2018 was quite an eventful year for those of us immersed in the sustainability discourse. From a corporates to an individuallevel, a majority of us worked towards righting the wrong metrics of our investments and lifestyles. Climate change risk became material to investors and mitigation and adaptation became a key policy issue across the globe a at state and an international policy levels. Weather devastation took a toll on us; from South Africa beingat riskof “Day Zero” – running out of waterto ravaging typhoons in Asia and Hurricanes in America andcloser home- floods turning roads temporary to rivers in Kenya. Read Also: Flooding: A Call for Climate Action In Africa.
The fate of the Planet- 12 Years Left
The alarming message by IPCC that we have 12 years left to avoid the potentiallydevastating and irreversible impact of climate change wasa “wake up” call for action tolimit warming to 1.5ºC The report cautions irreversible damage on the planet if global warming is not limited to 1.5 degrees Celsius.
“If greenhouse gas emissions continue at the current rate, the atmosphere will warm up by as much as 2.7 degrees Fahrenheit (1.5 degrees Celsius) above preindustrial levels by 2040, inundating coastlines and intensifying droughts and poverty. The estimated $54 trillion in damage from 2.7 degrees of warming would grow to $69 trillion if the world continues to warm by 3.6 degrees and beyond”
The report caution that failure to keep temperature increases below 2°C would increase the risks to human well-being, ecosystems and ultimately sustainable development. Some of the ecosystemsthat supportthe millions of people are dying. Declining insect population, and dying of coral and kelp forest and the threatof extinction of some mammals like the white rhino are some of the 2018 trends thatwe had to deal with.
The Ocean Dilemma - More Plastics than Fish in the Sea
A McKinsey report in 2015 identified a worrisome trend in plastic waste where a majority (60%) of the approximately 8 million tonsof plastic waste leaking into the world emerge from handful Asian countries- China; Indonesia; the Philippines; Thailand; and Vietnam. UNEPestimates the negative externality of plastic production at USD 40 billion annually —equivalent to the GDP of Tunisia and as per the International Monetary Fund (2017) - exceeding the plastic packaging industry’s profit pool. Ellen MacArthur Foundation cautions;
“In a business-as-usual scenario, the ocean is expected to contain one tonne of plastic for every three tonnes of fish by 2025, and by 2050, more plastics than fish [by weight].”
Not all is gloomy, as iconic multinationals in the food sector that have been identified as a contributor to plastic menace have launched ambitious initiatives to right their plastic wrongdoings. McDonalds and Coca-Cola have committed to 100 percent recyclable and certified packaging materials by 2015 and 2030 respectively. The interventions are in response to increased global concern over the prevalence of plastic waste.Read Also: The Plastic Pollution Problem: Let’s Change the Tide
Oil Companies Acknowledge Climate Change Impact on their Portfolio
Oil Companies remain multinationals with the highest global footprint. Consequently, they arguably yields the largest environmental footprint. For decades, the oil companies have reaped profits year after year while simultaneously contributing to global warming. Nevertheless, the turnaround in the oil sector is stunning and the companies are realizing that even the fossil fuel sector is not immune to climate change. The oil companies admit suffering fromeffects of climate change forces. Oil giantChevron Corporation, the largest oil and gas producer in the Gulf of Mexico, lost $1.4 billion because of reduced production and added costs for repairs and maintenance for both offshore and onshore facilities as a consequence of hurricanes Katrina and Rita.
Take a case ofØrsted, a Danish Oil and Natural Gas multinational that is now a leading renewable-focused power utility with an installed offshore wind capacity of 3.9 GW. The move to transition to renewables not only yielded reduction of carbon intensity by an equivalent of half of Denmark’s entire CO2 reduction in 2006,but as well, Ørsted’s installedoffshore wind capacity of 3.9 GW could meet more than 10 million people’s annual power consumption. The move was a win for environment and stakeholders as Ørsted’s net profit increased by 53 percent to $3.37 billion in 2017 compared to 2016. Ørsted continues to disinvest in coal, oil and gas business but aggressively investing in renewable energy.
The year 2018 had mixed outcomes, but the outcomes already set an agenda for 2019- reduce environmental footprint. So, as corporates define their missions explicitly around sustainable investment and align around value-based business models, and countries continue to invest in mitigating and adapting to climate change, we can only imagine how this could play out in 2019