Four ESG themes to watch amid global disruption

CGWM's Patrick Thomas outlines ESG four sectors that will "come to the fore" amid covid-19 crisis

Patrick Thomas, head of ESG investing and investment director at Cannacord Genuity Wealth Management, has outlined ESG four themes that will “come to the fore” as a result of the covid-19 crisis.

While stockmarkets have seen some of the worst falls since the 1980s as the coronavirus begun its move across the world, forcing lockdowns in many countries in an attempt to limit its spread, Thomas said there are a number of ESG sectors where the “odds are looking up” in this crisis.

“The lock downs, home working, home schooling are all prematurely forcing us down a path the world was moving towards anyway. Remote working, remote learning, protecting these systems – these are all themes that have strongly come to the fore in the last few weeks,” he said.

Below he outlines four ESG themes he says will benefit from the move away from office- and school-based working and the wider disruption in society:

·       Education: “Schools, universities to tuition companies and night classes – educational establishments of all shapes and sizes are scrambling to keep their students plugged into their courses. And they’re using online educational tools to allow them to do this. As an investor, if education is something you’re looking at, then CPR Invest Education is one fund to access this theme, as is Baillie Gifford Positive Change.”

·       Cyber security: “With increased home working comes increasing online threats. Organisations have a duty of care to lock down their systems and make them as secure as possible. Cyber criminals are looking for new opportunities to exploit this ‘new norm’ and cyber security solutions are going to be key to help us protect ourselves. If investors are interested in the issue of cyber security and the protection it can give to society, they could take a look at L&G’s Cyber Security ETF, iShares’ Cybersecurity and Tech ETF and Pictet, which has an active fund focused on cyber security.”

·       Affordable healthcare : “it goes without saying that healthcare will be an extremely important theme for us all in the coming months – from vaccines and tests through to ventilators and protective clothing for healthcare staff around the globe, healthcare will be the sector which will provide the solution to the crisis we are all in. For investors, funds to look at are Candriam Oncology Impact and BB Healthcare.”

·       Cloud computing: “Thank god for the cloud. It is why massive organisations have been able to mobilise their staff to work from home in a very short space of time. It will help us minimise the impact on economic productivity, at a time when sectors of the economy are being hit very hard indeed. For investors, First Trust Cloud Computing ETF is probably the purest way to express the theme.”


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...