We need to reassess the role of sustainable investing in advancing global sustainability
2020 will be a critical year for sustainability. The effects of the bushfires and the coronavirus crisis are sobering and have placed supply chains and systems under tremendous pressure. After months of this sustained pressuree are starting to see vulnerabilities show through. That said, these system shocks have highlighted a trajectory for global sustainability: if societies are going to continue into perpetuity, then sustainability and resilience considerations will be crucial for shaping policy and business agendas.
At the moment there have been some major developments in sustainability-related fields. Considering how threats to global sustainability will manifest in a post-crisis society, and how the investor community can mobilise to overcome these challenges is crucial right now. Adopting a holistic view of sustainable investing helps to deconstruct these challenges and highlight viable solutions for building a resilient system.
There’s a clear shift in investor interests, let’s make it count
Over the past decade, interest in sustainable or responsible investing has burgeoned and stakeholders are looking for/expecting proof that their investments are delivering a net positive environmental and social impact. As much as $23 trillion was reportedly invested into sustainable strategies during the first half of 2019. This rapid, almost paradigmatic shift in interests can partly be attributed to better understandings of what constitutes ‘impact’ ‘sustainable’ or ‘ESG’ investing. Industry definitions have evolved and today it is far easier to articulate what it means to invest responsibly: investments that offer competitive risk-adjusted financial returns and the opportunity to materially effect change.
With ever-growing amounts of capital looking to be invested sustainably, there is a real opportunity for the finance sector to address major disparities in health, wealth and climate security.
The pursuit of sustainability means appreciating the system as a whole
It is very easy to approach progress on a sector-by-sector basis and there is a lot to celebrate, particularly in areas such as renewable energy and low-carbon technologies with the global divestment from fossil fuels reportedly hitting $11trillion in 2019. However, when addressing ‘global sustainability’ and the challenges confronting us right now it’s important to think critically about what ‘sustainability’ means and how it can be applied across industries and at different levels. Anchoring the conversation around three key pillars - climate, poverty and health – helps to do this.
Looking to the future: the road ahead
Despite its framing within a sombre discourse/context, the global sustainability agenda is gaining considerable support and 2020 will undoubtedly shape the pace and direction of the next decade of action. It is an exciting, but critical time for global sustainability, development and climate efforts. As we head towards 2030, it is imperative that businesses reflect on how marketplace activities can be aligned with a net-zero future and improve the resilience of global systems as a whole.