As rethinkers, we aspire to bring together innovators, pioneers and change makers to transform the world around us. Our private Rethink Responsible Capital Symposium on March 12, 2018 will welcome Ms. Christiana Figueres, former Executive Secretary of the UN Framework for Convention on Climate Change (UNFCCC) and the driving force behind leading the world towards COP21, a global agreement on tackling climate change. Our keynote speaker, the Honourable Al Gore, is also a leading visionary in this space. He, along with David Blood, founded Generation Investment Management, (GIM) a firm dedicated to investing in sustainable companies to promote a healthy, safe and low-carbon society and we have been in partnership with them for the last decade. Our honoured guests alongside a panel of esteemed CEOs will discuss the new challenges arising from climate change and the way to navigate this new paradigm.

Investing for good and achieving returns

At Lombard Odier, we believe responsible capital is a core investment issue. If your goal is to achieve sustainable returns over the long term, then it is essential to consider how our economies, and the businesses that drive them, will develop over the same time horizon.

Today, our economic model is unsustainable. There are significant challenges coming from many different directions, including demographics and changing population patterns, climate change, increasingly scarce natural resources, growing inequality and the digital revolution. All of these things, and many others besides, will affect how our economies develop over time.

The climate change challenge

In thirty years, for example, how is the agricultural industry going to adapt to the challenge of feeding another three billion people as arable land and fresh water become increasingly scarce? And how is it going to do that in the context of a changing physical climate, and the tightening of regulatory frameworks designed to limit global warming? Consumer patterns are already changing in favour of healthier, more protein-rich diets.

The business models prevalent in the agricultural sector today will have to focus on dramatically improving their efficiency in order to remain sustainable in the long term. This could provoke seismic changes not just in terms of what food we produce, but also how we produce it, how we store it (and in what kind of packaging), and how we transport it (and the fuel used to power those vehicles).

What can investors do?

Given the scale of sustainability challenges we face today, investors have to ask themselves a few fundamental questions:

Are sustainability factors driving economies today and in the future?

What are the implications of this on the businesses operating within those economies?

How is that going to impact risk-adjusted returns over the long-term?

At Lombard Odier, we believe sustainability could have a real impact on long-term returns. As such, it is becoming increasingly important to integrate these considerations in any investment process.

This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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