Importance of wildlife conservation in points –
The United Nations, with support from K+S and the macondo foundation, has recently published the latest edition of its annual Global Goals Yearbook with the theme being “Planet under Pressure.” The opening quote from UN Secretary-General H.E. António Guterres begins, “The Covid-19 pandemic has plunged us into an acute health and economic crisis, the severity of which has not been seen in nearly a century.” The yearbook is divided into two parts. The first is three articles on each of the topics of resilience, political lessons, economic lessons, and ecological lessons. The second part is “Good Practice” examples from 31 companies in a range of industries and countries. Taken together, the yearbook is a Rorschach Reader for anyone who wants to learn what the world has learned from the ongoing COVID-19 crisis.
The contents of this yearbook are very rich and every reader who cares about a sustainable society, and the challenges and opportunities created by COVID-19, will find articles of particular interest. As an indication of this, I will briefly summarize four articles that particularly struck my attention.
The first is “The Corona Effect: Four Future Scenarios,” by the Zukunftsinstitut presents four possible scenarios of how the corona crisis can transform the world. The first is “Total isolation” where “everyone is against everyone.” It is characterized by de-urbanization, germaphobia, and an almost complete disappearance of public cultural life, particularly in cities. The second is “System crash” where society operates in a permanent crisis. It is characterized by constant tension and conflicts of various magnitudes between nation states as the rise of neo-nationalism competes with the inevitable interdependencies based on economics and trade. Near-shoring become a political ideology, big data becomes more important for both good reasons and bad, cybercrime increases, and personal privacy declines. In “Neo-tribes” there is a retreat into the private sphere. Trust in nation states and supranational alliances has disappeared and is replaced with regionalization, sometimes on a very small scale. There are some positive aspects to this scenario which include new work arrangements and a more sharing and circular economy with a local focus. Except at the very local level, almost all business and cultural events occur in the virtual world.
The most appealing scenario to me is a resilient society in the scenario of “Adaptation.” The global economy strikes the right balance between global and regional trade and online and offline activity. Health is viewed more holistically with the recognition that the health of an individual depends upon the health of society at many different levels. The world understands that global risks require both supranational players as well as local ones connected to each other in networks. Big data, predictive analytics, and artificial intelligence are used in constructive ways. The media plays a more constructive role as well. The result is “and adaptive society that knows how to deal productively with crises.” This article doesn’t put a probability on either of these scenarios, not does it explain the conditions under which each would occur.
“10 Theses on the Coronavirus for the State and Society” by Dr. Markus Engels, Secretary-General, Global Solutions Initiative, provides insights on what should and should not be done in order to obtain the last scenario. His first thesis is “The state and its international communities play the leading role in absorbing external shocks such as pandemics.” Engels makes a strong case for the critical role of democratic governments (Thesis 5 is “Populist heads of state and government are part of the problem, not the solution”), the need for multilateralism, and the importance of empowering local communities and supply chains. He cautions against an overreliance on technical experts, efficiency criteria in delivering public services, and using the pandemic as an excuse to limit basic human rights. He points out that while digital technologies can be effective in enabling educators to cope with the pandemic, it is also contributing to a “digital divide” and increasing social inequality. Engels’s 10 thesis is, “Overcoming global poverty and strengthening climate protection and environmental conservation efforts will be essential to avoid a new era of pandemics.”
“We Are Creating Conditions for Diseases such as Covid-19 to Emerge” by John Vidal builds on this thesis with a focus on biodiversity. (I have written about this before in discussing Anita D. McBain’s report, “Pandemic: The inextricable link between human, animal and ecosystem health and the emergence of communicable disease.” Vidal issues the sobering warning that, “As habitat and biodiversity loss increase globally, the novel coronavirus outbreak may be just the beginning of mass pandemics.” There is a graphic in this article on the loss of species biodiversity that supports this contention and has some absolutely startling facts. These include: (1) every 20 minutes there are 3,500 more humans and we lose one or more species, (2) every 60 minutes 240 acres of natural habitat are destroyed, (3) 27,000 species are lost every year, (4) 70 percent of the world’s known species could become extinct if the global temperature increases by more than 3.5°C, and (5) 75 percent of the world’s fisheries are fully or over exploited. Stress on wildlife from the loss of forests and biodiversity, wet markets, and a global society make for a poisonous cocktail that can breed and spread pandemics.
Finally, “Covid-19 Makes ESG Factors More Financially Relevant” Meaghan Muldoon, Managing Director, Global Head of ESG Integration at BlackRock. COVID-19 has created an unwelcome “natural experiment” to test the resilience of sustainable investing. Some have argued that its rise has largely been due to strong markets which make it possible to integrated environmental, social, and governance (ESG) factors without any noticeable decline in financial returns. Muldoon points out that supporters of sustainable investing have relied on two explanations. The first is that taking account of ESG factors creates more resilient portfolios that can better weather market downturns because many of the causes for them are taken into account through ESG integration. She notes that market returns strongly support this argument, noting that 51 of the 57 Morningstar sustainable indices outperformed their broad market counterparts in the first quarter and that the same is true for 15 of the 17 MSCI sustainable indices outperformed over the same period.
The second is that sustainable investing is the front-end of a long-term and structural shift to sustainability that will “lead to a major reallocation of capital and ultimately a revaluing of assets and risks consistent with these preferences over the course of many years.” The data support this as well. In the first quarter of 2020, global sustainable mutual funds and ETF) brought in $40.5 billion in new assets, a 41 percent increase year-over-year. US sustainable funds attracted a record $7.3 billion for the quarter. The success of sustainable investing is based on an understanding of how material ESG issues are related to financial performance. There is also an increasing realization how the relationship between material ESG issues and the Sustainable Development Goals, a topic I have previously written about. The inevitable risk of sustainable investing is both a consequence of and contributor to a shift from short-term, shareholder-centric to long-term stakeholder capitalism.
These are only four of the 12 excellent articles in this yearbook. There are also the 31 examples of “Good Practice” contributed by the 31 sponsoring companies of this report who contributed their own content. My personal view is that all of these companies are excellent candidates for the recommendations in “3 Ways to Put Your Corporate Purpose into Action.” Whoever reads this yearbook will take away insights that are particularly important to him or her.
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