Billionaires like Mark Zuckerberg straddle the world like modern-day Alexander the Greats. Unlike Alexander, however, who was moved to tears when there were “no more worlds to conquer”, the Facebook CEO’s solution to a lack of new worlds was to build his own – the “Metaverse” – a limitless virtual estate populated currently by legless avatars (like some dystopian stag weekend in Brighton), promising a bizarre alternative to the real world in which we get to freely share our personal data with global advertisers.
For most of us investing into a pension, recent growth has owed most to the success of these Big Tech stocks – Facebook (now Meta), Apple, Amazon, Netflix, Google (now Alphabet), a collective formerly known as the “FAANGs”. At the end of last year, they had a collective market capitalisation in the trillions.
However, this year’s inflation shocks – war, China’s pandemic policy, energy market disruption – have knocked billions off the net worth of these tech leviathans. This has raised questions for ethical investors about whether investing in a vision of a virtual world is the best way to ensure we are building a better real world for future generations.
The reality is that beyond the limelight of the public markets, enlightened private investors, both individuals and now big institutional investors including pension funds, are focusing instead on the once-in-a-century wave of infrastructure development aimed at tackling the global crises in food, energy, supply chain and climate.
The idea that global markets would have the resilience to withstand shocks such as Russia’s invasion of Ukraine has clearly been found wanting. Governments are instead looking closer to home to find solutions to providing even basic resources, with an eye also to their national contributions to global carbon budgets agreed at previous United Nations COP summits. All of which creates new opportunities for investors who want to see their money making a positive difference to the world around them.
What are the new technologies investors need to understand, which are going to transform our local “real-verse”, enabling us to eat, travel and keep warm sustainably as we chat and play games, perhaps in the Metaverse?
In food production, the exciting technologies of vertical farming and climate-controlled agriculture are attracting large amounts of investment to provide food all year round and local to where it is consumed. This involves farmers swapping wellies for white coats and sunshine for LEDs (ideally powered indirectly by the weather in the form of solar panels and wind farms) and also dramatically reducing reliance on carbon-intensive fertilisers.
In transport, big investments are being made to replace fossil fuel filling stations with public electric vehicle charging, a necessary step to convincing people to ditch their diesels. There is also an urgent debate about how we use our limited land resources, not just to grow the food we need more sustainably (and cut the significant carbon emissions that process creates) but also to supply sustainable building materials such as timber. Crowdfunding – the people-powered investment phenomenon – has for the last decade or more been in the vanguard of these types of investments.
Record amounts are being raised in these new infrastructure sectors backing UK companies, including: OneFarm, using homegrown technology developed in Scotland to build one of the UK’s largest new vertical farms; EVC, installing and managing electric vehicle chargers at no cost to the sites hosting them, and Carbon Plantations, planting a new species of environmentally friendly, fast-growing, broadleaf hardwood trees that absorb CO2 up to seven times faster than native woodland.