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World population day

Three decades ago, on 11 July 1989, World Population Day was established by the United Nations as way of focusing attention on the importance and urgency of population issues.

It was introduced after interest in the subject was ignited by the ‘Day of Five Billion’ two years earlier on 11 July 1987. This was designated by the United Nations Population Fund as the approximate day on which the world’s population reached five billion.

The annual event promotes awareness and action to address the needs of a rapidly growing population, including upholding the right to family planning and making sure that these services are accessible to everyone, regardless of where they live.

The impact of an ever-expanding population

Around 83m people are being added to the world’s population every year according to current estimates.[1] The global population reached seven billion in 2011 and is expected to grow to 8.6 billion by 2030 and 11.2 billion by 2100.[2]

This rapid population growth has a huge impact on the environment. More people mean greater demand for often limited resources, such as land, water, food and fossil fuels, which in many areas already aren’t sufficient to support all those who need them.

For example, according to the UN, water scarcity currently affects more than 40% of the global population and by 2050, at least one in four people is likely to live in a country affected by chronic or recurring shortages of fresh water.[3]

Separate estimates from the World Wildlife Fund (WWF) show that some 1.1 billion people worldwide lack access to water, and a total of 2.7 billion find water scarce for at least one month of the year.[4]

Tackling population growth

Educating people about family planning and ensuring a reliable supply of modern contraceptives plays a key role in keeping population growth to sustainable levels.

According to the UN Population Fund, some 214m women in developing regions still lack safe and effective family planning, often because there are limited services and information available to them.[5] The UN has introduced nine standards to uphold the right to family planning, including non-discrimination, so family planning cannot be restricted on the basis of race, sex, religion or any other factor, and that it must be good quality, so that information is both scientifically accurate and clearly communicated.

There are also ways investors can play a role in tackling issues such as population growth and the impact this has on the environment and society. Recent years have seen a dramatic increase in the number of funds which take a sustainable or impact approach, aiming to make money by investing in companies which have a positive effect on the world.[6}

These funds might invest, for example, in companies that seek to reduce the impact of the ever-increasing amount of consumer waste, or in businesses involved in renewable energy, or water treatment solutions.

Importantly, investors are becoming increasingly aware that investing in companies which create a positive societal or environmental impact, or have sustainability at the heart of their business, does not need to mean sacrificing returns.

Notably, AXA IM’s first ever consumer survey, Voices, which interviewed more than 2,000 adults uncovered some interesting results when it asked individuals about responsible investing (RI). In fact, it found that most individuals, at 68%, believe that companies with more robust environmental, social and governance (ESG) practices will be in a better financial position in the long term compared to those who are not. Individuals, do however, want to see proof that their money is making a difference - as one in two want to see hard evidence of the actual positive impact their money is having.

The major strides that will need to be taken over the next few years to provide for our growing global population, in areas such as energy generation and sanitation are likely to benefit these funds, further boosting the potential for investors to do well by doing good.

References
[1], [2] United Nations, World Population Day 2019
[3] United Nations, Water and sanitation goals
[4] World Wildlife Fund, Water scarcity
[5] United Nations, World Population Day, a matter of human rights, July 2018
[6] Portfolio Adviser, Robo-advisers not ready to offer ESG portfolios, September 2018

 

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