Bet Against the Seven Horsemen of the Apocalypse

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Photographer: Warner Bros./Everett Collection

The Ringwraiths from The Lord of The Rings: The Fellowship of The Ring, 2001. CLICK AHEAD for the seven biggest challenges to sustainability. 

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Photographer: Warner Bros./Everett Collection

The Ringwraiths from The Lord of The Rings: The Fellowship of The Ring, 2001. CLICK AHEAD for the seven biggest challenges to sustainability.  Close

The Ringwraiths from The Lord of The Rings: The Fellowship of The Ring, 2001. CLICK AHEAD for the seven biggest... Read More

Source: IPCC WGII AR5 Chapter 19

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Source: WWAP, prepared with data from FAO AQUASTAT (aggregate data for all countries except Andorra and Serbia, external data) (website accessed Oct 2013), and using UN-Water category thresholds.

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Source: World Bank

URBAN WASTE--The projected growth in urban waste, according to the World Bank's "What a Waste" report.  Close

URBAN WASTE--The projected growth in urban waste, according to the World Bank's "What a Waste" report. 

Source: FAO and World Bank

FOOD INSECURITY--A bigger global middle class will need a lot more food, as demand increases with incomes. Close

FOOD INSECURITY--A bigger global middle class will need a lot more food, as demand increases with incomes.

Source: 2012 World Energy Outlook, International Energy Agency.

ECONOMIC INEQUALITY/ENERGY POVERTY--A ranking of developing nations by their access to energy. Close

ECONOMIC INEQUALITY/ENERGY POVERTY--A ranking of developing nations by their access to energy.

Source: GIS/World Health Organization

PUBLIC HEALTH BURDEN--As nations develop, and lifestyles change, non-communicable disease becomes a much bigger factor in mortality.  Close

PUBLIC HEALTH BURDEN--As nations develop, and lifestyles change, non-communicable disease becomes a much bigger... Read More

Source: UN World Population on Ageing 2013

DEMOGRAPHIC CLIFFS/GRAYING POPULATION--The number of working people per elderly person is projected to decline by 2050.  Close

DEMOGRAPHIC CLIFFS/GRAYING POPULATION--The number of working people per elderly person is projected to decline by 2050. 

You know they're out there.

Even people still squeamish about one or another global mega-risk must, deep in their seats of reason, twitch at the thought of these things taking a toll:

  • Climate change.
  • Water scarcity.
  • Vast urban waste.
  • Food insecurity.
  • Public health burdens.
  • Economic inequality.
  • Demographic cliffs.
See below for charts describing each.

These are notorious, fuzzy, amorphous risks that belong to everyone and therefore to no one. That's why unabashed leadership in the fight against them is so hard to come by in either the civic sphere or private sector. These problems can seem infinite, and, what's worse, can be addressed only in what seem like infinitesimal measures. Who wants to own the global food insecurity problem? Any takers? Why even bother, right?

Well, we'll see. The latest helpful but infinitesimal step comes from Morgan Stanley Research, which asked its equity research analysts to pick stocks from companies that are either girding themselves for or trying somehow to forestall at least one of these seven "sustainability themes," as they call them. Or "horsemen of the apocalypse," as we're calling them.

The chosen companies must meet several criteria. Stocks should promise "a positive return over a shorter time horizon." A year, the analysts say, should be short enough to pique some investors' interest.

Other criteria: The companies are all rated "overweight," because they think that the stock may perform better than the industry average, on a risk-adjusted basis for the next year or 18 months. Lastly, the stocks included in the research should have the potential for at least a 10 percent increase above their current prices, and also have a market cap above $2 billion.

In many cases, the companies selected fall outside the familiar lists of consumer-product, car or industrial companies who are anticipating these trends in their long-term strategies. (Think Unilever, Ford or General Electric.)

Morgan Stanley Research ended up with a diverse group. The top five "sustainability picks" in the U.S., for example, are a mix: Sun Edison, a solar-power provider; Cubist Pharmaceuticals, which develops products for emergency rooms and other "acute care" facilities; Tesla Motors; Whole Foods Market; and Chart Industries, which makes freezing and gas-handling products for medical and food industries.

The research will be updated regularly. Alas, it's unavailable to non-clients. That's okay, though. What's important is that research firms are focusing new lenses on new problems that many investors don't intuitively consider.

Many thoughtful reports put sustainability in front of investors. The utility of the Morgan Stanley Research piece might not be transformational results of the effort, but the fact that they thought to undertake it at all.

Seven Snapshots of 21st-Century Risks:

Climate Change

Source: IPCC WGII AR5 Chapter 19

Source: IPCC WGII AR5 Chapter 19

Water Scarcity

Source: WWAP, prepared with data from FAO AQUASTAT (aggregate data for all countries except Andorra and Serbia, external data) (website accessed Oct 2013), and using UN-Water category thresholds.

Source: WWAP, prepared with data from FAO AQUASTAT (aggregate data for all countries except Andorra and Serbia, external data) (website accessed Oct 2013), and using UN-Water category thresholds.

Vast Urban Waste

URBAN WASTE--The projected growth in urban waste, according to the World Bank's "What a Waste" report. Source: World Bank

URBAN WASTE--The projected growth in urban waste, according to the World Bank's "What a Waste" report. Source: World Bank

Food Insecurity

FOOD INSECURITY--A bigger global middle class will need a lot more food, as demand increases with incomes. Source: FAO and World Bank

FOOD INSECURITY--A bigger global middle class will need a lot more food, as demand increases with incomes. Source: FAO and World Bank

Economic/Energy Inequality

ECONOMIC INEQUALITY/ENERGY POVERTY--A ranking of developing nations by their access to energy. Source: 2012 World Energy Outlook, International Energy Agency.

ECONOMIC INEQUALITY/ENERGY POVERTY--A ranking of developing nations by their access to energy. Source: 2012 World Energy Outlook, International Energy Agency.

Public Health Burdens

PUBLIC HEALTH BURDEN--As nations develop, and lifestyles change, non-communicable disease becomes a much bigger factor in mortality. Source: GIS/World Health Organization

PUBLIC HEALTH BURDEN--As nations develop, and lifestyles change, non-communicable disease becomes a much bigger factor in mortality. Source: GIS/World Health Organization

Demographic Cliffs (Aging)

DEMOGRAPHIC CLIFFS/GRAYING POPULATION--The number of working people per elderly person is projected to decline by 2050. Source: UN World Population on Ageing 2013

DEMOGRAPHIC CLIFFS/GRAYING POPULATION--The number of working people per elderly person is projected to decline by 2050. Source: UN World Population on Ageing 2013

More by Eric Roston (@eroston on Twitter):

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