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          Thematic Commentary – 29 September

          Thematic Investing

          Written by: Tom Barker

          Published: 13 October 2023


          In today’s rapidly evolving market, investors need to stay on top of the latest trends and themes that fuel growth. In this monthly publication, we offer our market commentary across our themes, covering new opportunities and potential challenges. By providing a deeper understanding of our themes, we aim to help you make more informed investment decisions and achieve your investment goals.

          Ark in the ocean

          Sustainable Future of Food

          September highlighted the ongoing threat of geopolitics to food security. Ukraine formally raised a complaint with the World Trade Organisation in response to Hungary, Poland and Slovakia’s decision to impose import bans on Ukrainian grain, citing concerns about disruptions in their own domestic markets. Slovakia eventually reached a resolution to this dispute, but Poland took a more confrontational stance by declaring the suspension of new arms supplies to Ukraine, thereby escalating tensions in the region. These developments are worrisome because they evidence the risk of eroding European unity against Russia and potentially establish a troubling precedent for other nations contemplating a reduction in support for Ukraine. Additionally, Polish farmers, a pivotal voting constituency for the ruling Law and Justice party, expressed discontent due to the influx of Ukrainian grain, which has contributed to falling prices. We expect food to continue to be a prolific topic in the geopolitical discussion, especially as additional warfare breaks out and we witness escalating tensions between the modern axis of resource-rich and resource-dependent powers. 1

          Global Sustainable Infrastructure

          During September, the 2023 UN Sustainable Development Goals (“SDGs”) Summit was held in New York City. World leaders adopted a political declaration to accelerate progress toward the 17 SDGs. The declaration commits to providing at least $USD 500 billion annually for SDG initiatives in developing countries. Secretary-General António Guterres pressed governments attending the meetings to bring proposals to “massively leverage private funding in support of developing countries.” Similarly, he urged them to arrive at COP28 in Dubai next month with concrete plans and proposals for avoiding the worst effects of climate change, upholding global promises of support and helping developing countries to  transition to renewable energy. The renewed attention towards the SDGs is expected to drive significant investment in infrastructure.

          According to our partners Sustainable Market Strategies, infrastructure either directly or indirectly influences all 17 SDGs, including 121 of the 169 targets (72%).

          For those interested in long-term infrastructure dynamics, a sustainable infrastructure strategy offers a comprehensive perspective. This approach delves into risk/return characteristics while also addressing the complexities of the SDGs, emphasizing alignment within the investment process. 2

          telecom infrastructure

          Cybersecurity and Data Privacy

          September saw a high-profile acquisition in cybersecurity.

          Cisco announced its acquisition of big data security firm Splunk for approximately $USD 28 billion.

          Whilst Cisco produces networking equipment and software, the deal will help to build out its AI-powered cybersecurity offerings with a focus on threat detection, prediction and prevention. Cisco expects the deal to improve cash flow and gross margins within the first year and non-GAAP earnings per share by the second year. The acquisition, set to close in Q3 2024, will be financed through a combination of cash and debt. Analysts have expressed mixed opinions, citing concerns about product overlap given Splunk’s recent shift to a cloud-focused approach. We remain optimistic as we continue to see consolidation in the cybersecurity sector, which helps support financial stability in otherwise siloed product offerings. 3

          Digital Payments Economy

          In September, Apple launched “Tap to Pay on iPhone” in Brazil, enabling businesses of all sizes to use iPhones as payment terminals. The service initially targets payment network CloudWalk’s InfinitePay customers, enabling them to accept payments through Apple Pay, physical cards or other digital wallets via their iPhones. Apple is also collaborating with other partners in Brazil, including Stone, SumUp and Nubank, to expand the availability of “Tap to Pay” to more sellers. This move aligns with Brazil’s growing trend of contactless payments. Indeed, a July 2023 survey by the Datafolha Institute for Abecs found that 54% of Brazilian consumers increasingly use contactless payment options like cards, mobile phones and watches. Merchants can utilise this feature on compatible iPhones. During checkout, customers simply need to hold their iPhone, Apple Watch or compatible NFC card near the merchant’s iPhone to make a payment securely via NFC technology, eliminating the need for extra hardware. Apple first introduced “Tap to Pay” in the United States in 2022 and later expanded it to Taiwan and the UK. Brazil is the latest country to embrace this convenient payment solution. Meanwhile, Mastercard teamed up with Mercedes Benz to introduce native in-car payments “at the pump.” Customers can now use the fingerprint sensor in their car to make secure payments at more than 3,600 service stations in Germany. 4 5

