Companies, investors and governments should prepare for a major reallocation of capital to another very important issue: climate change.
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The major challenges and the needs of our time are the issues that are at the center of gravity of the entrepreneurship and impact investing. On this occasion, I focus on the climate changethat -from my perspective – exemplifies more clearly the whole equation: if there is a challenge that does not escape anyone, this is it. As it says in the title of the book of the canadian journalist Naomi Klein: “This changes everything”.
2019 was the year that Greta Thunberg, the famous environmental activist and a Swedish 16 years old, went to the UN to tell ‘the leaders of the world’: “For more than 30 years, the science has been clear… whole Ecosystems are collapsing. We are at the beginning of a mass extinction. And the only thing they can talk about is money and fairy tales of economic growth everlasting.”
How exaggerated? To put in context, we think of the fires in Siberia and the Amazon, or the rapid melting in the Arctic, which also marked the last year —the second warmest year, after 2016, and the estimation of environmentalists about billion dead animals by the fire in Australia.
Fortunately, on the reverse side of the coin, signals of opportunity are also abundant.
The Global commission Adaptationwhose mission is to promote solutions to prepare for the warming, reports that only for that, they require investments by 1.8 trillion dollars over the next 10 years and that these could yield bene ts net 7.1 trillion (count short).
The need is very clear: according to the Paris agreementto prevent the increase of global average temperature, product of the greenhouse effect, pass 1.5 degrees compared to pre-industrial levels, just to avoid the disaster: floods, epidemics and droughts.
Opportunity: renewable and clean energy, sustainable mobility, agro-food and sustainable, from housing to green up fashion with social responsibility, approach to production and consumption local, the three R’s (reduce, reuse and recycle), industrial design, eco-friendly and the concept of circular economy, responsible tourism, protection and management provisions of the forests, the sea and the water, environmental education…
The same thing can fit large investments in wind farms that inventors and innovators in new products or models of economy collaborative.
In addition, there are resources available to fund: low interest rates and a financial sector that starts to take awareness and a willingness to invest seriously in ESG (acronym for: environmental,social and government, its ) and impact investing.
There is the letter that was published Larry Fink, CEO of BlackRockrma, which manages more than $ 7 trillion in assets, which anticipates that sustainability will be an essential part of your strategy and investment portfolios and risks. “Climate change is different. Even if only a fraction of the projected impacts are realized, this is a crisis much more structural and long-term. Companies, investors and governments should prepare for a major reallocation of capital.”
Between Greta Thunberg and Larry Fink may be a sea away, but there is a bridge of possibility, which is that of awareness: there should bloom in the impact investing and social entrepreneurship. It is the basic thing to make a virtue out of necessity and a solution. But more than speeches and letters, which urge to action.