As Nordic investors slowly emerge from several cosy weeks of Christmas languor and overindulgence, a sobering reality awaits. Double-digit sub-zero temperatures aside, the landscape looks quite bleak in other ways, too. All this war talk sounds extra harsh after the brief ‘julefrid’1 we’ve just experienced. On top of it, markets have had the bad taste of plunging towards freezing territory at the beginning of January, too. Not the best way to start the new year, admittedly. With twelve yet untarnished months stretching luxuriously ahead of us, though, there is plenty of time to climb out of the slump and achieve great things.
In Sustainability land, as everywhere else, new beginnings inevitably entail predictions and projections. Trend spotting is trending; prophets are busy gazing in their crystal balls – you know the drill. “2024 will be the year of…” “Four/six/ten trends shaping sustainable investing’s future in 2024.” “Top ESG themes to watch for in the new year.” Etc.
And so, I might just as well throw my lot in the mix. Unfortunately, I haven’t inherited even an ounce of my mother’s uncanny ability to read the future in the patterns at the bottom of a coffee cup, nor her confidence when delivering a good prophecy. Surely, though, I could offer a few humble guestimates of what might come to pass, seasoned with a dash of wishful thinking. Here are three (like all good things) off the top of my head:
- Armed conflicts in our close vicinity have, in the past couple of years, sent many investors soul-searching, reassessing the sustainability of the defence industry and pondering on the true definition of human rights. Could politics trump geopolitics in 2024, though (pun intended)? Voters in forty countries, representing 41% of the world’s population, will go to the polls in 2024. What will this year of elections bring? Yes, populism is still on the rise. Yet, it is also old news. Populist leaders are no longer a wild card that voters would pick just to spite the establishment. We’ve seen them in action now and know just the extent of damage they can afflict on anything from democracy to rainforests. With any luck, it has made us wiser.
- The dread of upcoming fuzzy and convoluted sustainable reporting requirements has weighed heavily on investors’ minds for years. Now that the dust has settled somewhat and we’ve all become more comfortable with a new set of acronyms like SFDR, PAIs and DNSH, may we finally be able to focus on something else? I am all for disclosures, and no one can deny the importance of measuring and reporting, yet all the bureaucracy it entails does tend to kill some of the passion that is at the heart of sustainable investing. Hopefully, this will be the year when investors engage in more climate/nature/social action and less paperwork.
- We have all, by now, had a brush with AI, be it tentatively conversing with ChatGPT or going wild on Midjourney. While most of us are just having innocent fun, many a pundit are scratching their heads trying to figure out how best to realise the upside potential of this powerful disruptive technology while reining in the possibility of disaster. Scary as it might seem, the recent rise of human-centred AI, aiming to augment human capabilities instead of replacing them, excites me. Perhaps in 2024, we can start making AI our accomplice. After all, we need all hands (and chips) on deck to help tackle the enormous sustainability challenges ahead.
Beyond politics, regulation, and technology, the one thing I can predict more confidently is that the new year will surprise us all, as they always do. Ultimately, I agree with the immortal words of Antoin de Saint-Exupéry: “As for the future, your task is not to foresee it, but to enable it.”
1. Julefrid, or Christmas Peace, has its roots in 13th-century Swedish legislation, building upon the Truce of God tradition. Tradition encourages people to be respectful and peaceful during the Christmas holidays.↩
