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SPRING 2020
#MENTION
THE RETREAT THE PENSION
FROM MEAT It’s time to talk about
The rise and rise where yours is invested
of lab-grown food
BLUE SKIES
THINKING
Using space tech to solve
Earth’s problems
GOING MICRO
How the smallest loans can
make the biggest difference
08
The start of a new year is when many people
complete their tax returns, spring clean
their homes and tidy their gardens. It is also
0 4 GL OB A L R E P OR T
Solving Earth’s problems with space
a good time to review your finances and
tech; cleaning up the stratosphere
investments. Are they orderly and well-honed
or in need of organisation?
Whatever their state, our Global Outlook 06 GL OB A L OU T L OOK
Tackling investment in an
article will help you consider the investment
uncertain world
opportunities in the year ahead and the
Richard
direction of financial markets. And do you
know how ‘clean’ your pension is? According 08 SE C T OR F OCUS
to our Wealth Briefing article, most of us How the aviation industry is rising
Charnock
don’t and we could be missing out on to the climate change challenge
putting our pensions to good use. In the
Responsible Investing section, we explore 17 20 10 INNO VAT ION
the rise in demand for meat-free and Saving the rainforest with
plant-based products and the resultant CEO / ABERDEEN satellites and smartphones
investment opportunities. STANDARD CAPITAL
From financial housework to galactic 1 2 R E SP ONSIB L E IN V E S T ING
cleaning, our Global Report highlights some Plant-based and lab-grown
of the tech companies trying to keep our food; microfinance in Asia
cosmos clean. We also examine how the
airline industry is attempting to combat
climate change, and the innovative brewer
15 B E H AV IOUR A L F IN A NCE
Fast vs slow money; choice
bringing clean water to Africa. Our article on paralysis and sleep nudging
the vintage watch market is worth a minute
of your time too.
I do hope this array of thought-provoking 1 7 B USINE S S & P L E A SUR E
The timeless appeal of vintage
features helps brush away the last of
watches in a digital age
winter’s cobwebs and puts a spring in your
step. Thank you for continuing to support
Aberdeen Standard Capital. 1 8 W E A LT H B R IE F ING
Why your pension investments
could help to save the planet
ANDREW PATRICK JAMES ASHTON JULIE-ANN ASHCROFT
2 0 G A ME CH A NGE R S
Portfolio Manager, Business writer and Head of Investments, How Brewgooder beer is
Aberdeen Standard Capital media commentator Aberdeen Standard Capital bringing clean water to Africa
Andrew Patrick joined the company As a former City Editor at the Julie-Ann Ashcroft joined
in 2016 after graduating from London Evening Standard and The the company in 2013. She
the University of Edinburgh. His Sunday Times, James Ashton has has more than 15 years’ 2 2 W H AT IF...
particular focus is impact research. unique insight into the workings investment experience and … the government funded a
Andrew is a CFA Charter holder. of the City and UK business. is a CFA charter holder. foundation year for retirees?
2 3
The big clean-up
There is an urgent need to protect space stations
and active satellites from collisions with the vast
amounts of debris accumulated in over 60 years
of space exploration. The European Space Agency
(ESA) believes there are approximately 900,000
pieces of debris orbiting around Earth – largely
from discarded rockets – and more than 3,000
abandoned satellites.
Earlier this year Holger Krag, head of the Space
Debris Office at the ESA, told the Financial Times
Galactic tourism grabs the that even a 1mm piece of space debris could have
a devastating effect on impact since it travels
headlines, but the first TripAdvisor at a velocity of 40,000 km per hour. He warned
“Even a 1 mm piece of space
review from Mars is a long way that without a major clean-up, in future the most debris could have a devastating BUZZ PHRASE:
off. We take a look at some cosmic cluttered areas in space would effectively become effect on impact since it travels at Space
no-go areas. Perhaps not surprisingly given this
developments closer to launching scenario, some companies have identified a a velocity of 40,000 km per hour” mining
commercial opportunity. Japan-based Astroscale,
RemoveDEBRIS project in the UK and Rocket Lab in The suitability of the different disposal methods It might sound like
the US, are three firms that have identified debris largely depends on the composition and size of a disco track, but
WORDS / DAVID BURROWS
removal as an increasingly viable market. the debris. The overarching question is not which ‘space mining’ may
ILLUSTR ATIONS / COEN POHL
The RemoveDEBRIS project uses a specially- disposal method is chosen but who will foot the bill. soon be a reality.
designed net to capture debris; while Astroscale’s Governments around the world are under pressure There is potential to
Space tech meets health tech modus operandi is to fire a satellite into space to take responsibility, but as things stand there is extract metals from
which then synchronises the motion of a piece of no official obligation for them to cover clean-up oxides in the lunar
debris. It then captures it and escorts it down into costs. But as congestion continues and dangers soil (such as iron,
the Earth’s atmosphere where both burn out. of collision increase, they may have little option. tungsten, aluminium
One of the great benefits of space technology is that and titanium) and also
scientists trying to conquer one challenge can end up use the abundance of
solving another – closer to Earth – at the same time. water known to be on
For example, the European Space Agency (ESA), The finale to a major event, be it These particles will burn brightly in the moon.
created suits with embedded biomedical sensors to the Olympic opening, New Year’s the atmosphere as they fall before These resources could
study how the human body responds to time spent Eve in Sydney or the closing act at disintegrating at about 60 km above be used to produce
in space. This breakthrough technology subsequently Glastonbury, inevitably includes a the Earth’s surface. According to
fuel for more distant
led to the development of a baby monitoring system fireworks extravaganza. ALE, the particles are made of non-
space exploration
to protect against cot deaths. But for event managers, how can toxic materials that interact with the
or to produce rare
The health sector is notably a frequent beneficiary you surpass what has been done air in different ways producing an
metals and minerals
of space technology. From ultra-light robots for before? One solution might be array of colours.