          Cybersecurity, fibre

          Environmental Impact 100

          In September, the Taskforce on Nature-related Financial Disclosures (“TNFD”) published its final recommendations to help promote the relationship between nature and business. The TNFD will enable companies to identify, evaluate and assess nature related impacts, risks and opportunities whilst incorporating these into strategic business planning and reporting. The framework consists of conceptual foundations and recommended disclosures structured around the four pillars of governance, strategy, risk and impact management and metrics and targets. Its adoption will ensure companies are well positioned operationally when mandatory nature-related financial disclosures are implemented. For investors, sustainability reports previously filled with pictures of birds and trees, will now feature nature-based material information and KPIs presented in a standardised and transparent manner.  This development should benefit impact investors and facilitate the shifting of capital flows to nature-positive outcomes. It should also benefit companies like Svenska Cellulosa Aktiebolaget (SCA) which promotes nature through sustainable forestry practices, protecting biodiversity and fostering responsible product production and usage in their hygiene and paper products. 6

          USA Environmental Impact

          In September, the United States set a remarkable record by experiencing the highest number of natural disasters in a single year that have cost at least $USD 1 billion in damages. These disasters include wildfires, floods and storms, all of which experts caution are being intensified by the ongoing climate crisis. According to the National Oceanic and Atmospheric Administration (Noaa), there have been 23 extreme weather events in the US so far this year, each with a price tag of at least $USD 1 billion. This tally exceeds the previous record of 22 such events recorded in 2020.

          As of September, Noaa estimate the cumulative cost of these disasters in 2023 to have exceeded $USD 57.6 billion.

          Recent billion-dollar disasters include the Hawaii wildfires that killed over 115 people on Maui and Hurricane Idalia that wreaked havoc on Florida at the end of August. These developments highlight the ongoing need to invest in climate change adaptation and economic activities that contribute substantially to reducing or preventing the adverse impacts of the current or expected future climate. Great Lakes Dredge & Dock are one company providing solutions to this problem by offering coastal resilience through dredging, shoreline restoration, wetland preservation, and infrastructure modifications, mitigating the impacts of rising sea levels and extreme weather events. 7


          Circular Economy Enablers

          Companies are increasingly embracing sustainability as a strategic response to rising input costs, recognising that responsible practices can lead to long-term resilience in a resource-tight world. In September, Apple announced a new range of smartphones that implement circularity and waste reduction into their design.

          The flagship iPhone 15 Pro models will now use structural frames constructed from 100% recycled aluminium, batteries featuring 100% recycled cobalt and 100% recycled rare earth elements in all magnets.

          Apple will also use 100% recycled gold in the USB‑C connector and the main logic board will incorporate 100% recycled copper foil. These advancements signify a pivotal shift in global brands acknowledging the imperative of waste mitigation and reducing ecological footprints throughout their supply chains. As consumer purchasing decisions increasingly hinge on these factors, brands that fail to meet expectations risk swift value depreciation in our transition to a sustainable economy. As for our investment solution, the focus remains on identifying the enablers of the circular economy; companies that assist global brands like Apple think about, design and implement greater circularity into their business models. 8

          Pet Care

          Companion Protect, a pet insurance and animal wellness company based in Kansas City, has successfully secured $USD 27 million in a Series A funding round. This significant investment will play a pivotal role in the company’s mission to revolutionise the pet health sector and make pet healthcare accessible to a broader audience. The funds will be allocated towards developing new products, expanding partnerships and driving digital innovations to enhance the overall customer experience. Noteworthy participants in this funding round include fintech and strategic investors affiliated with CSAA Insurance Group, Avanta Ventures, Liberty Mutual Insurance, shareholder insurance firm Old Republic International Corporation and Stray Dog Enterprises. 9

