FT Rethink
2022: a tipping point for sustainability?
The need to shift to a sustainable economy is a challenge that can, at times, seem insurmountable. But in amongst the alarming narrative that surrounds the climate crisis it's easy to miss the progress being made, including the concrete steps that policymakers, corporations, investors and consumers are taking not merely to reduce climate change and environmental degradation, but to reverse it. Here we look at some of the sectoral shifts and innovations that could make 2022 the tipping point to achieving net zero and rebuilding our planet's Natural Capital.
Retrofitting buildings
New-build construction shows the power of policymakers, working alongside industry, to meet sustainability challenges, with many governments implementing increasingly rigorous low emissions standards for development and operations of new buildings. But, while targeting clean new-builds is an important step, demolishing the old to build the new is not a sustainable solution1. With existing building operations responsible for 28% of global greenhouse gas emissions, and the large majority expected to remain in use until at least 2040, a retrofit revolution is needed if we are to achieve the goals of the Paris Agreement2.
In New York, inspired by a successful retrofit of the Empire State Building, which resulted in a 40% reduction in the building's carbon emissions and USD 4 million being saved in electricity bills each year3, the Empire Building Challenge has been established. A USD 50 million fund will test innovative retrofit solutions in buildings across the city, including flooring tiles that generate electricity from footsteps and electrochromatic glass which changes opacity to mirror changing natural light.
It's a move that's gathering pace worldwide. In the US, President Biden's Federal Sustainability Plan has set an ambitious target for federal buildings to reach net-zero emissions by 2045, with retrofitting to play a key role4. In the EU, the Commission's Renovation Wave aims to double the current rate of building renovation as part of the bloc's net-zero by 2050 target5. And in the UK, Prime Minister Johnson's Green Industrial Revolution6 will “put homes, workplaces, schools and hospitals at the heart of [the] Green Recovery,” with grants to decarbonise public sector buildings and retrofit millions of homes to improve energy efficiency7.
Read also: Is sustainable policy working
Slower fashion
Fast fashion, often in the sustainability spotlight, epitomises the linear take-make-waste model. With demand driven by low price points and quickly changing trends the industry is responsible for 10% of global carbon emissions, 20% of industrial water pollution, and 92 million tonnes of textile waste annually. The cheap polyester fabrics that make the industry possible send more than half a million tonnes of microfibres into the ocean each year, some of which is consumed by marine life and returns to become part of our food chain8.
But as consumer awareness of the industry's impact grows, so too do opportunities for sustainable fashion brands. Patagonia, which is targeting net-zero emissions across its entire business by 2025, and is moving away from a demand-based model, has seen revenue quadruple over the past decade. A growing number of new labels are finding success in similar ways, taking market share by openly eschewing speed, keeping waste to a minimum by producing only to order, and putting sustainability and ethical sourcing at the forefront of their offering.
Reselling platforms, too, are disrupting the industry – in 2019 the resale market grew twenty-one times faster than the conventional clothing industry, and in the US is expected to more than triple again in value over the next decade9. It's a move that's vital if we are to successfully make the shift to a sustainable CLIC™ economy, one that's Circular, Lean, Inclusive and Clean. To stay within the Paris temperature target consultants Mckinsey & Company estimate that, “by 2030 we need to live in a world in which one in five garments are traded through circular business models10.”
Plastic that doesn't last
Bio-plastics made from renewable biomass sources, such as sugarcane or algae, have long held the promise of a sustainable, biodegradable, alternative to traditional fossil-fuel based polymers. Despite extensive research and entrepreneurial efforts, too often these innovations have failed to make it to market, or to realise fully their potential to disrupt the traditional plastics industry. The problem, according to Maria Negut of European Bioplastics (EUBP), the EU trade association for the bioplastics industry, is a lack of supportive policy: “Innovation takes time and it is costly. If a company develops an innovative product but then has barriers in entering the EU market, the incentive to continue innovating will be lost. A supportive policy framework…is crucial to the development of a strong and robust bioplastics sector11.”