surgery, to slippers with GPS to track the movements Staging a to stage a multi-coloured meteor There are some technical
that are depleting fast
on Earth. We might
of dementia sufferers – the sharing and development
stellar show shower in the night sky. It sounds difficulties – notably getting the
also see another
of ideas are numerous and ongoing. Recently, the fanciful, but on-demand meteor ‘meteors’ into the right place at the
gold rush since the
UK Space Agency granted the company Adaptix £1m showers are exactly what ‘space right time. A spread of no more than
in funding to develop a portable 3D medical X-ray entertainment’ company ALE will 50 km (by the time they get to Earth) asteroid belt offers
machine. Scientists developing technology to monitor P-STEP (Personalised Space Technology Exercise soon be offering clients. is needed to make sure the meteor gold and platinum. It’s
stars in distant galaxies, realised that the equipment Platform) developed at the University of Leicester ALE has designed a satellite shower can be viewed from the estimated there is at
could be adapted to enable doctors a clearer view of steers runners and cyclists away from areas of high that will detach from a Japanese desired location. Trials planned this least $700bn-worth of
patients’ suspected tumours. The technology should pollution. By creating personalised exercise routes space agency rocket and, when it year hope to demonstrate this level mineral wealth in the
mean more effective treatment and earlier diagnosis. using Earth observation satellite data and artificial reaches its target height of 400 km, of accuracy and also quell fears that belt. Pardon the pun
For those looking to maintain a healthy lifestyle, intelligence, runners are reassured that their lungs generate meteors by releasing small the meteors might cause problems but ‘watch this space!’
space technology plays an important role too. The are breathing in cleaner air. particles, about a centimetre in size. for other spacecraft or probes.
4 5
GLOBAL OUTLOOK GLOBAL OUTLOOK
Market participants are pricing in
rate cuts over the next 12 months.
“ In times of upheaval, the backdrop of the virus, the Chinese
authorities remain incredibly vigilant
In Asia, central banks have already investors could also be and willing to act to stimulate parts
reduced rates. They have also of the economy if or when required.
provided extraordinary credit rewarded by diversifying
Diversifying in a
away from mainstream asset
facilities to allow local banks to
lend to struggling businesses. challenging market
Where next?
classes, into areas like How should investors position
themselves in this environment?
infrastructure, particularly
INVESTING IN
In our view, while the coronavirus Fixed income has bounced back as
outbreak will likely disrupt the investors have sought ‘safe havens’
global economy in the near term, renewable infrastructure” during the coronavirus outbreak.
we currently expect a short- But, if the epidemic does prove
AN UNCERTAIN WORLD
lived shock. If authorities can short-lived, we would expect very low
contain the virus soon, supportive returns from government bonds this
underlying economic fundamentals year, a large proportion of which have
should enable risk assets like yields in negative territory.
equities to rebound quickly. As for equities, at the time of
Markets roared into the new decade, capping a year of positive Monetary Fund has predicted That said, if it continues to spread writing, the prospect of central bank
the virus will shave 0.1% off global for a number of months, the impact table as the end-2020 exit stimulus had arrested the market fall.
returns. Since then, however, equities have plummeted, with many growth. However, given the potential on global growth could be significant. date approaches. We will need to see how this develops
indices closing out February with their worst week since the 2008 for supply-chain disruptions (China We expect market volatility to persist In the US, meanwhile, the in the coming weeks. As it stands,
Global Financial Crisis. Dominating sentiment were concerns about accounts for a quarter of global until the spread of the virus starts to presidential election campaign equities still offer the potential for
manufacturing), the damage could subside. Investors also need clarity will bring plenty of thrills and higher investment returns than
the coronavirus, with new cases reported around the world daily. be more severe. on the longer- term consequences for spills for investors – before bonds. In Europe and the UK, the
With the virus still spreading, the outlook therefore remains difficult In the US, the Cboe volatility index – global supply chains and consumer and after election day. Indeed, yield on almost all companies in
to predict. So, how should one invest in such an environment? aka Wall Street’s fear gauge – topped activity to calm their nerves. fragmentation and polarisation the FTSE 100 and Euro Stoxx 600
30 on 25 February, a five-year high. It In fourth-quarter earnings reports, will continue to define the political indices are higher than their domestic
usually sits at 20. Further, the banking many companies added a coronavirus spectrum in many key markets. corporate bond peers.
Lower your expectations global epidemic. There have been sector officially fell into a bear market: caveat to their guidance for next Of course, all this depends on how
At the start of the year, we had cluster outbreaks in South Korea, that is when share prices decline by year. Some firms have committed to Banking on governments the coronavirus and various stimulus
reduced our expectations for Italy and Iran, and the virus is now 20% or more over a sustained period providing an update in a few months’ for more support measures play out.
markets. However, we didn’t think present in at least nine European of time. The widely followed KBW time. However, there is little guidance As we highlighted, central banks In times of upheaval, investors
we were at the start of a prolonged Union member states and the US. bank index was down 20.7% from for the market to effectively price in around the world remain primed could also be rewarded by
market downturn. And then came The human cost is immeasurable, its January peak. this impact. to provide even more accommodative diversifying away from mainstream
the coronavirus. while the financial and economic The major developed market monetary policy to fight the effects asset classes, into areas such as
What started as an outbreak in costs are becoming more apparent. central banks said they were Keep your eyes on politics of the coronavirus and protect infrastructure, in particular renewable
Wuhan, China, has now become a As it stands, the International monitoring the situation and Moving away from the virus, and all their economies. But there are big infrastructure. There is huge demand
remained ready to act if needed. things being equal, we think politics differences in terms of the firepower to build out wind and solar farms, for
will remain a feature in 2020. The from which individual bank governors example, to combat climate change.
US-China ‘phase-one’ trade deal can draw. The transition in energy generation
prevented tensions escalating and From here, we expect governments will create winners and losers across
removed some of the existing tariffs to increasingly pick up the baton the global economy. Investors should
on goods. However, given that many from the banks and to provide fiscal consider how to position themselves
of the underlying problems remain stimulus. In the UK, there has been for this evolution.
unresolved, a ‘phase-two’ agreement much talk of infrastructure projects Diversifying investment portfolios
will be more difficult to achieve. In the and more money being spent in the in this way can potentially deliver
PHOTO: GETTY
UK, Brexit negotiations are under way. regions. Ahead of the US presidential attractive returns. They can also
The early mood music indicates that election, Donald Trump will do demonstrate resilience in the wide
talks will not be easy. The threat of a all he can to maintain America’s range of scenarios that could unfold
‘no deal’ Brexit could be back on the economic momentum. And against in the months and years ahead.
