I want to share a story with you that emanates from what’s brewing in my cup on this cold, rainy October evening in London: a warm, comforting tea. Tea is the second most consumed drink in the world, after water. In India alone, the annual production of tea is approximately 857,000 tons, generating 190,000 tons of tea factory waste before the tea has even been packaged. I now, surreptitiously, place my cup gently down on its coaster with the knowledge that 90% of what is left behind is waste. With the world’s estimated daily consumption at a colossal 18 to 20 billion cups, the wider question begs. How do we tackle the challenge of post-consumption waste? Is there a way of capitalising on this resource?
Anthropogenic activities such as conventional farming, non-renewable energy production, mining, factory run-offs and the construction industry, adversely affects wildlife and negatively impacts human health. The speed of technological development coupled with humans’ insatiable demand for consumer goods, places a mounting pressure on our natural resources and the environment.
Take the example of metal pollutants; when heavy metal-contaminated soils and water bodies enter into our food production and human life support systems, they pose a serious human health risk.
While some metals such as cobalt, copper, iron, molybdenum, manganese and zinc, classified as essential micronutrients, are critical for plant growth. Other metals, commonly found in soil and water, like arsenic, cadmium, chromium, mercury, nickel, lead, selenium, uranium, vanadium and wolfram are contaminants, and non-essential for plants. These metals, even at low concentrations get absorbed into plants and cascade up through our food chain. Through a process known as biomagnification, toxins are amplified as they move up the trophic levels towards our mouths.
Adsorption of heavy metals by upcycling a material like waste tea
Existing physio-chemical methods of heavy metal extraction are often expensive and complicated, demanding high-tech solutions. Yet, the world community is in great need of low-tech, easily applicable and affordable solutions to mitigate the growing problems with pollution. With increasing research into alternative, cost-effective adsorption materials, we see a plethora of options available to us. Take peanut hulls, neem leaf powder, straw, peat, pomegranate peel, and now, finally, tea waste.
The impactful urban potential of waste management
The extraordinary and rather unexplored potential for extracting waste materials, leads us to the next part in the chain. How can we integrate waste management solutions in urban environments in an interactive way, closing the loop between production, consumption, and the waste we produce? A step further, how can we harness this methodology to create a new architectural style? One that does not shield the “ugly” backside of our societies, but instead engages our citizens through active experiences moving towards a more circular economy and healthier lifestyle?
Waste, energy & recreation
Having studied in Copenhagen, close to the industrial waterfront, I had a rather peculiar view from my bedroom window: a powerplant that creates clean energy from 440,000 tons of annual waste. It is the cleanest waste-to-energy power plant in the world, raising the bar for resource optimisation with an energy efficiency of 107%. The incineration process recycles material through a recovery of resources that would otherwise not feasibly be recycled. With the help of very efficient modern techniques, the segregation process from bottom ash reaches more than 90% of the potential for most ferrous and non-ferrous metals. The bottom ash, a by-product of the energy production, following strict procedures, is then used for road construction and similar construction purposes, replacing natural resources such as sand and gravel.
Sounds good? There is more to come. The mountain-shaped waste management plant has a tree-lined hiking trail and ski slope on the roof, as well the tallest artificial climbing wall in the world. At its peak, your welcomed by an après ski cafe with a 360 view of Copenhagen. This new model of architecture and waste management offers the city a whole new level of urban fabric that contributes positively to public health, wellbeing and people’s economy, through reduced energy bills. Following this model of success, the Chinese metropolis, Shenzhen are building the world’s biggest waste-to-energy plant set to open later this year.
Upcycling of waste materials in architectural design
A good way of avoiding contaminants entering the food chain is by creating less waste in the first place - failing that, we need to find purpose for otherwise wasted materials. The recent innovation, by the sustainable Danish architectural firm GXN designed and built a competitive “OSB” building board by upcycling tomato plant waste. Their visionary product not only demonstrates a circular economy, but also outperforms conventional materials on durability. Who knew that agricultural waste could replace the current single-use construction philosophy in architecture?