This year that looks set to change. As part of the European Green Deal the EU Commission launched a public consultation on bio-plastics across the first three months of 2022. With the consultation now closed the Commission is expected to adopt its first ever policy framework on “bio-based, biodegradable and compostable plastics” in the second quarter of this year12. This, the EUBP hopes, will lead to further innovations and a rapid expansion of the bio-plastics industry.
Mapping from space
Costa Rica has become the first tropical country to reverse the damage of decades of deforestation, an outcome achieved by taxing fossil fuels to allow them to literally invest in nature. The USD 500 million produced by the ring-fenced tax has funded payments to farmers to protect and re-grow rainforest, supporting jobs and providing an important resource in their sizeable tourist industry. While Costa Rica's success provides one blueprint, solutions are not always straightforward to apply in other contexts. One of the key challenges is to identify the impact of policy on environmental outcomes at the macro level, and this is an area where technology may offer universal solutions.
Satellite technology has been used to map the speed and location of forest clearing for decades, mapping the scale, pace and location of tree loss, and even providing real-time alerts to authorities. The latest generation of satellites are now extending this capability to imaging much harder to spot greenhouse gas emissions, providing the ability to evaluate and pinpoint where and how emissions are impacting the planet. Canadian company GHGSat, which joined the field in 2021, plans to launch three of their leading edge satellites this year, each of which will represent an upgrade even on their ground-breaking 2021 versions13. GHGSat's satellites are able to detect methane emissions one hundred times smaller than are visible to current satellites, and to pinpoint the precise location of emissions. This latest technology will provide firms with data to direct on-the-ground decision-making, and will give governments much greater ability to measure and react to the impact of emissions policies.
The scale of the climate crisis must not be downplayed – global carbon emissions, after a brief respite in 2020, are again on the rise14, and we have now passed four of the nine planetary boundaries in which humanity can live safely. But it is important, too, to see the progress that is being made and the opportunity that exists, the opportunity to invest in our future by investing in the organisations that are rising to the sustainability challenge.
Once a story of activists taking on recalcitrant industry, the sustainability narrative has shifted. The challenge is now a joint effort, with business and government joining together to create opportunities for employment, for energy cost savings, for revenue growth, and for investment returns – all while doing good.
1 https://realassetinsight.com/2021/07/12/riba-demolitions-should-be-stopped-to-lower-emissions/
2 https://architecture2030.org/why-the-building-sector/#:~:text=THE%20BUILDING%20SECTOR%20Buildings%20generate%20nearly%2040%25%20of,carbon%29%20are%20responsible%20for%20an%20additional%2011%25%20annually.
3 https://www.washingtonpost.com/graphics/2020/climate-solutions/empire-state-building-emissions/
4 https://www.sustainability.gov/federalsustainabilityplan/buildings.html
5 https://energy.ec.europa.eu/topics/energy-efficiency/energy-efficient-buildings/renovation-wave_en
6 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/936567/10_POINT_PLAN_BOOKLET.pdf
7 https://www.gov.uk/government/collections/public-sector-decarbonisation-scheme
8 https://earth.org/data_visualization/the-9-biggest-fast-fashion-statistics/
9 https://www.forbes.com/sites/gulnazkhusainova/2021/01/28/the-secondhand-market-is-growing-rapidly-can-challengers-like-vinokilo-thrive-and-scale/?sh=7aeb16d0ccb6
10 https://www.mckinsey.com/~/media/mckinsey/industries/retail/our insights/fashion on climate/fashion-on-climate-full-report.pdf
11 https://packagingeurope.com/comment/how-is-the-european-bioplastics-industry-seeking-to-gain-more-regulatory-approval/8091.article
12 https://ec.europa.eu/environment/topics/plastics/bio-based-biodegradable-and-compostable-plastics_en#:~:text=%20Bio-based%2C%20biodegradable%20and%20compostable%20plastics%20%201,the%20part%20of...%205%20Studies.%20%20More%20
13 https://www.smithsonianmag.com/science-nature/a-new-generation-of-satellites-is-helping-authorities-track-methane-emissions-180979181/
14 https://www.iea.org/reports/global-energy-review-2021/co2-emissions
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