The two keys

The way in which humanity consumes Earth’s resources has triggered a slow-moving catastrophe. To reverse it, we must act fast. But the problem of resource sustainability is an indicator of two even deeper problems. And while the—often surprising—solutions to these problems are entirely achievable, investors must fulfil a critical role if they’re to be realised in time. Investors who answer the call won’t just change the world for the better. They’ll be the beneficiaries of a truly extraordinary investment opportunity.

In the forest of the Brazilian Amazon, a man thought to be in his 50s picks up his axe and prepares to fell a tree¹.

But he’s no deforester. Indeed, the man is believed to be the last surviving member of a tribe destroyed along with their home by deforesters in the 1990s. There are around 113 uncontacted tribes in the Amazon, a figure arrived at as deforestation revealed their existence. Globally, an area of forest the size of South Africa has been lost since 1990².

Meanwhile, Chantel Comardelle’s band of the Biloxi-Chitimacha-Choctaw tribe await the hurricane season with dread. They live on Isle de Jean Charles, Louisiana, 98% of which has been submerged beneath the Gulf of Mexico since 1955.

“Once our island goes, the core of our tribe is lost,” says Chantel. “We’ve lost our whole culture—that is what is on the line.” As the waters rise, Chantel and 59 others look set to join tribe members who have already left as America’s first climate refugees, of there could be 200 million worldwide by 2050³.

The salient problems

These stories are tragic symptoms of the two overlapping, yet distinct, resource sustainability challenges we face today.

The first is depletion—many of the resources we rely on are limited and/or cannot be obtained without unacceptable damage to habitats.

The second is pollution—many of the resources we use can’t be consumed without toxic effects on ecosystems and the climate.

Our ability to exploit resources has powered human progress, bringing prosperity to billions. But it did so at a rate that eventually matched and then moved far beyond the limits of resource sustainability.

Therefore, to reverse the unfolding catastrophe, many argue that we must slow down or even reverse our progress. But this is unrealistic—to force that genie back into its bottle would require a society of such tyrannical oppression that we’d lose far more than we could possibly gain.

The argument also assumes—wrongly—that resource sustainability is fixed. The truth is we’re surrounded by functionally limitless matter and energy, of which we exploit only a tiny proportion. And almost all of it could be consumed sustainably—if we only knew how and were sufficiently motivated to find out. For instance, simply burning a lump of coal releases a little energy and a lot of CO2. But if we could convert it entirely into energy, it’d power a light bulb for 29 million years⁴.

The deeper problems

So, the problems of resource depletion and pollution are expressions of two deeper problems.

The first is that we need more of the right kind of knowledge, so we can unlock all of the materials and energy we need sustainably.

The second is that we need the right kind of values to be spread as widely as possible, so we’ll be driven to seek and use that knowledge.

So, the problem of resource sustainability is, at bottom, the result of our progressing faster than we’ve acquired the knowledge and values we need to do so sustainably. Advancing knowledge and values, then, are the two keys to resource sustainability—and we need investors to help turn them.

We also know that resource unsustainability doesn’t scale uniformly with progress—evidence that we’re already acquiring the knowledge we need. For instance, since 1970, the US population has grown 40% and now drives twice as far annually. And yet, their emissions of five air pollutants dropped two thirds over the same period, CO2 emissions are falling and energy use has levelled off⁶. Meanwhile, deforestation has fallen by over 50% in the last quarter-century⁷. And the Environmental Performance Index, which has scored 180 nations based on an aggregate of environmental measures for over a decade, has reported improvements in 178 of them⁸. Thus, investors can accelerate these trends by investing in businesses that aim to discover and deploy better knowledge, so we can further renegotiate the relationship between progress and sustainability through technology.

These positive signs shouldn’t be downplayed, for they show that we really can change our future. But they also shouldn’t be overstated. Even maintaining our current pace and trajectory demands that we keep our foot firmly on the pedal. And failing to floor it presents significant dangers.

Investing in change

Take, for instance, climate change. Progress has made a difference—CO2 emissions seem to have plateaued at about 36 billion tons a year. But that’s still extraordinarily perilous. If we’re to avoid catastrophic warming, our emissions need to plunge—and there’s no sign of that happening⁹. While the obvious move for investors is to finance green initiatives in high-emission countries, it’s worth remembering that a country’s CO2 output tends to decline as it reaches a certain level of prosperity¹⁰. Therefore, investing in green and prosperity-spreading initiatives in developing countries will help their emissions peak much lower, much sooner.

Thanks to a powerful feedback loop, momentum in resource sustainability investments will only grow over time: since prosperity elevates human values, prosperity-spreading ventures will grow the worth of investments in knowledge acquisition and its applications. In turn, this knowledge will improve health and safety throughout society, further driving prosperity.

So, investors who act sooner won’t just be doing the right thing. They’ll be taking full advantage of what could be the biggest investment opportunity in our lifetime.

Jonathon Mulholland is a UK-based writer with an academic background in philosophy and psychology. His interests include science, technology, history, religion, secular spirituality and intentional living. He blogs at thedeliberative.com.

Please note that Jonny’s views and opinions are his own and not necessarily a reflection of those of the Lombard Odier Group.
¹ The Guardian 
² UN Food and Agriculture 
³ National Geographic 
⁴ PBS 
⁵ Pinker, 2018
⁶ US Environmental Protection Agency, 2016
⁷ UN Food and Agriculture Organisation, 2015
⁸ Environmental Performance Index
⁹ Pinker, 2018
¹⁰ Our World in Data