By Bruno Bertocci, Head of the Global Sustainable Equities team and lead Portfolio Manager; Joe Elegante, Senior Portfolio Manager and Alix Foulonneau, Analyst
7.7bn today………9.7bn by 2050
9.7 billion people on the planet by 2050, that’s 2 billion more than the 7.7 billion alive today, or equivalent to one and a half times the current population of India, or 6 times the population of the US, according to projections within the United Nations' latest World Population Prospects report.
These statistics are mind-boggling, and the growing number of people on the planet is likely to see an increased demand for natural resources which is not sustainable. Furthermore, according to the UN’s projection, which assumes a decline in fertility rates and an increase in life expectancy, there’s a chance that the world’s population will reach 11 billion in 2100. This will bring a number of challenges to overcome in an already overburdened planet with finite resources.
Africa and Asia will see the largest population increases
The latest projections indicate that the population of sub-Saharan Africa will double by 2050 amounting to a staggering 99% increase. Nine countries, in particular, will make up more than half the projected growth of the global population between now and 2050, most notably India, Nigeria, Pakistan , the Democratic Republic of Congo, Ethiopia, Tanzania, Indonesia, Egypt and the US. In contrast, Europe, North America, Australia and New Zealand are among the regions that may experience reduced population growth rates.
Global population projections
The world's population will get older
The increase in life expectancy and falling fertility levels - factors highlighted in the report as contributing to population growth – is expected to see one in six people aged 65 or over by 2050 mainly across the regions of Africa, Asia, Latin American and the Caribbean.
In 2018, for the first time in history the people aged 65 or over, outnumbered children under the age of five globally. The number of people aged 80 or over is expected to triple from 143 million in 2019 to 426 million in 2050 as we continue to see major advancements in medicine.
Percentage of the population aged 25 to 64: estimates, 1990-2020, and medium-variant projections, 2020-2100
Putting pressure on the poorest countries
Mr. Liu Zhenmin, United National Under-Secretary-General for Economic and Social Affairs, feels the report offers guidance on where to target action and intervention. He believes that with many of the fastest growing populations in the poorest countries, population growth will bring additional challenges in the efforts to eradicate poverty, achieve greater equality, combat hunger and malnutrition and strengthen the coverage and quality of health and education systems to make sure that no one is left behind.
Straining finite natural resources
But as the population densities increase bringing more strain on finite natural resources, which continue to plummet, this places competitive stress on the basic life sustaining resources and naturally leads to a diminished quality of life.
8 ways population growth depletes our natural resources
- Overpopulation as demands continue to increase
- Overconsumption and waste - excessive and unnecessary use of resources
- Deforestation and the destruction of ecosystems leading to loss of biodiversity
- Mining of minerals and oil
- Technological and industrial development
- Pollution and contamination of resources
So will the growing population inevitably see resources being used faster than they can be replenished, ultimately leading to a depletion of natural resources?
A sea change in global public opinion is certainly needed and with climate change concerns increasingly making it into the news headlines, more and more people are beginning to think about the effects some of their actions have on the environment. This ranges from issues such global warming, environmental pollution, habitat loss and the consumption of finite resources such fresh water, arable land and fossil fuels to name a few. This has resulted in a booming sustainability industry globally.
The future for climate-concerned investors: predicting, protecting and profiting
Investors are increasingly considering more carefully how to put their money to work in a way that doesn’t harm the environment. The world is constantly changing and with resource scarcity at the very essence, there is the potential for this to alter the investment landscape.
While these latest figures were largely expected, the challenge remains of identifying the potential investment opportunities emerging from the real issues facing society. While some of these issues and changes can be temporary and fleeting, others can be powerful, transformative forces that shape how society is organized at a fundamental level.
For example the lack of fresh water resources to meet water demand affects every continent and was listed in 2019 by the World Economic Forum as one of the largest global risks in terms of potential impact over the next decade.
More and more people means more pollution which will only exacerbate the depletion of natural resources. For example, when fossil fuels are burned to generate power, carbon dioxide is released. This greenhouse gas traps heat in the atmosphere and contributes to climate change, a process that affects weather patterns, water resources and the survival of animals and plants many depend on as food sources.
Against this backdrop, we identify population growth as one of three megatrends along with aging and urbanization, that is relevant to investors and the future of the global economy. To learn more about the thematic opportunities this megatrend is creating, take a look at our Top company picks that continue to strive to find solutions to the ongoing climate change challenge.
As the population increases, naturally the demand for water does too. This presents an enormous challenge, and Ecolab is just one of the companies seeking solutions
More people on the planet will lead to increased demand for energy. This presents a number of opportunities for businesses. Spectris is focusing on how to improve energy efficiency