Green
5 Drivers Behind the Sustainable Investing Shift
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5 Drivers Behind the Sustainable Investing Shift
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Against all odds, sustainable investing in the U.S. smashed records in 2020.
Estimated net flows reached $20.9 billion in the first six months alone—that’s nearly equal to the amount of new money invested in all of 2019.
What is driving the shift to sustainable investing? This visual dashboard from Raconteur explains five key drivers, from generational shifts to investors’ preferred strategies.
DRIVER #1:
Millennial Investors and Personal Beliefs
Interest in sustainable investing is booming across the general population. However, there’s a clear generational trend, as well.
While the portion of each group that is “very interested” in sustainable investing has shot up since 2015, this share is significantly higher for millennials.
| Year | General Population | Millennials |
|---|---|---|
| 2015 | 19% | 28% |
| 2017 | 23% | 38% |
| 2019 | 49% | 70% |
Another correlated trend emerges with this.
These days, investors are more likely to follow their conscience. Acccording to a recent report by Schroders, the majority of investors will not budge on investing against their beliefs, even if returns were theoretically higher.
| Level of Investment Knowledge | |||
|---|---|---|---|
| Would you invest against your personal beliefs? | Beginner | Intermediate | Expert |
| Yes, if returns are higher | 18% | 20% | 29% |
| No, I would not invest against my beliefs. | 82% | 80% | 71% |
DRIVER #2:
Top Themes of Interest
Powered by these personal beliefs, which categories are attracting investors? It turns out many investors are very interested in including environment-related themes into their portfolios:
- Plastic reduction: 46%
- Climate change: 46%
- Community development: 42%
- Circular economy: 39%
- Sustainable Development Goals: 36%
- Multicultural diversity: 30%
- Gender diversity: 30%
- Faith-based values: 24%
However, these aren’t the only considerations. Other themes that fit into broader ESG categories such as gender diversity or faith-based values make an appearance, too.
DRIVER #3:
Which Investor Groups are Driving Interest?
Now, we turn our attention to the specific groups that are responsible for the growing momentum towards sustainable investing. This may be surprising to some, but it is institutional investors that are leading the pack by far:
| Group | Share of Group |
|---|---|
| Institutional investors | 85% |
| Institutional consultants | 39% |
| Internal stakeholders | 30% |
| High net worth (HNW) investors | 19% |
| Politicians or regulators | 13% |
| Industry trade bodies | 6% |
This also disproves a common myth that millennials are the only ones interested in the sector. Institutional investors equally want to see a double bottom line: an ROI on their money, while also making the world a more sustainable place.
DRIVER #4:
Sources of Information
So where are institutional investors sourcing their information around sustainable investing? Sharing their ideas in like-minded communities, such as webinars and conferences emerged as the preference for nearly two-thirds of those surveyed in this group.
But how do investors know that their investment is truly sustainable? For this, 34% of global investors feel that third-party labels from independent organizations help lend credibility, and confirm that the chosen investment in question is indeed carried out in a responsible manner.
As more and more institutional investors are digital natives, a significant share of them are also beginning to use social media to influence their decision-making process—and some even rely on it as their key source of research.
DRIVER #5:
Sustainable Investing Strategies
We’ve left the best for last—armed with this knowledge and confidence, which sustainable investing strategies are the most attractive? Here’s how organizations are approaching ESG:
- Sustainability integration: 52%
- Negative screening: 50%
- Shareholder engagement: 31%
- Impact investing: 19%
- Positive screening: 12%
- Thematic investing: 5%
While negative screening—avoiding investments in “sin” stocks such as tobacco or fossil fuels—is still a popular strategy, actively integrating sustainability into one’s portfolio is emerging more front and center.
The Overall Trend of Sustainable Investing
The data makes clear that institutional investors are the main driving forces behind sustainable investment for the time being. But as millennials accumulate wealth, their values may naturally lead them towards more sustainable investment.
Another important point to note is that sustainable investing has been resilient to change. In fact, despite the COVID-induced stock selloff in early 2020, ESG leaders exceeded expectations.
While these drivers evolve over time, it’s clear that sustainable investing is more than having its moment in the spotlight—it’s here to stay.
Energy
Visualizing 10 Years of Global EV Sales by Country
Global EV sales have grown exponentially, more than doubling in 2021 to 6.8 million units. Here’s a look at EV sales by country since 2011.