7
AVIATION SECTOR FOCUS
otherwise be destined for landfill Cutting carbon emissions By 2024, an 80-acre site
or incineration. It claims its output Last November, easyJet declared it
will reduce net greenhouse gases by would become the first major airline
just outside Immingham
70% compared with the fossil fuel to offset the carbon emissions from could become home to
equivalent, with up to a 90% reduction the fuel used for every flight. For Europe’s first plant to
in soot from exhausts. every tonne of carbon dioxide emitted
CABIN PRESSURE
during the 1,500 flights it operates produce jet fuel from
Flight shaming per day, it will make sure there is one commercial waste
Altalto cannot begin production tonne less in the atmosphere. easyJet
soon enough. Although air transport will achieve this through investing in
How is the airline industry accounts for only 2% of global man- schemes such as forest conservation
attempting to balance the made carbon dioxide emissions – in South America and wind energy Airlines are eager to switch to
50% less than the shipping industry, production in India. whatever works, as long as they can
demands of passenger incidentally – it is suffering from an “We recognise that offsetting is only be guaranteed that performance will
growth with increasing image problem that does not affect an interim measure, but we want to not be affected and the alternative
take action on our carbon emissions fuel is available in sufficient quantity.
environmental concerns? bigger fossil-fuel consumers.
Environmental campaigners now,” said easyJet’s chief executive
James Ashton investigates including Greta Thunberg equate Johan Lundgren, pointing out that his New materials, new fuels
flying less with saving the planet. In airline is already more efficient than Airlines also point to their investment
August 2019, the Swedish schoolgirl many of its rivals after reducing carbon in new fleets, which tend to be greener
sailed across the Atlantic on a zero- emissions per passenger kilometre by and more efficient. IATA predicts that
carbon yacht to attend a UN climate 34% since 2000. Lundgren says that new aircraft deliveries will reach a
conference in New York. Thousands the airline will continue to work on 10-year peak this year (2020), with
are following her lead. The initiative reducing its carbon footprint, while 2,100 new units due to be despatched.
Flight Free 2020, which wants people supporting the development of new Aircraft manufacturers have taken big
to pledge to stay grounded this year, is technology, including electric planes, strides to improve their environmental
already active in 10 countries.
FACTFILE to reinvent aviation for the long-term. impact. The Boeing 787 Dreamliner, a
For now, passenger travel is still Campaigners including Greenpeace long-haul aircraft which took its first
rising, with 8.2bn people forecast to are sceptical, and would rather airlines commercial flight in 2011, was designed
T
he Immingham Docks on the Humber board a plane in 2037 according to the Passenger miles
submitted to a frequent-flier levy to to be 20% more fuel efficient than the
2019
Estuary have been synonymous with International Air Transport Association deter unnecessary flying. Boeing 767 that it replaced. It is lighter
sea trade for more than a century. (IATA), up from 4bn in 2017. Many of because up to 50% of the aircraft is
Among the busiest cargo ports in the those fliers are the newly wealthy Beyond offsetting built using composite materials.
UK, they were originally built to export coal in markets such as China, where Not surprisingly, airlines favour Boeing competes closely
from the pits of Yorkshire and Derbyshire.
Now the facility buzzes with container
passenger growth exceeds 8%.
The aviation industry must prove 4.54bn investing in new technologies rather
than encouraging passengers to take
with Airbus, which is exploring
electrification with its E-Fan X model, a
2004
traffic arriving from all over the world. that while capturing that growth it can the train for business or leisure. hybrid aircraft expected to take its first
Yet just down the road from the docks, be part of the environmental solution, But those innovations can take years flight in 2021. In the test aircraft, one
plans are afoot for a new venture that not the problem. A decade ago, airlines to break through. In October 2018, of the four jet engines is replaced by
seeks to transform not sea travel, but air. adopted targets to mitigate carbon a Virgin Atlantic flight touched down a 2MW electric motor and a power-
If permission is granted this year, by 2024
an 80-acre site just outside Immingham
could become home to Europe’s first plant
emissions, including improving fuel
efficiency by 1.5% a year, capping
emissions from 2020 – essentially
1.99BN
Forecast
at Gatwick airport part-powered by a
fuel made from waste gas converted
into ethanol. LanzaTech, the US start-
generation system and battery unit.
“We see hybrid-electric propulsion
as a compelling technology for the
to produce jet fuel from commercial waste. through carbon-neutral growth – and number up behind the fuel, has been working future of aviation,” said Paul Eremenko,
Behind this vision is a company called reducing emissions by 50% by 2050 of global on it for 15 years and already has a Airbus’ chief technology officer, when
scheduled
Velocys, a spinout from Oxford University relative to 2005 levels. They are being commercial manufacturing facility in the collaboration with Rolls-Royce and
aircraft
which last summer raised £7m in a share pushed to go further, and some departures China which produces 16m gallons Siemens was announced in 2017.
placing backed by energy giant Shell and carriers are hoping their sustainable in 2020 of ethanol annually. Last year it The aviation industry appears
39.4M
the UK flag carrier British Airways. credentials will become a point of attracted another $72m in funding willing to change, but where the best
PHOTO: GETTY
The Altalto project takes residual difference for customers as well as and partnered with biotech firm solutions come from remains very
waste left over from recycling that would being the right thing to do. Novo Holdings. much up in the air.
8 9
I N NI NO NV AO TV IAOT NI O N INNOVATION
simultaneously reduce the planet’s
ability to absorb it.
“ We don’t take political sides, to ensure they’re not being used to
further deforestation.
