ESG and corporate governance research, ratings and analytics firm Sustainalytics has published a thematic research report titled, 10 for 2017: Investment Themes in a Changing World.
The report looks at the key drivers of 10 ESG investment themes that are expected to create new risks and opportunities for investors in 2017. In addition, the report profiles 10 companies, spanning seven countries and eight industries, that are poised to take advantage of these trends. The unifying threads of the 10 investment themes include:
Rising concerns over data security
The report examines the market opportunities associated with blockchain, autonomous vehicles and cybersecurity, and highlights risks related to data security and privacy. Based on Sustainalytics' ESG research, BMW Group is well-prepared to comply with tightening regulations around self-driving cars, and Symantec, as a pureplay cybersecurity firm, is in a strong position to capitalize on the significant increase in projected cybersecurity spending.
Growing sustainability and market trends
The declining cost of solar power and the consumer shift toward plant-based proteins are also featured in the report. Pacific Gas & Electric (PG&E) Company is favourably positioned on solar through its generating facilities in California and residential installation products. Danone's historical focus on health and wellness also provides a strong platform for growth into plant-based proteins. Trends such as value-based drug pricing, energy storage and workforce diversity are also explored.
Improving corporate transparency
Sustainalytics' report assesses the increasing focus of European regulators on tax avoidance and calls for more transparent corporate tax reporting. The potential impact of US regulations around executive pay disclosure are also covered, with Noble Energy highlighted as an early discloser of its CEO to median pay ratio.
"Given changing consumer preferences, the relentless pace of technological development, and more regulatory and investor calls for enhanced corporate transparency, the investment themes we outline are likely to present upside opportunities in the years ahead," says Doug Morrow, (pictured) associate director of Thematic Research at Sustainalytics. "From our perspective, companies that exploit these trends are in a favorable position to deliver long-term value for investors."