With world populations forecast to reach 7.8 billion by 2050 ( source UN ) and the global middle class expanding by approximately 150 million people per year ( source Brookings Institute ) demands for goods, products and services will continue to grow. All economies benefit from global GDP growth and we do not seek to penalise firms delivering sustainable growth. Such an insatiable demand must be met with the finite resources available. Those companies able to deliver greater value from more efficient use of resource to service this demand will emerge as the most economically and environmentally sustainable.
Core to the Osmosis philosophy is to target investments across the breadth of the economy. Addressing supply is a myopic and a fruitless endeavour unless demand is also equally addressed. Consumption is not confined to a single section of the economy. The Model of Resource Efficiency portfolios address both the supply and demand side of the consumption equation as they target the most efficient corporates throughout each step of the value chain across the breadth of the economy.
This philosophy is ultimately self-fulfilling. When capital is allocated in significant scale through a process of natural divestment from the most inefficient to the most efficient companies, we believe that markets will force up the cost of capital for those inefficient companies. This should ultimately pressure change from management to adapt their business models or they will risk being further downgraded by the market. We aim to ultimately prove that the capital markets will play an important role in transitioning the world’s corporates to become more sustainable.
Critically, Osmosis identifies the results of management behaviour, using only objective data, rather than focusing on the bluster of management intent. Identifying action over intent positions the Model of Resource Efficiency portfolios to those management teams who are successfully implementing a more sustainable approach. The Osmosis data evidences that such behaviours are rewarded by the markets for their proven ability to aggregate greater value from their resources.