While White’s phones have their we simply provide the data. It’s now becoming easier for
ears to the ground in the fight against companies, and investors, of all kinds
deforestation, other innovators Are the trees there or not?” to understand their impact. “If you’re
are sending their eyes high into the going to know your carbon footprint,
sky. Take Edinburgh-based start-up you need to be familiar with your
ONLY
Ecometrica, whose satellite-based the next step, he says, is launching its supply chain,” says Ryan Sarsfield,
environmental monitoring software own cube satellites. Latin America Commodities Manager
helped power Forests 2020, a £14m Of course, once you have all that at Global Forest Watch (GFW), a
15%
initiative from the UK Space Agency data you then have to wade through worldwide online forest mapping
monitoring 300 million hectares of it. Here, dramatic leaps in machine project from the WRI. “You can’t
tropical forest in Mexico, Ghana, learning, and the commoditisation calculate those numbers without
Indonesia and Brazil. of cloud processing and storage understanding the footprint of the
These are lands that are hotly by providers like Amazon Web OF GLOBAL land you’re buying from.”
contested. In Brazil, president Services and Google, have proven FOREST COVER As well as working with park guards
Bolsonaro has promised to legalise crucial. “Thanks to the rise of IS STILL INTACT in Uganda and indigenous groups
the work of the garimpeiros, illegal supercomputing there’s been a huge in the Amazon and Paraguay, GFW
gold miners who invade forest lift in terms of what’s possible,” says is currently beta trialling GFW Pro,
reserves in their tens of thousands to Davis. “Companies and governments a data platform tailored specifically
extract their riches. Local guardians can now get better information, at the to the private sector, adapting the
are losing their lives to defend the time they need it, for no more than tools and data to the context of
TACKLING
like petals. Like the forest itself, the The ingenious idea came from forest. Here, such unbiased data they’d pay for a financial accountant.” commodity supply chains that have
phones are always on. Listening, not Topher White, who set up Rainforest couldn’t be more critical. forest impacts, whether that’s palm
Corporate responsibility
DEFORESTATION
to nature’s timeless chorus, but for Connection, a California-based non- “It’s based on science, showing oil or soya beans. The key is to make
what’s rapidly destroying it. profit, and began trialling the system the actual state of affairs on The role of the private sector here it user-friendly, and to get it directly
According to the World Bank, the back in 2013 – at a nature reserve for the ground,” says Gary Davis, is key. Coming under growing into people’s palms. “The dataset
WITH TECH
world lost 1.3m square kilometres of gibbons in West Sumatra, Indonesia. Ecometrica’s CEO. “We don’t take pressure from regulation, activist may be absurdly large,” says Sarsfield,
forest between 1990 and 2016. We’re According to White, illegal logging political sides or get involved in groups, and investors and customers “but the people on the ground do a
now losing an area of forest the size there stopped within a fortnight. debates, we simply provide the data. who are becoming more aware, couple of clicks and their browser
From mobile phones strapped of a football field every minute. Trees The tech has since been deployed in So are the trees there or not? We corporations are realising that shows the images of deforestation
are felled for a range of reasons: the Brazil, Peru, Ecuador and Cameroon. provide a background factual layer for environmental stewardship is now and accompanying stats, even for the
to trees to satellite-based ‘eyes production of timber and paper; the “If you can protect the trees, you everyone else to draw from.” part of their story. Take Deere & Co, tiniest area of Western Paraguay.”
in the skies’, technology is being farming of cattle, soy and palm oil; end up protecting everything else,” the US-based machinery company, As the challenge of arresting
used in increasingly creative mining; and property speculation. White has said. Harnessing big data which has begun using telematics climate change advances, the task of
The World Resources Institute (WRI) Ecometrica pulls much of its data to track where its construction and forest maintenance, conservation and
ways to fight illegal logging reports that 30% of global forest Global consequences from a satellite from the European forestry machinery is being used, and restoration will only become more
WORDS / DAVE WALLER cover has been cleared, while another Indeed. The destruction of rainforest Space Agency’s Copernicus critical. Environmental accounting,
20% has been degraded. Only around is a tragedy on the local level, both programme, which updates its freely where companies account for the
F
15% is left intact. for the indigenous communities available global coverage every week. physical impact of their actions as
or thousands of years, the And so old smartphones are being who make their livelihoods there, Ecometrica’s platform uses that radar much as their financial profit and
Amazon rainforest has strapped to trees. Which is a more and its wildlife (forests are home to data to build high-resolution 3D loss, will become part of everyday
thrummed with a soundtrack of logical response than it may first 80% of the world’s terrestrial animal images (where each pixel covers an business practice.
bird calls, howler monkeys and seem. The sounds captured by the species). But the wider implications area of forest spanning 20-30 metres), “The technology is there,” says
Old smartphones
insistent drumming of cicadas. phones are transmitted to the cloud are changing the world. According showing activity like forest fires and are being strapped
Davis. “It’s just getting people to
Now, high in the canopy, for machine learning analysis. If it to the WRI, if tropical deforestation illegal logging in near real-time. If to trees. The understand what’s available, how little
hidden among millions of hectares detects the agents of deforestation, was a country, it would rank third in Ecometrica needs further data, it sounds captured it costs and what decisions to make.”
Photography: Alamy
of forest, these ancient residents have such as chainsaws or trucks, it carbon dioxide-equivalent emissions, pulls from other sources or gathers by the phones are But there’s a lot of government and
been joined by quieter neighbours: triangulates their position and sends behind China and the US. And when it itself. Davis calls it the “Netflix transmitted to the corporate will behind this. It certainly
cloud for machine
old mobile phones, strapped to tree the information to local forest rangers we destroy forests, we don’t just of geospacial”. As monitoring tech feels like a turning point. We’re just at
learning analysis.
trunks, with solar panels unfolding via a smartphone app. add carbon dioxide to the air; we becomes both cheaper and lighter, the start now.”
