Finding sustainable opportunities in a volatile world

The world around us is changing quickly, and this naturally shapes the way we think about investing. Periods of geopolitical tension often make us hesitant. Buying equities at the onset of a conflict, such as the recent war in the Middle East, can be a difficult decision to make. For long-term investors, especially those with an interest in sustainability, there are plenty of reasons to feel optimistic.

One of the most encouraging trends in sustainable investing is the continued global shift towards cleaner energy. Countries want to reduce their reliance on fossil fuels and strengthen their own energy security, driving record investment into wind, solar and energy efficient technologies.

The recent war in the Middle East has served as a reminder for this transition: a record 400 million barrels of strategic oil reserves were released in March in an effort to stabilise energy markets. These developments have pushed energy security to the forefront, highlighting the vulnerability of the fossil fuel supply chains and the urgency of transitioning to renewable local sources.

Technology is also playing a central role in shaping a more sustainable future. AI, for example, is enabling energy optimisation and emissions reduction across many sectors of the economy. We are seeing strong demand for AI from smarter grids and emissions tracking to climate resilient infrastructure. Yet AI also increases demand for energy-hungry data centres, so it is important to understand the entire value chain.

Beyond technology and energy, demographic changes are creating new long-term opportunities. Populations are ageing, particularly in developed markets, which supports demand for healthcare innovation. At the same time, around 1.3 billion adults worldwide still lack access to basic financial services, disproportionately affecting women and low-income households. Companies working to improve financial inclusion are helping people build health and financial resilience while tapping into fast growing markets.

In today’s volatile world, a sustainable investment approach can help investors focus on businesses that are adapting to complex supply chains and contributing positively to society. These businesses tend to be better managed, more forward-looking and aligned with long-term trends.

By staying diversified, patient and purposeful, investors can target attractive long-term returns while supporting the transition to a more sustainable global economy.

Fund Manager for the Quilter Cheviot Sustainability Opportunities Funds, Claudia Quiroz, shares examples of companies at the forefront of sustainable investing, “We look for companies making real progress by assessing their environmental footprint, decarbonising strategies and use of renewable energy. For example, EDPR is expanding wind capacity across Europe and North America, whilst Emerson Electric provides intelligent energy management systems that help other businesses run their operations more efficiently. Nvidia designs chips that reduce energy demand in data centres, whilst Schneider Electric supports data centres worldwide with advance power and cooling solutions.”

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.