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Long-term, structural changes are happening all around us, impacting the way companies make decisions, the way governments regulate and how consumers spend their money.
To make the best long-term investment decisions we need to understand the forces - or mega trends - rapidly reshaping our world. We believe that climate change, demographic and social change and digitalisation are giving rise to unprecedented technological innovation, which is advancing at an unprecedented pace.
We urgently need new innovations, systems, and approaches to cope with the seismic changes brought about by rising global temperatures as well as increasing social inequality.
Moreover, to maintain a company’s social licence, they need to actively manage their impact, positive and negative, on people and planet. This includes ensuring fair labour practices, human rights, health, safety and living conditions throughout the company’s supply chain. Implementing robust structures around wellness, diversity, equity, work-life balance, and more, in its own organisation is also becoming essential.
And consumers are increasingly putting their money where their mouth is. According to a study by McKinsey, products with ESG claims averaged 28% cumulative growth over the past 5-year period vs 20% for products that made no such claims (McKinsey, February 2023). Businesses thinking proactively and decisively about how to integrate sustainability into their operations from the start are likely to see faster growth and greater returns, alongside building a better world for future generations.
And the global challenges facing humanity are in many ways interconnected. Decisive action to combat climate change have critical economic and societal benefits including better community health, equity, and energy and food security.
Kinnevik is a long-term investor providing patient capital and operational support to passionate founders who build sustainable, transformative and successful digital businesses. Read more about our strategy and business model via the links below.