10 11
INVESTING THEMES : RESPONSIBLE INVESTING RESPONSIBLE INVESTING
“Companies are increasingly talking about climate
change in an operational context. Some are taking
this further with a truly mission-led approach
In 2006, the year that the UN
Food and Agriculture Organization aligned to specific UN Sustainable Development
reported that livestock creates 18% Goals. The resulting shifts in investment are
of all human-induced greenhouse
THE RETREAT
changing the shape of many industries, opening
gas emissions, Twitter was launched Julie-Ann Ashcroft
and Facebook membership reached Head of Investments up opportunities to invest in long-term structural
12 million. These two platforms, and Aberdeen Standard Capital
growth trends. In the consumer goods sector we
their younger sibling, Instagram, are seeing a number of start-ups, in addition to
FROM MEAT
have given people unprecedented
power to share ideas about
large global companies, focus their investment on
important issues such as climate producing plant-based meat and dairy products.”
change and how to mitigate it.
More recently, the influence
of social media has been
supercharged by campaigns such represents a huge opportunity Atlanta sold out within five hours
as Veganuary and a host of high- – according to a 2019 Barclays and a short time later it launched
profile celebrities promoting the report, the market for plant-based a Zero Chicken sandwich in the
benefits of a vegan lifestyle. meat alternatives is growing at an UK. Burger King launched the
In 2017, a Mintel report showed annual rate of 25%. Gone are the ‘Impossible Whopper’, a plant-
that 23% of the British respondents days when vegans and vegetarians based burger – and significantly,
had reduced their meat intake had to be resourceful in finding it doesn’t target the vegan market
for environmental reasons. By alternatives to meat. Alongside at all. The soy-based burger was
the time the Intergovernmental health-food stalwarts like Alpro, created to be as close as possible in
Panel on Climate Change (IPCC) Cauldron and Morning Star, many flavour and texture to the original
As more and more consumers opt for a meat-free or ‘flexitarian’ diet, demand for special report on climate was supermarkets – Asda, Iceland, Whopper and Burger King says it is
published in 2019, it confirmed Tesco, Sainsbury’s and Waitrose – aimed at ‘flexitarians’.
plant-based – and lab-based – meat alternatives is growing. But what’s driving this shift
what environmentalists, vegans now stock their own-brand ranges Venture capital firms and
and who are the winners in the marketplace? and vegetarians already knew: of meat-free food. corporate giants are ploughing
W
current human dietary habits place Fast-food chains have been millions into the plant-based food
hen UK bakery chain Treatment of Animals), but it reflects than a fringe movement? unsustainable demands on the slower to offer plant-based market; the Swiss giant Nestlé
Greggs teamed up a wider, global trend of a rapidly Fifty or sixty years ago, planet. The IPCC’s report said that alternatives to meat. This reluctance predicts that its business will be
with Quorn to launch a growing demand for plant-based vegetarianism was a choice for reducing our meat and dairy intake is partly due to industrial-scale worth billions in the next ten years.
vegan-friendly sausage food products, which Greggs had either ethical or health reasons; could reduce CO2 emissions by production making meat incredibly On a smaller scale, many other large
roll in January 2019, been aware of for some time. veganism went further in avoiding 15%. So changing our diet could be cheap. However, 2019 saw a companies see vegetarianism as a
nobody could have The vegan sausage roll proved any product that exploited animals. the most effective way to reduce massive seachange, kicked off by means of promoting their corporate
predicted the social media storm so popular that Greggs couldn’t including milk, cheese and eggs. our carbon footprint. Greggs’ vegan sausage right at the social responsibility; at corporate
that ensued. Some called it the keep up with demand during the While people still give up meat for start of the year. events meat is offered as an option
best news ever; others expressed first month, and in just under 20 ethical and health reasons, the rise Changing tastes Twelve months later, everyone alongside the vegetarian menu,
unmitigated disgust, with weeks both Greggs and Quorn in demand for non-meat products is The global food industry has has upped their meat-free game. rather than the accepted norm.
accusations that the move was saw a significant increase in their also being driven by concerns about been swift to capitalise on this On the retail side, KFC’s test-run of By the time Greggs launched the
nothing but a ridiculous, politically share prices. Whether or not it was global warming. shift in consumer preferences. It ‘Beyond Meat’ chicken nuggets in vegan version of its ‘Steak Bake’ in
correct gesture. motivated by political correctness, Scientists and environmentalists January 2020, it caused a lot less
PHOTO: GETTY IMAGES
Greggs’ chief executive, Roger responding to customer demand made the link between livestock furore, which suggests that plant-
Whiteside, said the move away for a vegan sausage roll proved a farming and global warming “In 2017, a Mintel report showed that 23% of based foods are definitely here to
from traditional meat-based fare business-savvy decision. But why
the sudden mainstream interest
some time ago, but social media
has played an important role in
the British respondents had reduced their stay. To quote the UK Vegan Society:
“It’s a simple fact, there is money to
was partly in response to a petition
WORDS /
ANGELA JAMESON POTTS from PETA (People for the Ethical in something viewed as no more boosting public awareness. meat intake for environmental reasons“ be made in vegan products.”
12 13
RESPONSIBLE INVESTING BEHAVIOURAL FINANCE
Small loans from ethical lenders can make a huge difference in the developing world
THE POWER OF MICROFINANCE
FAST MONEY
VERSUS
C
urrently, about 1.7 billion
adults worldwide have
SLOW MONEY
no access to mainstream Research by digital services group
financial services. Virtually Cognizant has shed light on consumer
all live in the developing attitudes to what it calls ‘fast’
world, with women money and ‘slow’ money: day-to-day
expenditure and future-focused
and those on very low incomes
investments. In The Future of Money,
accounting for a disproportionate
which included ethnographic studies
number of the ‘unbanked’. But
of UK and US citizens, it reveals
the impacts of exclusion aren’t what is shaping differing mindsets
just financial; they affect people’s regarding both spending and saving.
access to education, employment, Microfinance in South East Asia is enabling female People welcome how digitisation
healthcare and housing. Being has made it easier to manage
BRAIN TEASERS
entrepreneurs to set up and grow businesses
able to tap into mainstream fast money. They appreciate
financial services is also key to the Philippines, Myanmar, Tanzania, start employing people in the the convenience, efficiency and
reducing poverty. Loans and credit Uganda, Kenya, Rwanda, Nigeria, local community. accessibility of checking bank
balances online to keep track of
allow people to set up and grow Ghana and Sierra Leone. Estela, a customer in Nigeria,
functional spending such as direct From sleep nudging to hormone manipulation, the
businesses; this is particularly ASAI’s financial model is simple. started her building block business
important in the developing world, It offers short-term, small loans to with a family loan, but struggled
debits, and the services and goods latest developments in consumer neuroscience are
purchased with the swipe of a card.
