One of our fund managers, Impax produces an excellent document at the start of each year outlining the themes that they feel are important for the next investing period (1-10 years). Impax are a fund manager focusing on sustainable investment, so there is a strong bias in their themes to sustainability.
Here are their themes for the 2024 report:
1. The transition to a more sustainable economy won’t be derailed
2. Political tensions create selective opportunities
3. Mitigating drivers of biodiversity loss will create new markets
4. Society’s challenges can be efficiently addressed through innovation
5. Artificial Intelligence can accelerate the transition to a sustainable economy.
This article is summarising Impax’s views on AI and the transition to sustainable economy.
AI could transform whole sectors and ways of work, possibly even ways of life, regulation will be needed to manage risks.
AI as an environmental solution
1. AI has been leveraged to accelerate and improve the development of environmental technologies. As an example, wind turbine maker Vestas is using an AI-drive system to improve wind farm design and maximise clean electricity generation.
2. AI is being used to optimise the efficiency of energy-intensive sectors like buildings and transport, reducing GHG emissions. Networks of connected sensors already help adjust building’s heating, ventilation and air conditioning systems and lighting. AI modelling can predict how energy may be used, reducing waste.
3. AI models have surpassed the ability of supercomputers to accurately predict the weather. See more in the report – that you can download below. Better weather forecasts can help agricultural output and, in extreme cases, save lives.
AI as a solution to society’s challenges
1. Healthcare: AI is already being applied to improve the accuracy of cancer diagnosis and predict different forms of cancer using genetic data and samples.
2. Healthcare: Drug makers are leveraging AI to speed up the drug development process as more accurate simulation and more precise patient identification should enable success or failure of drug trials more quickly.
3. Education: The likes of Duolingo, a leader in the mobile language learning market, use AI to deliver a more personalised learning experience and drive the continued refinement of its platform.
Challenges posed by AI
1. Risks from disinformation and deepfakes are real. (See link to Nick Kristof’s article about pornography being created from a single headshot, targeting children, teenage girls and celebrities - NYT paywalled probably).
2. AI products can already incorporate many sources of bias and discrimination and distort information with real-world consequences.
3. Agreement on rules and regulations are vital – with global standards to allay concerns that ‘machines could take over’.
By having a range of fund managers who are focusing on different approaches to investing, you will have a good exposure to this exciting new area of technology.
