At another level, we explore a wider range of potential future environments that the rest of the world may not currently be paying attention to. This involves identifying nascent, high-impact drivers and possibilities of how the world may fundamentally change, before these are recognised and priced by the markets. For example, more than five years ago, technological disruption and the role of technology as an accelerator was less tangible for most investors than it is today. More recently, investor awareness and efforts surrounding climate change have gained momentum globally. We had been analysing these trends and developing our thinking for some years now. Thinking through such potential future scenarios enhances GIC’s thought process when reviewing our longer-term investment strategies.
These scenarios and impacts are also shared internally across the asset groups, and where relevant, are incorporated in the bottom-up underwriting process and stress-testing of investments.
Ultimately, scenario planning is a good demonstration of how GIC seeks to prepare, not predict, amidst a rapidly changing global investment environment.