where Micro, Small and Medium low-income female entrepreneurs to expand as traditional lenders However, people don’t feel the being scrutinised W O R D S / R I C H A R D R A W L I N S O N I L L U S T R A T I O N S / L E E M A R T I N
Enterprises (MSMEs) account for earning broadly $3.20/day and repeatedly turned her down. ASAI same connection with slow money,
I
90% of all businesses. other small business owners enabled her to borrow N25,000 whether that’s pensions, investments
Financial inclusion is one underserved by the traditional ($68) in 2010, and since then or insurance policies. Assigned to nterest in neuroscience is growing The costs, along with the methodologies,
of the pillars of the Aberdeen financial system. The average loan she has increased her loan as some distant future purpose, slow apace among companies exploring outcomes and ethics of the latest research
Standard Capital Global Equity is $174; if the business owner pays her business has grown. It now money’s primary value is to give how it might help them both develop are all being assessed as pioneering
Impact strategy. One of the it back within the repayment time generates sales close to N1 million peace of mind. Yet people struggle to and sell consumer goods and services. studies turn a frontier science into a reality.
companies listed in the strategy, frame, they can take out another ($2,738) each month, generating translate their life goals into financial Not so long ago, its premise – that University of California, Berkeley marketing
targets, resulting in uncertainty about
ASA International (ASAI), is making loan. Defaults are low, which means profits of N110,000 ($300). human thoughts, feelings and actions professor Ming Hsu has debated whether
whether they’re on track. Their slow
a significant contribution in this that ASAI can bring rates down to Companies like ASAI recognise are just the products of neural activity we really need to record neural signals in
money often fails to alleviate stress.
area. Originally an NGO, ASAI is very competitive levels. that financial services can help in the brain – seemed incredible. Today, order to understand the importance of
Many were unsure whether their
now a listed for-profits business Access to credit creates a low-income households generate finances were optimised, describing organisations from Google to WarnerMedia branding, a conclusion readily reached
offering microfinance to female flywheel effect: it means that income, build assets and create their feelings as “out of control”. run neuromarketing units, using insights through traditional surveys and focus
micro-entrepreneurs in Africa businesses can expand and what it calls a “cycle of wealth”. One solution could be in sight. gained to inform commercial initiatives and groups. However, people don’t always
and Asia. The company uses The ongoing digital growth in slow strategies. Firms on smaller budgets are say what they think, and several studies
World Bank data to identify money management is bringing it outsourcing such research, or waiting as testing responses to subjects ranging
the proportion of low-income ”The company uses World Bank more in line with the transparency Silicon Valley’s finest race to develop more from soundtracks to smartphones have
of fast money accounts. Attitudes
women in the population and
targets its services in those
data to identify the proportion of to money often remain fragmented,
affordable brain scanners. Others are opting
for less expensive physiological trackers
demonstrated that brain data can predict
future success more accurately.
low-income women as a proportion
but a deeper understanding of slow
countries with the lowest level that monitor eye fixation points, facial A perhaps greater challenge comes from
Andrew Patrick money helps join the dots between
of provision. Current operations expressions and heart rates to measure those who fear a dystopian future of neural
of women in the population”
Investment Manager our present and future.
Aberdeen Standard Capital span India, Pakistan, Sri Lanka, consumer interest. programming whereby companies no longer
Continued over >
14 15
BEHAVIOURAL FINANCE BUSINESS + PLEASURE
simply shape consumer preferences but Among the few current exceptions are
control them. Again, defenders point out models for which there are extensive waiting
marketers already use tactics to influence lists. These include steel Rolex models such
consumers without their knowledge. as the Cosmograph Daytona (again), the
Michael Platt, professor at the Wharton GMT-Master ‘Pepsi’ (so-called because of
Neuroscience Initiative, has claimed its red and blue bezel) and versions of the
that it’s currently nigh on impossible to Audemars Piguet Royal Oak.
physically manipulate people’s brains
without their consent. Future classics
Sleep nudging is one development Although ownership of a wristwatch has
causing concern, but also excitement when been common for the best part of a century,
applied ethically. An Israeli study has found it is only in the past 20 years that the
that exposing sleeping smokers to the smell concept of collecting watches and owning
of cigarettes mixed with rotten eggs led to a multiple examples has really taken off.
WATCHING
Choice paralysis
30% reduction in smoking for several days. As a result, interest has burgeoned,
Ken Paller, a psychologist at Northwestern demand has increased and production
University, notes the research has
implications for new techniques to combat
phobias and unhealthy eating habits.
BRIEF numbers have swelled – with the knock-
on effect that there are now more good
quality, recently made, watches available
WHETHER shopping but its relationship to Last year, Ofgem
Another technique known as hormone
for jeans, coffee beans, wellbeing appears to be released the results of its
In a digital age, the appeal of analogue timepieces is still ticking away. on the pre-owned and ‘grey’ markets (i.e.
manipulation sounds controversial although or selecting an energy more complicated. Schwartz Collective Switch Trials, Simon de Burton looks at the market for vintage and contemporary watches new watches that are available through
it started as a cancer treatment that adds, provider, insurance policy says academics have largely which aimed to increase unofficial dealers).
