Welcome to another two weekly review of energy and environmental events and developments from both here in New Zealand and around the world. As always we hope you find our collection of stories to be of interest in what continues to be a rapidly evolving area.
We start this week with a thought provoking article on humanity’s impact on our planet. The author defines formulae about impacts on the Earth's changing environment; as it was, and as it is now. Humanity now has more impact on the environment than astronomical and geophysical forcings and internal dynamics that were previously the main influences. Did you know that humans have made enough concrete to cover the
Earth in a layer 2mm thick? The impact of this, and other human influences, needs to be minimised to zero as soon as possible for
Earth to recover.
There are many pathways to minimising the risks of our influence, including improvements in energy generation, agriculture, conserving water, and this week we have examples of what businesses, people and financial institutions are doing…there is some good stuff going on…
Firstly, business. Sustainability is a term we are certainly hearing a lot, but why do 98% of companies not achieve their sustainability goals? Any change is difficult, but achieving sustainability goals seems tougher still. Why? Many employees do not see sustainability as a business imperative, and with more than 60% of
respondents in a survey by Bain & Company: "Achieving
Breakthrough Results in Sustainability" citing public reputation as the key driver for sustainability change, buy in at this level is a must for success. This, along with 4 key recommendations discussed, will make the step to sustainability achievable.
To highlight the benefits of sustainability in business, we next look at Sustainable Procurement and how it increases revenue growth. 120 supply chain professionals across the globe found that almost all (97%) place a high priority on sustainable procurement. Being sustainable is a business driver, and a requirement
being made more and more by investors.
We next look at how a number of businesses are adapting in their quests to do business in a more sustainable way. Some big companies are moving from plastics used in packaging to more sustainable alternatives. This shift means a lessening risk of plastic material being introduced into the environment and of course less waste. Using ‘mushroom-based, compostable, prepared cushions’ instead of foam as packaging sounds pretty good to us. With some well know companies leading the way with their commitment to change (L’Oréal, Dow Chemicals & Coca-Cola to name a few) it’s got to have a positive outcome in the transition to recyclable materials.
An example of a business pushing the sustainability cause in an industry well known as lacking until now, Levi Strauss has big plans for the future. They are already doing so much, and by 2025 the company plans to manufacture all its 501 jeans from recycled cotton. The only trouble is, there is no process to do this as yet. We know if they don’t achieve this absolute goal, they will get close. But it’s not just about their product; they are very proactive in reviewing their business model and looking after staff. They are very much taking a sustainable whole business approach.
We next take a look at a number of sports teams. Although businesses in their own right, they probably have more supporters than staff so their approach towards sustainability may require something a bit different. Each of the teams mentioned brings something different to their game, but the outcomes are all very impressive. Whether it be ‘meat free days’ or high achievement in recycling at stadiums, ‘green’ energy use or procurement, all have proven to be winners on the day!
Big finance is also evolving in how they assess climate risks, stranded assets and lending opportunities in renewable generation and the green economy. Whilst most of this awakening has only been since 2015, it appears to now be quickly gaining momentum. For example the National Australia Bank plans to invest nearly $14 billion over seven years in energy efficiency, renewable energy and low-emissions transport. A recent report by Moody’s expects green bond issuances will increase to over $200 billion in 2017, up from $93.4 billion in 2016.
Banks are also increasingly using the Principles for Positive Impact Finance as the guidelines for assessing sustainable investments and lending. Much of this is being driven by aiming to achieve the Sustainable Development Goals (SDGs) – the global action plan to end poverty, combat climate change and protect the environment expected to cost $5 to $7 trillion every year through 2030.
And finance is best to re-evaluate their investments in electricity generation with renewable energy now more cost-effective than fossil fuels. Recent examination of the levelized cost of energy (LCOE) calculation assumptions regarding the cost of capital, capacity factors, useful life and carbon prices, has concluded they are outdated.
 A case in point is three recently opened (2015) Dutch coal plants, which have seen their values crash. The utilities behind them failed to foresee a rapid rise in renewable power generation, falling demand and calls for a coal phase-out to meet climate goals.
As an individual Snippets article this week, we lastly take a look at the necessity of individual car ownership. The average car is stationary 96% of the time, including being parked at home or at work, or sitting in traffic. Even Bill Ford of Ford motor company agrees that we cannot keep injecting new cars onto the road. We’re heading for global gridlock. There has been a rapid growth observed in ride sharing technologies, and more and more people are using public transport, which is fantastic, but car ownership is still on the rise. Perhaps the car ownership model is outdated. Maybe shared ownership or community ownership of cars is the way to go? Either way, if we continue on our current trend, the outlook is bleak.
Thanks for taking the time to read this issue and we look forward to catching up with you again. If you have any items of interest you would like to submit, then please feel free to forward them.