Imagine it’s 2050 and you’ve just received a letter from the trustees of your late grandfather’s estate informing you that a significant distribution of £10,000,000 is being transferred to your account.

This should be cause for celebration, but it’s not.

As you check the news on your phone there’s another Red Impact Risk Warning for severe flooding across the North-West and that another 3 cities (Dubai, Los Angeles and Amsterdam – a bit too close to home) have been declared uninhabitable by the United Nations.

As you turn back to the letter you see a source of wealth history and a final portfolio statement attached stating ‘the trust fund has been managed using a medium risk investment strategy with no sustainability preferences.’

What would you give for the ability to go back to 2025 and have input into the investment decision making process as your grandfather and his trustees sat around the table?

The risks have never been greater, and dystopian futures feel closer to reality than at any time in history. We are living and investing in the Anthropocene.

As investment managers with a deep long-term conviction to sustainability we’re constantly challenged by the market and the geopolitical backdrop to make short-term investment decisions that compromise the integrity of our approach.

For clients deciding how to invest the easy option is to stick your head in the sand and think I’m powerless to make a difference.

It has never been more important for investment managers and clients to invest sustainably basing decision making on both fundamental economic and environmental research, focusing on the long-term risks rather than the short-term noise.

‘We are not living in a cyclical, mean-reverting world where the bad is temporary and the effects are reversible.’ – Permacrisis – Gordon Brown, Mohamed El-Erian & Michael Spence

Which path are we on?

We must recognise that the global landscape has shifted post-Trump, post-Ukraine, post-Pandemic and that the shared socio-economic pathway we are now on has distinctive features:

• Policies focused on security
• Barriers to international trade
• High inequality
• Slow economic growth
• Low population growth in rich countries, high in other countries

This ‘rocky road’ of regional rivalry (Shared Socio-economic Pathway 3) is one of a set of five scenarios used by climate scientists, economists and energy system modellers to examine how global society, demographics and economics might change over the remaining course of the 21^st Century.

In this scenario countries are focused on achieving energy and food security goals within their own regions. Economic development is slow, consumption is material-intensive, and inequalities persist or worsen. This feels like an accurate portrayal of our current global economic landscape.

The recent ‘Liberation Day’ tariffs have sent shockwaves around financial markets and concerns about competitiveness and security are in the foreground with a resurgence of nationalism.

The deeper risks though are buried in the wider Executive Orders (116 and counting) issued since January 20^th 2025. They are clearly based on the Heritage Foundation’s Project 25 manifesto which effectively seeks to deconstruct many aspects of the US governmental framework and with it the functioning of the global economy.

These are big risks with significant impacts. However, if we take a step back and think long-term, we must also recognise that the global energy transition is accelerating and that the overarching goal of the Paris Agreement is not solely dependent on the United States policies over the remaining presidential term.

Assessing Dynamic Risks

Climate and biodiversity risks tend to be categorised as ‘important but not urgent’ and are generally under-priced by businesses and markets. The clock continues to tick and nature doesn’t care who is in the oval office.

Dynamic risks may not appear likely or highly impactful today however they can quickly become financial material if certain tipping points are activated through positive feedback loops or planetary boundaries being breached.

We assess the physical risks (acute and chronic) as well as the transition risks (policy, legislation, technological and changes in consumer behaviours).

As an example, the planned dismantling of the climate change research arm and cuts to the funding of NOAA (National Oceanic and Atmospheric Administration) present a significant increase in risk as NOAA is connected to the Mauna Loa Observatory where data is collected to assess the levels of CO₂ equivalent in the atmosphere. This data is used to maintain the Keeling Curve (430.06 parts per million as at 11.04.25), a vital measure of the impact of anthropogenic emissions.

There are tipping points and feedback loops at work here, with the recent devastating LA fires increasing atmospheric CO₂ levels which in turn increases the future physical risks as well as the financial material economic costs (estimated at $76 billion and $131 billion – source UCLA Economic Impact of the LA Wildfires).

Cities and economic areas can quickly shift from vulnerable to uninsurable to uninhabitable.

What do we do to build resilience into investment portfolios?

We focus on building long-term resilience to climate and biodiversity risks, protecting and growing capital sustainability for our clients.

• think about the future with a long-term multi-generational mindset
• recognise that risk is not the same as volatility
• aware of dynamic risks and prepared for their impacts
• build ‘antifragile’ strategies and structures
• diversify portfolios in a deep sense
• utilise barbell approaches
• horizon scan and plan for different scenarios

Importantly, we remain positive and hopeful, we see sustainable solutions and innovation across many sectors as well as a renewed drive to mitigate and adapt. We take advantage of market volatility to build long term positions in assets that meet our sustainability criteria.

As Nassim Taleb stated in his 2012 work Antifragile ‘It is far easier to figure out if something is fragile than to predict the occurrence of an event that may harm it’.

Assessing Sustainability Preferences

Our introductory hypothetical scenario helps to illustrate the conundrum facing asset owners and investment decision makers today.

Our role at Resilience is to work alongside clients to construct and manage portfolios to preserve and grow their capital whilst making a positive environmental and social impact.

This journey starts with the assessment of a client’s sustainability preferences to determine what’s most important to them, we recognise that not all sustainable clients are the same which is why we’ve developed 4 sustainable investment personas – Environmentalist, Social-Impact Focused, Techno-Optimist and Conservationist.

We know there are many sustainably minded clients and institutions that share our determination to make a positive impact, it’s more important than ever that we address the climate and biodiversity crisis through wise long-term investment decision making. If you are fortunate enough to have investable wealth you can make a positive impact through your portfolio for current and future generations.

Thinking back to our scenario, what would you rather have? £10m in an uninhabitable world or the opportunity to preserve and grow your capital whilst investing sustainably?

Over 5 years our Core Resilience investment strategy has a CAGR of 6.85% and has performed ahead of traditional peer group benchmarks.

The Resilience Sustainable Preferences assessment tool is free to use, and we encourage anyone thinking about sustainable investing to spend 15 minutes exploring what’s most important to them.