Increase in inflation: Key Investment Trends to blow the surge in 2022

March 3, 2022
By CSE

The Labor Department reported a historical high inflation in the U.S., with the growth in Seattle even higher. The Consumer Price Index, which measures the average change in prices for consumer goods and services over time, increased 7% across the U.S – the largest increase since 1981. In Seattle, prices climbed even faster, according to the earliest available data from the department’s Bureau of Labor Statistics.

 

In the Seattle area, inflation is heavily driven by the cost of food, beverages, and gasoline. While the cost of housing has been steadily increasing, the price rise now also extends to other less-volatile items such as used cars and trucks, household furnishings and appliances.

 

Understanding why the rate of inflation has risen so quickly could help clarify how long the surge might last. Companies who successfully implement sustainability practices are well positioned to navigate an inflation period and remain relevant in a changing world. Now’s the time for investors to stick with Responsible Investment strategies. 

 

Four investing trends that show exceptional promise for 2022:

 

  • Sustainability

Investment managers will be keen to push ESG themes further as part of their fund-allocation processes. By combining factors and ESG, investors can improve long-term performance, reduce risk, and increase diversification. While some companies will struggle with higher inflation, businesses with robust ESG practices have an advantage. They have integrated sustainability solutions into their practices and are well positioned to increase the value of their brand, as more consumers want to shop and work with ESG-focused operations.

 

If inflation does increase, there’s also a good chance that interest rates will rise. That means higher costs of capital more broadly. Companies with better ESG practices, however, tend to have a lower cost of capital and can access loans at lower rates.

 

  • Electric vehicles

The boom in sustainable investing will also extend to connected markets, with electric vehicles (EVs) perhaps best positioned to capitalise. Indeed, electric vehicles represent a crucial mechanism for governments, industries, and consumers to reduce their carbon footprints and meet formal clean-energy goals.

 

  • Artificial intelligence (AI)

Although still largely in an evolutionary stage, it seems likely that AI will make significant progress in 2022, positioning itself as arguably the most important and influential of the new wave of technologies currently transforming the world. Almost every major industry in every corner of the world is leveraging AI and increasingly intelligent machines to either complement the work being done by humans or replace it outright by providing a superior level of competency.

 

  • Cannabis

The cannabis industry nonetheless shows immense scope for growth in 2022. Arguably the biggest driver for this growth is the wave of legalisation actions for adult use and medical purposes across the United States. In its “Cannabis Market Projections for US & Canada: July 2021” report, Seattle-based cannabis-industry analytics firm Headset expected the US cannabis market to surpass $30 billion in 2022.

 

Do you want to measure your ESG performance successfully? Are you looking for ways to safeguard your business planning through sustainability? Keep up with the latest trends by enrolling in the Certified Sustainability (ESG) Practitioner Program, Advanced Edition 2022, Digital Version, on May 12-13 & 16, to get all the necessary tools for your future success.

 

For more information and Early Bird pricing, reach us at [email protected]

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