          Medical Cannabis and Life Sciences

          According to a recent report by IMARC Group, a leading market research company, the global medical cannabis market was valued at $USD 31.8 billion in 2022 and is expected to reach $57.4 billion by 2028. This translates to a CAGR of 8.47% between 2023-2028. Medical cannabis is used for therapeutic purposes and contains compounds like cannabidiol (CBD) and tetrahydrocannabinol (THC), which interact with the endocannabinoid system in the human body to provide various therapeutic effects.  Several factors are driving the growth of the medical cannabis industry. The increasing acceptance of medical cannabis as a treatment option for various medical conditions, backed by scientific research, is a driver. The demand for natural and alternative remedies, especially for chronic pain and neurological disorders, is also contributing to market growth. Favorable regulatory changes, including legalisation for medicinal use in various regions, are creating opportunities for licensed dispensaries and production facilities. Additionally, the expanding applications of medical cannabis, such as treating anxiety, depression and insomnia, are attracting a broader patient base. 10

          hemp, cannabis

          Emerging Market Internet and Ecommerce

          In August, China’s economic conditions showed signs of improvement on multiple fronts. Retail sales and industrial production growth picked up pace, surpassing expectations and a brief episode of “deflation” was swiftly resolved as the headline inflation rate increased to 0.1% year-on-year. Additionally, in September, the forward-looking manufacturing NBS PMI entered the “expansion” zone at 50.2 and non-manufacturing activity also accelerated, registering a faster growth rate at 51.7. However, concerns in the real estate sector, particularly surrounding Evergrande, continued to draw attention. Despite this, the Chinese government remained committed to providing support, this time by easing banks’ reserve requirement ratios. 11

          Educational Tech and Digital Learning

          Recent years have witnessed significant technological advancements in higher education. However, a UNESCO survey revealed that less than 10% of schools and universities globally have established formal policies for generative AI applications, underscoring the need for comprehensive approaches to technology in education.

          Moodle, a prominent open-source learning management system, has played a pivotal role in advancing the discussion on AI. In September, it hosted MoodleMoot Global in Barcelona, where over 700 participants from 56 countries convened.

          The conference covered diverse topics, such as AI’s role in education, addressing bias in AI, and the regulatory framework for AI adoption in education.

          Moodle’s forthcoming release, version 4.3, promises numerous improvements, including enhanced communication features. The company’s collaborative ethos and modularity have made it the world’s most popular Learning Management System, benefiting schools, universities, and organisations worldwide. 12



          Independent, “First cargo grain ships arrive in Ukraine through Black Sea using new route”, September 2023. Available at:


          Sustainable Market Strategies, October 2023


          Financial Times, “Cisco agrees $28bn deal for cyber security group Splunk”, September 2023. Available at:


          Mac Rumours, “Apple Launches Tap to Pay on iPhone in Brazil”, September 2023. Available at:


          Mastercard, “Mercedes-Benz teams up with Mastercard to introduce native in-car payments at the pump”, September 2023. Available at:


          TNFD, “Recommendations of the Taskforce on Nature-related Financial Disclosures”, September 2023. Available at:


          National Oceanic and Atmospheric Administration, “How to save heat-stressed coral? Science, and some help from the nature” September, 2023. Available at:


          Apple, “Environment 2023 Report”, September 2023. Available at:


          GlobalPets, “American pet insurance firm raises $27 million”, September 2023. Available at:


          Digital Journal, “Medical Cannabis Market Size, Leading Companies, Global Industry Trends, Future Scope and Business Opportunities 2023-2028”, September 2023. Available at :


          Bloomberg, September 2023.


          TechHQ, “How is Moodle advancing the AI education debate?”, October 2023. Available at:

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