As the war in Ukraine continues, heightened focus on food and energy security is leading to tightness in various commodity markets. We see another 15% upside in broad commodity indices over the next six months. Over the longer term, we think demand for carbon-zero, cybersecurity, and agricultural yield enhancement will all be boosted.
- Russia’s invasion of Ukraine will have longer-term consequences for governments and businesses as they increasingly value security and stability over efficiency and price. This applies particularly to the fields of energy, food, data, and climate.
- The risk to energy supplies is adding a sense of urgency to energy security, favoring investments in greentech, clean air and carbon reduction, and energy efficiency. Interruptions to food trade have pushed soft commodity prices higher, favoring stocks linked to improvements in agricultural yield, food waste reduction and supply chain efficiency—key building blocks of our “food revolution” theme.
- Ongoing cyberattacks are likely to lead to further spending by governments and corporations on cybersecurity. We also think climate risks favor investments into sustainable strategies.