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Nearly half of 18- to 34-year-olds planning SRI investment, says Triodos; Big Apple takes bite out of building emissions; fresh drives to cut food waste
The Greek playwright Euripides knew a thing or two about the human condition. Two and a half millennia after his birth, his observation about young people still stands true. “Youth is the best time to be rich”, he wrote, “and the best time to be poor”. How young people use their wealth is changing, however. According to new research from Triodos Bank, one in five (19%) of UK investors, and nearly half (47%) of 18- to 34-year-olds, plan to invest in a socially responsible investment (SRI) fund. Among millennials, 56% are galvanized to do so by the tide of “bad news” in the press, particularly natural disasters (14%), the 2008 financial crisis (14%) and the fossil fuel divestment movement (13%). The bad news effect drops by 30% when the appetite for so-called “resist investing” is averaged out across all age groups.
The new research fuels an upbeat assessment of the UK market for ethical investment, which Triodos estimates will be worth $48bn by 2027, up 173% on current levels. The survey also reveals that 55% of investors want their money to support companies with strong social and environmental records. For its predictions to prove true, however, an awareness-raising drive is imperative. At present, 27% of UK investors have never been offered an opportunity to invest ethically.
Over the last decade or so, ethical investment has gradually grown in size the world over. According to the market data firm Statista the value of SRI funds in Europe nearly doubled between 2010 and 2016 (from €251bn to €476bn). The most recent data for the US, meanwhile, suggests as much as one in every five US dollars under professional management is invested according to SRI strategies.
This supposes a generous definition of SRI, incorporating all kinds of negative screens (such as pornography, arms and tobacco) as well as capital directed to specifically responsible firms. In 2016, the Global Sustainable Investment Alliance, which adopts a similarly broad set of criteria, valued the global SRI market at a staggering $22.89trn of assets under management. This marks a 25% increase over two years. The fastest-growing market between 2014 and 2016 was Japan, followed by Australia, New Zealand and Canada. In terms of assets, the largest three SRI regions in the world are Europe, the US and Canada, respectively.
Norway threw down the gauntlet late last year when it announced plans to divest its national sovereign-wealth fund (financed through the country’s oil revenues) of oil and gas investments worth $37bn. More recently, 90 institutional investors representing more than $6.7trn in assets under management sought to use their financial muscle to reduce the impact of palm oil production on the world’s forests. In a letter sent last month, the investors insisted that the Roundtable on Sustainable Palm Oil (RSPO), which runs an influential sustainable certification programme, tighten its standards to include stronger provisions for protecting high carbon stock forests, peat soils and the human rights of plantation workers. The RSPO is set to release revised guidance for palm oil companies in November. The guidance will influence the direction of sustainable palm oil production for the next five years.
Big Apple to take bite out of building emissions
THE BIG Apple is facing the near-term prospect of having to take a big bite out of its climate footprint. Under a new legislative proposal, landlords of New York City’s largest buildings would need to cut their energy use by one fifth (20%) by 2030. The proposed bill, which would affect around 50,000 buildings in the densely packed metropolis, is being put forward by City Councillor Costa Constantinides. As chair of the city government’s Committee on Environmental Protection, Constantinides has spent eight months heading up a consultation involving both green groups and the real estate industry. The findings of this process are included in the recently published Blueprint for Efficiency report. In a first-of-its-kind announcement, New York City mayor Bill de Blasio last year declared that all buildings over 25,000 square feet would face mandated fossil fuel caps.
New York City’s energy-efficiency drive reflects a trend among US cities to rally behind climate initiatives after the federal government’s decision in 2017 to withdraw from the Paris Agreement. Shortly after this unilateral decision was taken by the White House, 125 city mayors (a figure that has since more than doubled) vowed to honour the US promise to cut carbon dioxide emissions. As part of that pledge (which also counts more than 2,100 businesses and investors), Bill de Blasio passed Executive Order 26. This two-page order commits the city to deliver climate actions that are “consistent with or greater than” greenhouse gas emission reduction goals of 80% by 2050. Buildings mark an obvious starting point, given that they account for two-thirds (67%) of city-wide emissions through the use of natural gas, electricity, heating oil, steam, and biofuel.
To help other US cities follow New York’s example, Bloomberg Philanthropies is spearheading a $70m competition to support the carbon reduction plans of 20 “leadership cities”. The winners of the American Cities Climate Challenge will receive a minimum of $2m each over two years. The successful entrants will be announced after Bloomberg Philanthropies (the charitable arm of the data and media firm Bloomberg, co-founded by former New York City mayor Michael Bloomberg) completes site visits of the short-listed cities this month.
City-led initiatives to reduce the carbon footprint of building stock is not only a US phenomenon. Municipal leaders in Paris, Stockholm, Sydney and London are among a coalition of 19 global cities that have signed the new Net Zero Carbon Buildings Declaration, committing to ensure all buildings in their localities will meet net-zero carbon standards by 2050. The commitment, which will necessitate a mix of energy efficiency measures and the promotion of renewable energy, applies to old as well as new buildings. In addition to the buildings’ climate impacts, outdoor air pollution caused by energy used in buildings is a contributor to premature death. In Europe alone, the deaths of an estimated half a million people are exacerbated by air pollution, according to the World Health Organisation.
Walmart among companies taking action to curb food waste
THERE CAN be fewer more telling images of retail-related urban waste than the sight of a rusting shopping trolley half-submerged in a canal or dumped down a dingy alleyway. So news that US supermarket chain Walmart has refurbished a staggering 791,000 shopping trolleys over the last three years marks a welcome development. The move, which helped eliminate the need for 22,000 tonnes of metal, is part of a wider anti-waste drive at the world’s largest retailer. According to its latest sustainability report, Walmart successfully diverted 78% of waste globally last year. The retail giant has set itself the goal of sending zero waste to landfill in all its operations in Canada, Japan, the US and the UK by 2025 (against a 2016 baseline). Asda, the company’s UK arm, already sends zero food waste to landfill or combustion without energy recovery.
According to a new report from Boston Consulting Group (BCG), the volume of food wasted globally is projected to increase by 30% by 2030 unless urgent action is taken. Each year, 1.6bn tonnes of food are either lost before they reach people’s tables or wasted thereafter. That figure could hit 2.1bn tonnes by the end of the next decade, BCG warns. The wasted food represents a cash value of $1.5trn. With 815m people currently undernourished and with wasted food accounting for 8% of global greenhouse gas emissions, the issue of food waste has major social and environmental implications.
BCG’s new research identifies 13 “concrete initiatives” that the private sector can take to reduce food waste. The steps range from awareness-raising measures, such as working with farmers to improve harvesting techniques or changing packaging to engage consumers, through to investing in supply chain infrastructure (notably cold chain facilities) and improving supply chain efficiencies (by setting key performance indicators for food loss, for example). Progressive action by food companies could reduce the economic value of food waste by $700bn per year, BCG says. Industry leaders could also see other knock-on commercial benefits, the firm notes. Research published last year by BCG suggests that top social and environmental performers post profit margins that are on average 12.4 percentage points higher than median performers.
Municipal authorities also have a role to play in reducing food waste. Leading the way is a coalition of 23 global cities, which last month committed to halve waste sent to landfill and incineration by 2030. The non-profit C40 Cities network behind the Advancing Towards Zero Waste Declaration notes that that food scraps sent to landfill convert into methane, which has a global warming potential rating 25 times higher than carbon dioxide. The signatory cities include Paris, Tel Aviv, Toronto and Milan, among others.