As a new year begins, we want to take a moment to assess 2017 and the many changes that could unfold globally. A new administration will soon take the helm in the US and with it come many unknowns — more than the usual during a time of transition. We want to pause and acknowledge that the tumult of the last few months is likely to continue, but there is heartening broad-based collaborative work that is also taking shape.
In a few days, we will be sending you our investment and social memos for the quarter, outlining some of our recent actions. In the weeks following the election, markets around the world moved sharply, in an initial response to the unexpected results. US equity markets rallied, led by banks and energy stocks. Globally, basic materials, energy, financial, and low-quality stocks rose sharply, amid widespread expectations of reduced environmental and banking regulation, trade barriers, potentially lower taxes and future infrastructure spending. Over the next few months, our task as investors will be to assess whether these initial dramatic moves in the markets were justified. We expect this to be a period when active investors can add value through judgment and patience.
Now, as January’s political transition unfolds in the US, we may start to see the road map for policy changes and political horse-trading. On some issues like long overdue infrastructure investments, we welcome the potential for consensus, resulting in decisive, timely action. On some others like trade, changes in corporate taxation, and international relations, we remain vigilant to assess the complex impacts of policy changes at home and responses abroad.
There is also a range of issues from healthcare to immigration, the environment, civil rights, and ethical governance, where we may indeed see challenges to the very fabric of our cherished institutions and the planet’s chances for sustainable growth. Government action and global commitments on climate change, already late and muted, could be reversed. Urgent and important limits on carbon and methane emissions, water use and pollution, may all be weakened or repealed. And there could be setbacks on issues of social justice and the rights of women, immigrants, and minorities. These are challenges that compel us to rise up and act as global citizens and responsible investor-advocates.
Encouragingly, a broad coalition of investors and community leaders is evolving, joining us as we bring our skill, tenacity, experience, and commitment to ensuring a sustainable and equitable world. We also have unexpected allies in visionary corporate leaders who have remained steadfast in their commitment to addressing the risks of climate change and inequality. In this new year, our commitment to planet and people remains firm, as does our resolve to be careful stewards of your capital. We are gearing up to ask portfolio companies for transparency and accountability on priority areas, urging them to manage for the long term.
Our efforts, financial and social, will be anchored in responsibility for a sustainable future. To paraphrase another campaign, we seek a future to invest in!