about meaningful change in the world.

We now place as much emphasis on staying engaged with the end goal of driving positive change in companies, as we do on avoiding certain sectors. Sometimes you need to stay involved and work with businesses to bring about meaningful change.

Describe one thing about ESG or sustainable investing you’ve heard recently that has stuck with you or been particularly poignant.

Global life expectancies have doubled during the last hundred years, one of the most inspiring and remarkable humanitarian accomplishments in history, driven by decades of progress in medical science and public policy.

But one of the most shocking statistics I have become aware of recently is the alarming fact that global life expectancies have actually fallen recently for the first time in many, many decades. Global life expectancies declined by .92 years between 2019 and 2020 and by another .72 years between 2020 and 2021.

Of course, Covid-19 was responsible for much of this but in many countries, life expectancy gains had actually slowed and even occasionally reversed before the pandemic. Causes include overdoses of drugs like opioids (in the US), suicides driven by depression, as well as lifestyle-related factors like obesity and related ailments such as diabetes. This is a human tragedy, and one of the driving factors behind our investment in healthcare companies like Thermo Fisher that help make medicine more personalised and targeted.

This is part of the philosophical shift we have undergone in the past few years, moving from a primary emphasis on screening out harmful businesses, to a broader focus that proactively seeks out sustainability winners.

What changes have you made personally this year to become more sustainable?

One step I have taken is recommitting to cycling, as a healthier and a less carbon intensive way of getting around London. I have dusted off a bicycle gifted to me by my dad, purchased a helmet, and braved the roads of London. The experience has been a wholly positive one, and now I instinctively hop on a bicycle for all but the longest of journeys, whether I’m off to the supermarket, the gym or even commuting.

The statistics on cycling are remarkable: if you cycle instead of driving an average car for a five-mile commute each way, five days a week, for a year, you can save 1.4 metric tonnes of CO2 emissions! And it isn’t only the planet that benefits – studies have shown that regular cycling can decrease your risk of cardiovascular disease by up to 50%, as well as improving your mental health. People all over the world are grasping onto this trend, and we’ve reflected that trend in our own portfolio.