Visualizing 10 Years of Global EV Sales by Country
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In 2011, around 55,000 electric vehicles (EVs) were sold around the world. 10 years later in 2021, that figure had grown close to 7 million vehicles.
With many countries getting plugged into electrification, the global EV market has seen exponential growth over the last decade. Using data from the International Energy Agency (IEA), this infographic shows the explosion in global EV sales since 2011, highlighting the countries that have grown into the biggest EV markets.
The Early EV Days
From 2011 to 2015, global EV sales grew at an average annual rate of 89%, with roughly one-third of global sales occurring in the U.S. alone.
| Year | Total EV Sales | CAGR |
|---|---|---|
| 2011 | 55,414 | - |
| 2012 | 132,013 | 138.2% |
| 2013 | 220,343 | 66.9% |
| 2014 | 361,157 | 63.9% |
| 2015 | 679,235 | 88.0% |
| Total sales / Avg growth | 1,448,162 | 89.3% |
In 2014, the U.S. was the largest EV market followed by China, the Netherlands, Norway, and France. But things changed in 2015, when China’s EV sales grew by 238% relative to 2014, propelling it to the top spot.
China’s growth had been years in the making, with the government offering generous subsidies for electrified cars, in addition to incentives and policies that encouraged production. In 2016, Chinese consumers bought more EVs than the rest of the world combined—and the country hasn’t looked back, accounting for over half of global sales in 2021.
EV Sales by Country in 2021
After remaining fairly flat in 2019, global EV sales grew by 38% in 2020, and then more than doubled in 2021. China was the driver of the growth—the country sold more EVs in 2021 than the rest of the world combined in 2020.
| Country | 2021 EV Sales | % of Total |
|---|---|---|
| China 🇨🇳 | 3,519,054 | 51.7% |
| U.S. 🇺🇸 | 631,152 | 9.3% |
| Germany 🇩🇪 | 695,657 | 10.2% |
| France 🇫🇷 | 322,043 | 4.7% |
| UK 🇬🇧 | 326,990 | 4.8% |
| Norway 🇳🇴 | 153,699 | 2.3% |
| Italy 🇮🇹 | 141,615 | 2.1% |
| Sweden 🇸🇪 | 138,771 | 2.0% |
| South Korea 🇰🇷 | 119,402 | 1.8% |
| Netherlands 🇳🇱 | 97,282 | 1.4% |
| Rest of Europe 🇪🇺 | 469,930 | 6.9% |
| Rest of the World 🌍 | 313,129 | 4.6% |
| Total | 6,809,322 | 100.0% |
China has nearly 300 EV models available for purchase, more than any other country, and it’s also home to four of the world’s 10 largest battery manufacturers. Moreover, the median price of electric cars in China is just 10% more than conventional cars, compared to 45-50% on average in other major markets.
Germany, Europe’s biggest auto market, sold nearly 700,000 EVs in 2021, up 72% from 2020. The country hosts some of the biggest EV factories in Europe, with Tesla, Volkswagen, and Chinese battery giant CATL either planning or operating ‘gigafactories’ there. Overall, sales in Europe increased by 65% in 2021, as evidenced by the seven European countries in the above list.
The U.S. also made a comeback after a two-year drop, with EV sales more than doubling in 2021. The growth was supported by a 24% increase in EV model availability, and also by an increase in production of Tesla models, which accounted for half of U.S. EV sales.
Tesla’s Dominance in the U.S.
Tesla is the world’s most renowned electric car company and its dominance in the U.S. is unmatched.
Between 2011 and 2019, Tesla accounted for 40% of all EVs sold in the United States. Furthermore, Tesla cars have been the top-selling EV models in the U.S. in every year since 2015.
| EV Model | 2021 Sales | % of 2021 U.S. EV Sales |
|---|---|---|
| Tesla Model Y* | 185,994 | 29.5% |
| Tesla Model 3* | 147,460 | 23.4% |
| Ford Mustang Mach-E | 27,140 | 4.3% |
| Chevy Bolt EV/EUV | 24,828 | 3.9% |
| Volkswagen ID.4 | 16,742 | 2.7% |
| Tesla Model S* | 15,545 | 2.5% |
| Nissan Leaf | 14,239 | 2.3% |
| Porsche Taycan | 9,419 | 1.5% |
| Tesla Model X* | 7,985 | 1.3% |
| Audi e-tron | 7,429 | 1.2% |
*Estimates
Share of total sales calculated using total U.S. EV sales of 631,152 units, based on data from the IEA.
