Please note: this article is more than one year old. The views of our CIO team may have changed since it was published, and the data on which it was based may have been revised.
Energy price volatility has had an obvious impact on ESG portfolios this year, but we also need to consider the longer-term dynamics around energy and commodity markets. Environmental, security and other concerns mean that we are now engaged in a period of energy transition and this will have long-term effects on asset allocation and risk management as well as individual security and sector selection.
We consider:
- Why this is a commodities “supershift”, not “supercycle”
- Differentiation in volatility between commodities and energy sources
- Concerns around technological development and linked commodities supply
- ESG approaches and the importance of expected future corporate developments
