Missing the biggest populist movement of all

Saker Nusseibeh, CEO of Hermes Investment Management, has voiced the opinion that the public mood shift towards protection of the environment is the most underrated populist movement – and the most significant.

In the Hermes Q4 Note, Nusseibeh, draws attention to the fact that the IPCC’s report was covered at the top of every news channel – reflecting the public interest.

Philip Hammond’s Budget taxing plastics use in cups is the latest iteration of incorporating Governmental policy into regular discussions and legislation.

However, whilst it is relatively easy, Nusseibeh notes, to see how cutting back on the use of fossil fuels leaves oil giants with a “stranded asset” problem that can be modelled by calculating what is going to be left in the ground once limits on burning oil, gas and coal, have been established, it is less easy to model the business impact of a revolution in customer demand, taste and consumption.

From Hermes’ perspective, not enough attention is being paid to how significant this shift will be, not just for global retailers, but for entire supply chains too. For example, if society took the decision to change its defined contribution pension defaults to sustainable investments, it would have a far more significant impact over the long-term than any Government effort.

But this might be missing the point, the change is not about ESG investment, it is about the momentum that is changing society’s consumer habits. That is to say that it not about the effects of people’s choices – it is about the choices themselves and the implication that has for all sectors.

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