T
blocks or removes hormones to slow or stop or phone service, we’re ignored the fact that choice consumer engagement Indeed, such is the importance of
the growth of cells. In 2015, neuroscientists confronted by an abundance “requires increased time in energy retailers. The he February 2020 issue of the But, away from the heady sums paid for ‘pre-owned’ that the luxury goods giant
found that dosing consumers with of choices. Many marketers and effort and can lead to trial helped reduce the superyacht ‘bible’ Boat International the best of the best, how do vintage watches Richemont recently acquired Watchfinder,
testosterone increased their preference for and consumers assume anxiety, regret, excessively hassle of switching by contains ads for ‘Loretta’, a classic, stand-up as an asset class? one of the largest and most successful
luxury brands. This led to the hypothesis such a plentiful supply of high expectations, and directing customers to 57-metre sailing boat priced at Based on the market during the past 15 used watch e-tailers in Europe.
alternatives helps us decide self-blame if choices don’t an independent price
that the male sex hormone makes people $7.5m; ‘Pura Vida’, a 26-metre years, the answer is often ‘extremely well’, For anyone contemplating buying a
what’s right for us – a view work out”. comparison helpline. The
more sensitive to status. Sunseeker ($4.89m); ‘Jo’ a 50-metre with prices for many models quadrupling quality watch, it’s worth checking the
supported by economists study also provided insights
Researchers have also discovered they Benetti ($13.9m) and ‘Attitude’, a brand new, (or more). Certain 1960s and ‘70s versions site both to see what’s available and as a
can influence neural inhibition. Using
who claim greater choice
should deliver cheaper
“People tend into our habits and offered
coping mechanisms to
futuristic-looking 26-metre Otam that could of the Rolex Cosmograph Daytona that source of values – every watch offered is
transcranial magnetic stimulation machines, prices. Others argue that to give more overcome inertia or biases. be yours for $5.9m. could have been bought for £30,000 in the displayed with both an asking price as well
which stimulate or depress nerve cells in Such large sums seem almost routine for early 2000s can now command as much as as the current, recommended retail price.
the brain, they can temporarily reduce the
excessive amounts of
options can lead to choice
weight to short- “People tend to give more
weight to short-term issues a billionaire’s favourite plaything, but at the £500,000, while the most collectable Heuer Other online sources include Chronext,
degree to which people exhibit socially paralysis, which can result term issues than than long-term ones,” it end of last year, a single wristwatch was sold chronographs have grown from £5,000 Chrono24 and TheWatchBox, all of which
conforming behaviour. Northwestern
University professor Moran Cerf has worked
in going for the default
option or avoiding buying
long-term ones” concluded, adding the
service helps people plan
for $31m – almost as much as the combined
value of all four of the above.
apiece to as much as £30,000 or £40,000.
But while many vintage and pre-owned
serve as platforms for new, pre-owned
and grey market models being offered by
with individuals to see how their fears could a product altogether. by: “reminding them of The eye-watering amount was paid for a watches have proved to be excellent traders from around the world.
The latter view – put The ensuing paralysis can their intentions and giving
be suppressed or amplified. An example of Patek Philippe ‘Grandmaster Chime’ at the investments over the years, the story is As with any ‘passion purchase’, the
forward by psychologist lead to businesses taking them deadlines to overcome
putting such influence to positive use is a biennial ONLY WATCH charity auction in somewhat different when it comes to buying best approach for non-experts is to buy a
Barry Schwartz in his book, advantage of this behaviour procrastination.”
trial to alter responses to eating food made Geneva. The firm has long held the top spot new. In this case, the sobering phrase ‘caveat watch because you like it rather than in the
The Paradox of Choice – is to maximise profits. Take As online shopping takes
from insects, which are a good source of gaining ground. Think energy providers, with their share from traditional for ‘most valuable wristwatch’, a position emptor’ should always be borne in mind. hope that it will rise in value. Practical and
PHOTO: EyeEm
protein with low environmental impact. Tesco’s successful bid to bewildering array of tariffs retailers, we can miss out it lost only briefly in 2017 when a Rolex Rather like new cars, the large majority of beautiful, the right watch will give you joy
It’s understandable some academics make stores less baffling and charges. How many of on personal service and Cosmograph Daytona once owned by new watches lose value as soon as they are every time you look at it and, if cared for,
and government regulators have called for to time-constrained us are certain we’re getting expert advice. ‘Chatbots’ Paul Newman fetched $17.8m. taken from the showroom. will potentially last several lifetimes.
greater transparency among companies shoppers by scrapping the best deal, or will remedy programmed to simplify Bear in mind, however, that a mechanical
conducting research in their private labs. 30,000 of the 90,000 the status quo if we’re not? consumer challenges, as watch should, ideally, be serviced every
Facebook came under scrutiny several products on its shelves. And would we trust a less well as comparison sites “As with any passion purchase, the best approach five years. Extremely complicated models,
The paradox of choice familiar supplier, even if it and staffed helplines,
years ago when it manipulated hundreds
is that it gives consumers trumped the services of can empower us to act on for non-experts is to buy a watch because you like it, such as those with perpetual calendars or
of thousands of users’ moods by altering split-seconds chronographs, can make the
their newsfeeds without informing them.
autonomy and control, the Big Six? informed decisions.
rather than in the hope it will rise in value” servicing costs of a Ferrari seem reasonable.
16 17
WEALTH BRIEFING #MENTIONTHEPENSION
OVERCOMING
12.6%
?
WHEN ASKED HOW THEY WOULD LIKE TO PENSIONS
INERTIA
WE NEED
SEE THEIR PENSIONS INVESTED, THE TOP
FIVE CATEGORIES WERE:
TO TALK
There are many reasons
OF RESPONDENTS HAD
47.8% why people find it hard to
engage with pensions. In
discussed where their pension GREEN ENERGY
Nudge, Richard Thaler and Cass Sunstein
was invested with their boss in
ABOUT
identified some key reasons why
the past six months. Heading
40.7% individuals struggle with decisions in
56.9%
the list of discussion topics important areas. We tend to focus on the
were holidays (40.4%), pay SUSTAINABILITY short-term rather than delay gratification,
PENSIONS
rises (35.8%) and weekend and procrastinate rather than make a
plans (33.8%). Further down
the pecking order were traffic
35.8% wrong decision. We struggle with more
infrequent tasks, especially if they have
on the way to work (25.5%) REVERSING CLIMATE CHANGE unclear goals and there’s little feedback on
progress. And we tend to seek out products
and what’s for lunch (21.4%).