Source: Cleantechnica
Tesla accounted for over 50% of EV sales in the U.S. in 2021 with the Model Y—launched in 2019—taking the top spot. Furthermore, the Model Y remained the bestselling EV in the first quarter of 2022, with Tesla taking up a massive 75% of the EV market share.
Despite Tesla’s popularity, it could face a challenge as other automakers roll out new models and expand EV production. For example, General Motors aims to make 20 EV models available by 2025, and Ford expects to produce at least 2 million EVs annually by 2026. This increase in competition from incumbents and new entrants could eat away at Tesla’s market share in the coming years.
Plant-based alternatives
5 Opportunities for Innovation in the Plant-Based Food Market
With the booming popularity of plant-based food, here are five innovative opportunities to reshape the industry and meet the meatless demand.
5 Opportunities for Innovation in the Plant-Based Food Market
From an increasing number of people claiming to be flexitarian to more alternatives product options hitting the shelves, the popularity of plant-based food has been skyrocketing—resulting in a consumer base that is far bigger than just vegetarians and vegans.
What’s more, plant-based meat has been called the “best climate investment” of late. It’s no wonder that the plant-based food market is flourishing—and it’s set to grow to $162 billion by 2030.
But to meet high demand, more innovation is needed to scale up and achieve these estimates. This infographic from the Very Good Food Company (VGFC) looks at five opportunities for innovation that could reshape the plant-based food industry.
#1: Protein Sourcing
Do you know where your protein comes from? Among the commercially available plant-based protein ingredients today, a majority are made from just 2% of the 150 plant species that drive the global food supply chain.
Of these, just 12 provide 75% of the world’s plant-based food. These statistics also leave out the 250,000 or more plant species that aren’t utilized in agriculture today—leaving plenty of room for exploration.
Discovering new sources of plant-based proteins could help expand product offerings, potentially boosting taste as well as texture.
#2: Protein Optimization
Before plant-based proteins can be used for mass production, they must be purified and turned into a protein concentrate. This is an important step, as the way they are made significantly impacts the texture and taste of the final product.
Proteins can be broken down biologically (using enzymes), chemically, or physically. Breaking down and separating proteins has a few benefits, from making them more soluble and improving their textures, to being able to retain fat better.
As a wide variety of proteins are being utilized for plant-based meats, more research is needed to make sure they’re processed optimally and efficiently.
#3: Formulation
For consumers looking to make the switch to plant-based food, how closely plant-based products resemble conventional meat can be a big draw.
Protein content typically dominates the conversation of plant-based products, but it is only one component. Fat, carbohydrates, and water equally play a role in the comparison of nutritional value and taste appeal.
For example, plant-based oils or nuts can offer substitutes for natural animal fat, while plant-based carbohydrates can come from legumes, whole grains, or starchy vegetables. Thus, the right formulation of these elements is key to creating a desirable plant-based product.
A deeper understanding of the molecular structure of conventional meat can help improve the taste, texture, and structure of plant-based alternatives.
#4: Processing
During the process of turning a plant-based product from bean to burger, these products have to be “shaped” into the appropriate forms using methods such as stretching, kneading, shear-cell processing, press forming, or extrusion.
These different methods produce unique textures and influence the nutritional value of plant-based products. But as the sources of plant-based proteins diversify, each type brings with it unique properties. This means the end result can turn out very different.
Streamlined manufacturing systems can be used to control and evaluate the production of plant-based products. Real-time monitoring and diagnostic tools help ensure that consistent and high quality textures and tastes are maintained throughout the manufacturing process of plant-based alternatives.
#5: Distribution
Compared to conventional meat, plant-based food has the opportunity to be more agile and reactive to market demands.
The COVID-19 pandemic was a clear indicator of this—as supply chain disruptions occurred across the conventional meat industry, it opened up doors for plant-based distribution to soar.
As the plant-based food market matures, consumers are seeking healthy options, more choice, and improved flavors.
Click here to learn more about how the Very Good Food Company is leading the plant-based boom with an array of great tasting products resulting from innovative research and technology.
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