The Middle East crisis of 2026 has done what a decade of advocacy could not: it has succeeded in dragging the conversation about sustainability out of the climate-only shadows and placed it squarely in the spotlight of resilience.
When tankers slow in the Strait of Hormuz, fertiliser shipments are delayed, and an oil price spike hits European power prices within hours, the case for electrification, distributed generation, and regenerative agriculture stops being a long-term argument and becomes a short-term risk-management target, and indeed, even a national security objective. The investment implications are already clear across our portfolios.
1. Electrification as insulation
Every kilowatt-hour of power use electrified is a kilowatt-hour less exposed to the oil shock waves that the Middle East crisis has reintroduced. It can still be impacted by a surge in oil & gas prices, but the impact is indirect, and is mitigated by investments in modernising electrical grids and making them more flexible. These are significant infrastructure investments that we were exposed to via several of our portfolio holdings. They are not thematic plays; they are the basics of a more stable energy system. Notably, grid-related capex guidance across this cohort has moved up in the weeks since the crisis broke, but they were always seen as benefiting from secular demand, even in the depths of the recent sustainability winter.
2. Renewables and strategic autonomy
The Middle East crisis is reframing the value of renewables: they are a domestically sourced form of energy. Where a country generates and deploys renewable capacity, it acquires a form of strategic autonomy that a pipeline cannot provide. The dependency on the equipment side is real, but it gives autonomy to the buyer until this equipment needs to be replaced. In our portfolios, this theme is expressed through companies that sit in the critical conversion and control layer of renewable systems.
3. Batteries: a strategic stockpile
Batteries used to be just a transport story. The discussions around electricity supply resilience after the 2021 Iberian blackout had already tilted the debate in favour of resilience. The recent surge in data-centre-related investments has pushed that logic further. At scale, energy storage systems can be the electricity equivalent of a petroleum stockpile, with the added advantage of being distributed and reusable. They can also increase the overall capacity use of grids (which are typically used at 50% of their maximum). Companies in this space have become less cyclical and more infrastructural – a shift that revalues them as hedges rather than thematic bets. Utility storage orders in Europe were up materially in 2025, with several grid operators explicitly citing geopolitical volatility as the trigger for acceleration.
4. Food systems’ fragility
An underappreciated second-order effect of the Hormuz disruption is the impact on fertilisers: about a fifth of global ammonia and urea goes through the Strait or depends on Gulf-sourced natural gas feedstock. Price volatility in ammonia, urea and potash is already reshaping farm economics, particularly in import-dependent Europe and South Asia; this could have a delayed but significant impact on food prices over time. Our exposure here is deliberately on the efficiency side of things; for example, companies that help cut herbicide use, companies offering precision-agriculture technologies which support more accurate application of inputs, or companies providing irrigation systems that help growers improve water efficiency and crop resilience. The best hedge against fertiliser volatility is needing less of it. Regenerative agriculture extends the same logic. Cover crops, reduced tillage, livestock integration, and on-farm nutrient cycling are difficult to capture directly in public equities, but their beneficiaries are visible in the portfolio. Some of these holdings are not pure regenerative players, but collectively they push the food system towards a diversified, lower-input structure that is intrinsically more shock-resistant – the agricultural equivalent of a distributed grid.
What resilience means for investors
Resilience is having its moment in the sun for three reasons. It is bipartisan: no political tradition objects to being less fragile. It is bottom-up: it accrues at company, grid and farm levels, rather than requiring global consensus. And it emphasises the importance of managing risk. Given this, we expect some of the firms offering sustainability solutions to become long-duration compounders. The beginning of 2026 has added a near-term shock that makes the case more tangible.
For impact investors in listed equities, this is a welcome development: our portfolios are increasingly scored not only on their contribution to long-term sustainability outcomes, but also on their usefulness in navigating the turbulence of a more disordered world. Impact and resilience have a lot in common; it just took an oil price shock to make it visible.
Find out more in the full Impact Report 2025, which you can access here:
The opinions expressed herein are correct as at 8 July 2026 and are subject to change without notice. This information should not be relied upon by the reader as research or investment advice regarding any particular fund, strategy or security. Past performance is not a guide to current or future results. Any forecast, projection or target, where provided, is indicative only and is not guaranteed in any way.
The views and opinions expressed by fund managers (internal or external) may differ from the house view. They are shared for informational purposes and do not constitute investment advice or a recommendation.
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