rethink sustainability
Greta thrives in the eye of the climate storm
Greta Thunberg dominated the UN Climate Change Summit with her scathing comments to world leaders.
"You have stolen my dreams and my childhood with your empty words,"she said in an unusually emotional speech. "We are at the beginning of a mass extinction and all you can talk about is money and fairy tales of eternal economic growth - how dare you!"
Looking back just 12 months, Thunberg was sitting alone outside the Swedish parliament protesting. Her tenacity, however, has shaped and inspired youth activism at an unprecedented scale. Prior to her speech at the UN, her trip to the US via the sea in order to avoid air flight was fully documented and millions turned out around the world at protests, many of them children, demanding action on behalf of their generation. These protests may be remembered as the largest global demonstration in the fight against climate change, marking a distinct change in the level of social pressure behind the transition to a low-carbon economy. And more protests are expected.
Thunberg’s stance has brought disdain from some sides, while others have hailed her bravery at taking the mantle of leadership. But the timing of the youth movement reflects the growing urgency to address climate change at the system level - a report last week from the Intergovernmental Panel on Climate Change (IPCC) highlighted that sea levels are rising faster than predicted. The report warned extreme floods on a scale historically seen only once a century could become an annual occurrence by 2050. One result, according to the report, could be population displacement in the hundreds of millions, even if global warming is limited to 1.5°C.
But did Thunberg’s uncompromising intervention make any difference?
The publicity garnered from Thunberg's activities has been monumental but and has helped to galvanise political will. Over 60 countries at the UN summit have now committed to plans to reduce greenhouse gas emissions to net-zero and others are hoping to announce similar ambitions by the same time next year. 2020 will be a particularly telling year, as countries are expected to strengthen their Nationally Determined Contributions (NDCs), five years on from the Paris Climate Agreement.
Ireland, for example, made a commitment to phase out fossil fuel exploration, making it one of the first countries in the world to get out of oil and gas production. France called for a trade instrument to address emissions related to imports, whilst Switzerland confirmed its commitment to be climate neutral by 2050. Greece announced it will get rid of single-use plastics by 2021. Last week, Russia also ratified the Paris Agreement
Companies are also increasingly working towards a more sustainable, low-carbon economy. Amongst the action taken by companies has been a sustainable transition bond market set up by Credit Suisse and the Climate Bonds Initiative, aimed at broadening the green bond market. The One Planet Business for Biodiversity alliance - a coalition of 19 companies including Nestle, L’Oréal and Danone - was launched to restore bio-diversity within supply chains. Power company Orsted said it will stop using coal by 2022, and will be carbon neutral by 2025 while Iberdrola said emissions were reduced to a quarter of those of similar energy companies. The maritime sector, where shipping accounts for 2.2% of global emissions, is making moves to have ships with zero carbon emissions on the seas by 2030.
Many investors are beginning to take concrete action too. An alliance of some of the world's largest pension funds and insurance companies committed, last week, to carbon-neutral investment portfolios by 2050. Initiated by asset owners such as Allianz, Swiss Re, Zurich and Nordea Life and Pension, this alliance is responsible for managing over 2.4 trillion USD in investments. They continue in their efforts to encourage other asset owners to decarbonise their portfolios.
At Lombard Odier, we believe we are in the midst of a Sustainability Revolution. In our view, companies who have the farsighted vision to be committed to sustainable growth strategies and business models will lead this next economic revolution. We call these the Eagles. These are the winners of the future, the companies that have evolved their outlook to focus not merely on profits but also on people and planet.
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This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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