Global sustainable outcomes - News & Views Q1 2020
Insights

Global sustainable outcomes – News & Views Q1 2020

This quarter has marked the end of the longest bull market in history after a decade-long recovery since the global financial crisis. Entering 2020, nobody would have predicted the “black swan” event that was to come, providing a lethal shot to both the financial markets and global economies.

Since a new SARS-(severe acute respiratory syndrome) related virus was first reported in Wuhan in December under the name SARS-CoV-2, it has dominated global headlines. Although markets have recovered from the initial sell-off, which was the fastest in history, uncertainty remains both in terms of the path of the virus and that of economic recovery.

The Global Sustainable Outcomes (GSO) strategy has navigated this crisis well, benefiting from our focus on quality companies with solid environmental, social and governance (ESG) credentials and financial liquidity. This saw the strategy falling -14.7% vs the MSCI World decline of -21.3% from 31 December 2019-31 March 2020 – an 8.3% outperformance.1

More importantly, several of our investments made a strong impact during this crisis. The largest sustainable theme within GSO is that of health, wellbeing and food security, accounting for roughly 27% of our holdings. This pandemic has served to highlight the importance of medical innovation and good health.

Medical technology has accelerated in recent years and this has been clearly on display during this crisis with the rapid progress made with both the development of vaccines as well as therapeutic treatments targeting the virus. The genome of the disease was mapped by mid-January and there are 70+ vaccine programmes underway. In the past this would have taken years not weeks to achieve.

Several of our healthcare holdings2 have made a positive contribution, including:

  • Gilead (a world leader in antiviral/antiinflammatory medicines): its specialist skills in developing anti-viral drugs means it has a key role to play in developing treatments for new viruses such as Covid-19. Gilead’s CEO also said any potential treatment would be affordable and accessible to all.
  • Thermo Fisher Scientific (the world leader in serving medical science): it developed a key diagnostic test to detect nucleic acid from SARSCoV- 2. Its products were also used by scientists to find evidence that the virus is genetically stable and therefore a good target for a vaccine.
Covid-19 has also served to highlight the importance of strong governmentfunded healthcare systems which provide quality healthcare to all. This is particularly relevant in the US which has huge inequality in its healthcare provision, which could widen further as unemployment rises. This supports the expansion of US Medicaid, a federal and state programme that helps with medical costs for the elderly, disabled and those with low incomes.

A core holding in the strategy, Centene, is the leading Medicaid-managed care provider and will play a vital role in expanding this programme to the broader population. Technology has also played a key role during this pandemic. With lockdown, employees are forced to work from home. Large cloud platform providers have had to meet the surge in demand for their services. A core holding in the strategy, Microsoft, has successfully done so, and not just for office workers but also students. My children have been successfully using Microsoft teams to conduct online lessons with their teachers and co-ordinate their learning. Governments have also been using such services to share Covid-19 dashboards with citizens and have provided key support to critical health and safety organisations such as first responders.

Improved levels of hygiene, meanwhile, have been critical in helping to slow the spread of Covid-19. Two of our holdings have played a key role here:

  • Ecolab is a leading microbial control expert whose hygiene and sanitation solutions for commmercial companies are key in supporting hygienic and healthy environments. Its solutions have helped ensure the enviroment for workers in essential services is clean and sanitary.
  • SGS SA is an industrial inspection, testing and analysis services company. It is offering the services of its network of experts in health and safety, hygiene, disinfection monitoring, emergency planning, training and hazardous waste management to support businesses navigating this crisis.
20 May 2020
Pauline Grange and Jess Williams
Pauline Grange & Jess Williams
Portfolio Manager, Global Equities & Portfolio Analyst, Responsible Investment
Share article
Share on linkedin
Share on email
Key topics
Related topics
Listen on Stitcher badge
Share article
Share on linkedin
Share on email
Key topics
Related topics

PDF

Global sustainable outcomes – News & Views Q1 2020

1 Columbia Threadneedle Investments, 1 April 2020.

2 Mention of specific stocks is not a recommendation to deal.

Related Insights

16 May 2024

Paul Doyle

Head of Europe ex-UK Equities

Positives for Europe, but the Middle East could be a headache

Inflation is a stubborn problem in the US due to labour shortages, but this is much less of a factor in Europe where activity is dull but likely to recover as the consumer is well supported.
Read time - 1 min
17 April 2024

In search of sustainability – following Highway 101

Travelling down the US west coast we met 25 companies in five days. Learn more about the tech and healthcare businesses shaping our future.
Read time - 3 min
28 March 2024

Jeremy Smith

Co-Head of UK Equities

The Good, the Bad and the UK Stock Market

After an exceptional 2022 the UK stock market reverted to type, underperforming in 2023. With money continuing to disappear from the market, two potential catalysts for change have emerged.
Read time - 5 min
20 May 2024

Steven Bell

Chief Economist, EMEA

Inflation falls: how far will interest rates follow?

Inflation is finally falling in the US, UK and Europe, but will we see greater dispersion in central bank actions?
Watch time - 4 min
17 May 2024

Catherine Joint

EM Corporate Research Analyst

Ukrainian corporates are making a comeback – but is it temporary?

Businesses are taking differing approaches to managing their debt, and as we approach the point where paused repayments will resume, markets are looking at the ability of companies to uphold them.
Read time - 3 min
16 May 2024

Paul Doyle

Head of Europe ex-UK Equities

Positives for Europe, but the Middle East could be a headache

Inflation is a stubborn problem in the US due to labour shortages, but this is much less of a factor in Europe where activity is dull but likely to recover as the consumer is well supported.
Read time - 1 min

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Funds and Prices

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Our Capabilities

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.