OF RESPONDENTS SAID that we know and like – but with pensions
The companies in which our they would be unlikely to 31% we rarely have a list of preferences.
pensions are invested have a huge
Understanding how pensions can have
ask how ethically a pension WATER CONSERVATION
a positive impact can be a spur to action.
is being invested. When
impact on climate change. It’s hard The findings of the #mentionthepension
challenged why, most (59.3%)
responded that they had 30.7% survey demonstrate that while employees’
!
to say how much of the pension never even thought about it. RENEWABLES
awareness levels of where their pensions
are invested is low, given a choice, the
industry is invested in polluting majority would like their hard-earned cash
to be invested ethically.
companies and industries but
according to #mentionthepension*, THE BOTTOM FIVE WERE: Pension providers are legally obliged to tell
employers and employees where the funds
a survey carried out for the 2019 are invested. Anyone curious to know
more about how their pension is invested
Good Money Week,
32% 72.5%
will find the questions below helpful.
76.5%
5.3% SOCIAL
MEDIA FACTORY
5.1% ■
■
Who is my pension provider?
Is my fund their ethical or sustainable
option?
GIANTS FARMING
■ Did you know ethical or sustainable funds
often outperform those that aren’t?
■ Have you seen the Good with Money and
ShareAction reports on the most highly
SAID THE CLIMATE EMERGENCY TOBACCO rated workplace pension schemes?
was an issue of concern for PAYDAY FAST
LENDERS ■ Will you contact our workplace pension
OF THOSE SURVEYED WERE them, while only 27.6% were FASHION
provider to ask exactly how they are
aware of the option for ethical indifferent. But only 23.6% considering financial environmental and
investments and 30.5% felt knew that where pensions social risks?
of respondents were unaware that it was important that their
money was invested ethically.
were invested had an
impact on climate change. 3.6% 4% ■ Will you consider an ethical or sustainable
default pension fund for the company?
pensions have an impact on the
environment at all.
3.2% To read the #mentionthepension report in
full, go to goodmoneyweek.com/pensions
*Good Money Week conducted research around pensions, asking 2,000 people from across the UK where they stand on money, ethics and employment.
18 19GAME LIGHTBULB
CHANGERS MOMENT
Have you always had an
entrepreneurial streak? Yes, I guess.
We grew up in a very remote part of
Selling beer,
Ireland; there was no tuck shop at our
school, and the canteen offering was
very limited. When I was about 14, I used
giving water
to buy fizzy drinks from the local shop for
50p, put them in my mum’s freezer and GRAHAM
sell the frozen version for £1. My mum BOSHER
always said that I would get back into the GRAZE
drinks game at some point.
Marooned on an
Brewgooder is a craft beer industrial estate in
What sparked your interest in access
with a mission – to bring clean to clean water? When I was a student,
FACTFILE Acton, where he was
setting up the DVD
water to a million people I worked in Nepal for three months and Women in the developing world walk by post business
contracted a parasite by drinking the 6km a day on average to fetch water
in Africa by 2025. Founder local water. I got quite sick, but I was Launched in 2016,
LoveFilm, Bosher was
bored with the snacks
Alan Mahon reveals how treated with a very strong antibiotic
Brewgooder
donates 100%
a go. We gave ourselves four months – a offered by the office
when I got home and recovered crazy length of time to develop a brand. vending machine.
he got this ambitious social completely. That experience really stuck
of profits from
their craft beer We had to make deals before we’d even A bit of a techie, he
enterprise off the ground with me – I realised we take things sales to clean brewed a can of beer. wondered whether
water charities in there was scope for
like safe drinking water and access to Africa. They do
healthcare for granted. How easy was it to raise the first a more imaginative,
this with the help
WORDS / snack product – one,
of BrewDog, who round of funding? We couldn’t really
KAREN HEANEY brew their beer at which like Lovefilm’s
Where did the idea for Brewgooder go to a bank and say: “Can you give
zero margins. To DVDs, could be mailed
PHOTOGRAPHY / come from? After university, I was me a loan to set up a brewery to fund
date, it has sold to customers. And so,
SOPHIE GERRARD looking for jobs in the charity sector. I clean water projects?” So we turned to
600,000
in 2008, Bosher and
bumped into a friend’s big brother, Josh crowdfunding. We decided that if we got his team launched
Littlejohn, at the Edinburgh Festival. £50k in pre-orders we would launch, and Graze – a customised
He set up Social Bite, a sandwich shop
business that helped employ and train PINTS within three weeks we’d raised £60k. snack box service.
Along with its novel
1.2M
homeless people in Scotland. He offered Why focus on Malawi? It was almost mailbox delivery,
me a job and that started me on my accidental. The chairman of a charity the emphasis on
nutritious nibbles
social enterprise journey. I knew said: “If you’re going to set up a
CANS
like nuts and seeds
Josh and I used to enjoy a beer after water charity, why don’t you go and see
proved a hit with the
work, and we went from drinking lager the water issues in a village we work with
public. By 2014, the
to drinking craft beer. Lots of my friends called Chiluzi.” We took him up on his business had 150
are stocked in over
were passionate about it and I could see offer and the community opened their
2,000
full-time employees
the market growing – I thought I’d love to doors to us. We really wanted to pay and more than
channel this trend and direct it into clean them back with our first project, so we 100,000 customers
water issues. decided that if we got our funding, we’d on both sides of the
How did you find brewing partners?
PLACES
Its profits have
build a solar-powered well. And we did. Atlantic. The following
year Graze hit the
supermarket shelves
We tested the concept in a really limited funded or Any highlights? As someone with a
and also signed
way at the 2015 Edinburgh Festival. I co-funded over chip on their shoulder about not being a
132
deals with Boots and
brewed 1,000 bottles of my own beer – brewer, I’m proud of how positive our UK
WH Smith. In 2019,
and was left with 700. Let’s just say I’m a brewers are about what we’re doing. And
the Graze holding
much better drinker than I am a brewer. shaking hands with an elderly gentlemen company was snapped
Then I thought, why not go to the in Malawi, dressed in his Sunday best, up by Unilever for a
people at the top who are doing it. I met who thanks you for what you’ve done, very healthy £150m.
with BrewDog and they decided to give it PROJECTS that’s a bit of an out of body experience.
21You can also read
