Covid-19 has acted as a potential accelerator for environmental, social and governance (ESG) investing.
Even before the coronavirus crisis, the ESG market had grown rapidly in the UK.
In 2010 £5bn was invested in ESG propositions - this now stands at £20bn.
What's more, it's significant that investors who held strong ESG positions in their portfolios over recent months haven't been impacted any more than those who invest more traditionally.
Gone are the days when clients had to exchange their ethical beliefs for lower growth potential.
The pandemic has underscored the inherent value of ESG as a proposition. For advisers too, there's no doubt it will continue to influence corporate and client behaviour in the future.
There are three specific areas that stand to become more prominent owing to the make-up of the current crisis, all of which may well form a part of an advisers’ base-case for choosing funds they invest in on behalf of clients.
The importance of social factors
Social issues have arguably taken a back seat to governance and environmental issues in recent times.
But coronavirus has brought them back into focus, particularly through the lens of public health priorities and social care.
The social changes we've seen so far, and those yet to emerge. will have profound implications for companies and economic opportunity.
Investment in new healthcare initiatives and elderly care will rise.
So too will investment in healthcare technology, which largely works to make healthcare more efficient through better connectivity and the use of data analysis to improve access to medicines and care.
Education, sustainable tourism and social bonds are other areas we think will become more important for clients in the context of social change.
Education, particularly access to online education, will be vital if dependence on centralised institutions diminishes.
The education technology market could also increase the availability of education to underserved communities.
On global tourism, this is likely to remain curtailed for the time being.
This means sustainable, socially-responsible tourism will be essential to the economic recovery, as communities become more focused on non-detrimental tourism and more local travel.
This shift is likely to impact related sectors such as transport and accommodation. While these trends were underway before Covid-19, it;s likely the crisis will only accelerate the change.
A continued focus on the environment
2020 carbon emissions for countries and many corporations will inevitably decrease as a consequence of lockdown.
Those images that did the rounds of skylines around the world free of air pollution will live long in the memory, and may yet act as a wake-up call to governments to push on with their climate action plans.
Not only that, renewable energy, sustainable transport and biodiversity are likely to come into focus in the wake of Covid-19.
The safety and sustainability of public transport is now under question given its likely role in transmitting the disease.
The deferral of public transport use may lead to a commuter shift to new technologies such as electronic bikes and scooters.
While it may also lead to a mid-term uptick in car usage, it's likely that longer-term electric car use will win out as the environmental concerns around combustion engine vehicles remain.
Meanwhile, biodiversity, food production, agriculture and medicine may receive less attention from investors compared to climate change but are no less important in terms of market growth and opportunity.
The sustainability challenge thrown up in recent months in terms of supply chain issues could force governments and business to rethink how they deliver produce in a sustainable way.
Sustainability as part of the recovery
Covid-19 has demonstrated the importance of how companies operate.
Corporate management issues such as employee wellbeing and community relations are all under the microscope now, as are wider issues such as human rights abuses.
Investors are driving this change by using their influence to engage with the companies they own.
Sustainability is at the heart of the recovery plan for many governments too.
Governments in the EU, for example, are holding companies to account in their recovery. In Denmark, companies with tax haven registrations have been excluded from bailout and support schemes.
The good news in all this is the number of fund managers recognising the intrinsic value of ESG as a barometer of a good investment has expanded significantly.
True ESG is not just a greenwashing exercise.
This should mean clients with the goal of investing more consciously in opportunities to improve the world are well served.
The same goes for advisers that wish to offer ESG investing as an option to clients that want to do good with their money but perhaps hadn't thought of ESG before.