Like in a fashion edit, NordSIP has prepared for you a summary of the upcoming trends in 2025. Predictions or wishes? The frontier between the two is blurry, we’ll admit.
Trending UP
Artificial Intelligence – Starting safe! There is little change we’re going to be wrong on this one. No, 2025 isn’t the year AI will take over humans but its omnipresence will increase . We’ll be watching how the theme will be discussed at the upcoming World Economic Forum in Davos. Here is what transpired last year.
Name changes – While ESMA’s guidelines on funds’ names using ESG or sustainability-related terms has entered into force at the end of November, we still find several funds that are questionably named. We expect some of these incongruences to be corrected in 2025.
Orange & Outrage – As President elect Donald Tump takes possession of the oval office for the second time, we are poised to see more reactions to the nonsensical blabber he often offers his followers and now the entire US nation. It shall be our mission to skip the noise and focus on what it means in the short term and ensure that it doesn’t engender lasting damage in the long-term. Here is what asset managers predicted will be the consequences of the new presidency.
Trade Barriers – One of the biggest concerns of the new presidency, an increase in trade barriers between the US and China will of course have a range of economic consequences, not the least on inflation, which we thought was finally under control. Could there be a silver lining from a climate perspective? Trade barriers will could mean less transport and less GHG emissions.
Requirements – As an alternative to New Year resolutions, the trend is to adopt New Year requirements, as in the minimum standards we should ask for before committing to something. We should be more mindful and raise the bar for how we spend our time and money, what we put into our mouths, what comes out of it and what chemicals we include into our portfolios.
Staying STEADY
Biodiversity Investments – It would be great if we could put this one in the ‘UP’ list, of course, but steady is perhaps not so bad after all. We’ve noticed a significant uptick on the efforts of both asset managers and asset owners to map out their biodiversity footprint, at this year’s GIIN Forum for example, and we expect this upward trend to continue. To accelerate the trend, however, we still need more investable solutions at scale.
Regulation – This is both a wish and a prediction: we need regulators to continue their relentless work to limit the excesses of profits-at-all-costs entities. Carbon credits is one example in need of intervention. Fund classifications (think the good old article 6, 8 & 9) are also in need of a revamp. The list is long (see the DOWN list below).
Nuclear Energy – Whether we want it or not, nuclear power has become a credible alternative to coal-generated power and even tech bros have seriously started investing into it. This trend is likely to continue this year but, we hope, under the watchful eye of some more reasonable people.
Taylor Swift – There is not reason why the Swifty whirlwind shouldn’t continue in 2025. If only we could put her in charge of resolving the climate crisis, as the Laundromat suggested last year, we bet we could reach our goal much faster.
Wegovy & Ozempic – Another strong ‘UP’ of the past, weight loss drugs are here to stay, at least until we have enough perspective to find reasons not to take them (think: a lifelong tax?). Unfortunately, the alternatives to these drugs (fasting, exercise, etc.) remain more painful and that’s why healthcare is likely to continue doing well. What we hope for, however, is that food giants start taking responsibility for their junk and that investors will too.
Trending DOWN
ESG – It is true: this acronym has seen better days. If we need to get rid of it to focus on what really matter, then let’s just be done with it.
Water – With all the focus on GHG emissions and the energy crisis accentuated by geopolitical tensions, we seem to have forgotten the fact that water is becoming a scarcer commodity. Water risk is currently being underestimated by investors and regulators alike.
Car Batteries (in the West) – Clearly a hairy field, car batteries are not as simple to produce as expected, at least not for some optimistic mega-entrepreneurs in the North of Sweden. Whether EV-sales trends are going up or down, car batteries are still an important component but production is expected to continue to lag in Europe as well as in the US, while Asia will likely continue to lead.
Single-use Plastics – Ever heard of PPWR? Turns out this new piece plastic waste regulation was adopted by the EU in 2024 and will be coming into force at the beginning of this year. It is most likely the first step of a series of regulatory measures to reduce single-use plastics as we have been able to notice that entrepreneurial ventures alone won’t change habits. Perhaps, finally, we’ll be able to avoid clowns in toilets?
Lies – That is wishful thinking indeed. Perhaps it is just human nature to lie and cheat when the need arises. But we will be watching for lies and disinformation and there will be no pity for those playing ‘spin the bottle’.
Death – According to Björn Lomborg, the population of polar bears is increasing and people are not dying from the heat so much. We hope he’s right. There is also room for improvement in the geopolitical sphere and, perhaps, we can allow ourselves to hope for a positive outcome on the tragic conflicts that are still unjustly claiming lives every day.
