It does not matter if you are reading this on a train through Berlin or in an office in Beijing: the air around you is most likely polluted or even dangerous to your health. Exposure to air pollution causes one in six deaths worldwide, which is equivalent to around nine million people a year.
Fortunately, companies are making significant strides in developing new technologies to transform air quality in cities, and that is creating opportunities for investors.
Air pollution is just one of the many effects of urbanization, and cities are beginning to take action seriously. The city of Copenhagen has been prioritizing bicycles over cars for years, and not long ago the mayor announced his plans to ban new diesel cars from 2019. He has even looked at the wood stoves and boats that moored in the port. Other large capitals such as London, Paris, Madrid, Athens and Mexico City. They will ban diesel cars and vans in 2025.
The diesel emissions scandal has sparked misgivings and sales of new diesel passenger cars fell from 54% to 42% in the EU between the beginning of 2016 and the end of June 2017. Although the latest Euro 6 diesels meet all air quality standards, this technology is fatally wounded, and the new scenario offers a multitude of options for those who wish to invest in improving air quality and reducing emissions.
Disruptive technologies: an electrical revolution
Electric vehicles, still with relatively low adoption rates, are rapidly becoming cheaper and, according to some predictions, will be as cheap as conventional in 2025. Some car companies already have plans to launch new hybrid and 100% electric vehicles.
Generally, we do not take a position on specific car manufacturers or on whether or not a specific model will sell; We focus our analysis on suppliers of components and technologies for the transition to a global electric car fleet.
We are also finding interesting opportunities to invest in companies related to charging infrastructures for these vehicles, and we do it through our investment funds, but also as a company, since Jupiter Asset Management has become a company that consumes electricity 100 % renewable.
The current growth of electric cars is occurring at a time of profound adjustments in themix energy and our strategy invests in businesses present throughout the sector's supply chain.
Greater efficiency in fuel consumption: making what we have more efficient
The internal combustion engine will continue to be the protagonist of road transport for some time. Our strategy has exposure to businesses that, for example, manufacture catalysts, and lighter materials, which improves efficiency.
Changes in behavior: by bike or bus
Businesses engaged in public transport, such as the bus or train, have been part of our strategy for a long time, as well as bicycle manufacturers and equipment suppliers since, as in the case of public transport, bicycles are often the most efficient means of transport in the city.
In a world of limited resources in which more and more people live together, there are many important challenges in terms of the environment and sustainability. Fortunately, many innovative companies are seizing the opportunity presented by these challenges.
By Abbie Llewellyn-Waters is a fund manager for Jupit's Environment and Sustainability team