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Investing in Sustainable Resources

investing in sustainable resources

We know that we should all be concerned about sustainability, especially as we navigate a global pandemic. But let’s not forget why:

Reminders of Why Sustainability Investing is Important:

Currently there are 7.8 billion people living on earth and the United Nations World Population Prospects predict that in 2055 this number will reach over 11.2 billion people.

Global life expectancy has also improved in recent years but the earth’s capacity and resources are limited. Environmental pollution is one of the greatest societal challenges we are facing today. 

In the last century the earth’s temperature has risen unusually fast. The planet’s average surface temperature has increased about 0.9 degrees Celsius since the late 19th century. The emission of greenhouse gases into the atmosphere is responsible for global warming and has a far-ranging impact on the environment. Consequently, sea levels are rising, oceans are becoming warmer.

In addition, longer and intense droughts threaten crops, wildlife, freshwater supply, and ultimately our future existence. Governments have realized the severity of these developments and responded with new policies to promote sustainable development.

Impact investors see an opportunity in sustainable development. They do not only focus on the financial return but also on the long term impact on the environment.

Impact Investing is a response to social environmental problems, while generating a financial return. Investing into sustainable solutions is one of the best ways to tackle our sustainability issues from a realistic perspective. 

What is sustainability?

To achieve a sustainable future, we need to find a way to meet our current demands while protecting the environment and resources for the future.

To develop sustainable means “understanding how to meet the needs of the present without compromising the needs of the future generations to meet their own needs” (Brundtland Commission, 1987).

What are Sustainable Resources?

A resource is anything that is useful for people. Natural resources are differentiated between renewable and non-renewable resources.

  • Renewable Resources can be used again and again, and are therefore sustainable such as water, wind, sun and wave energy.
  • A Non-Renewable Resource will eventually be used up and is consequently not sustainable in the long run. An example would be fossil fuels, coal, gas and oil.

New governmental policies as well as a cultural shift in support of sustainability transform the world´s economy. Sustainability has become mainstream which is one of the factors that makes natural resources an attractive investment.

Author Marta Maretich wrote an article in which she elaborates on how the new awareness for sustainability drives impact investment in natural resources. She focuses on the development in different natural resource areas:

  1. Oceans – Governmental policies such as the National Oceans Policy that was issued by the US in 2013, in coherence with other governments “including Australia, South Africa, Namibia and the Philippines in establishing comprehensive, future focused policies for oceanic resource management”. The author points out that “these developments set the stage for a mini-boom in sustainable marine businesses in areas like fishing, aquaculture and energy and mineral extraction”.
  2. Land – Land is a resource that offers a variety of opportunities for impact investing. “Essential to human life and prosperity, land produces food, water, wood, fiber, fuel and minerals and, when managed responsible, it also provides vital ecosystems”.
  3. Forestry – “New technologies are expanding the horizons of sustainable forestry. Innovations, such as the use of drones and sophisticated geo-mapping techniques, are advancing the science of forest management, making it possible to do more with woodlands while we protect them. The link between agriculture and forest habitats is contributing to the search for ways to bring prosperity to some of the world’s poorest communities.”

We all use a range of resources every day from the energy we use in our homes and the food we eat to the water, products and raw materials we consume. “We need to be more sustainable in the way we use these resources by preventing and reducing waste, being more efficient in the way we use resources and using more renewable resources” (Environmental Protection Agency).

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May 6, 2020

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