With COVID-19 delaying, pausing and even cancelling many big construction projects worldwide, the time to analyse, improve and rethink our industry’s model of operation has never been more pressing. While buildings are historically long-lived, our cities are perennial: citizens are counting on their survival to enable future generations to thrive. Our current ‘short-term win’ economic model manifests itself in new buildings prioritising profit. The way we build today is damaging the environment rather than healing it. Discouragingly, the construction industry is responsible for 50% of landfill waste and 40% of drinking water pollution worldwide. It is now common practice for big building projects to clear vegetation and excavate, destroying biodiversity and reducing, if not eliminating the potential of much needed CO2-storage in our trees and soil.
Previously, the role of an architect was a ‘Chief Builder’, having the sufficient expertise on design and construction to oversee a project from inception all the way to completion. With the innovation of design and technology, architectural projects have become increasingly complex. Presently an architect is an irresolute role that varies remarkably from country to country, blurring the lines between what our responsibilities are and what they should be. With fast growing challenges arising from man-made climate change, we will have to start looking at ways of reclaiming our lost responsibilities, exploring new alternative services, and promoting a higher level of collaboration within the build team. Consequently, we ask ourselves whether 2020 could be the year where we change the rudiments of architecture?
The cataclysmic pandemic has changed the world in profound ways. Businesses are re-inventing themselves, integrating new ambitious sustainability strategies. Countries are stepping up to the Net Zero 2030 and 2050 challenge. As architects, we are the first frontier of the build environment, we serve as gatekeepers and should hold our industry accountable for its emissions and detrimental impact on our natural world. We know the solutions exist and although we have only touched on a few of them here, their potential is unlimited. Today, we see beautiful examples of economically viable, sustainable buildings and green urban planning strategies, so I pose the question: what is holding us back? As a young architect, I’m excited by what the next 10 years hold and encourage an organised, sustainable industry approach.
Emilie Jaspers, Sustainability Advisor (Keystone Legacy)
The pandemic has revealed our fractured and vulnerable financial model that has long been centred around short-term “wins” at the cost of our society & environment. The economy is now set to contract sharply, by at least 5.2% in 2020 according to the World Bank, accelerating the need to create real change.
In front of us is undoubtedly our greatest innovation challenge to date. How do we halve global emissions to stay under 1.5c and create an equitable world for future generations, all within a decade (2030)? To achieve this crucial target set by climate scientists, our countries, industries and communities need to come together to transform towards ‘net-zero’ as the minimum.
With the ‘climate tech’ solutions out there and many more being conceptualised; we ask the question, how can each of us our play our role?
At Keystone Legacy, an international agroecology initiative, we recognise the importance of building back greener through sustainable, regenerative precision practices. However, what seems more apparent than ever is the absence of a coordinated approach between all actors. Governments, although fundamental in setting policies for climate action, have to this point proven to be behind the curve and self-serving.
The opportunity now lies in the business community and the public sphere. Here, purpose-driven partnerships can be forged that demonstrate to our politicians where our interests and priorities are. In particular, the onus is on us, the younger generation. We need to raise awareness around climate change and implement the world’s mission. In short, it’s an anthropogenic crisis; humans have caused it, we can reverse it. And it all starts in the mind.
Man-made climate change is a symptom of our superpower. Our ability to believe in shared, imagined realities – nations, media & corporations – has led us to the top of the food chain and given us unparalleled influence over our planet. Like all superpowers though, they can fall into the wrong hands and threaten our very existence. Today, we live in a world built on stories and beliefs of the past that are failing us.
Social media, long heralded for optimising biological connection across the world, is showing its true face. We, the people, are products sold to the highest bidder, advertisers, many with a nefarious agenda of populism and disinformation. Why do we have climate change deniers? It seems that as homo sapiens, we are ill-equipped to face this wall of carefully programmed Artificial Intelligence (AI) praying on our weakness, with high rates of addiction, alienation and extremism among its ‘users.’
Understanding this, presents each one of us with a heroic duty. How can we harness our shared superpower to save the planet, other species and ultimately, ourselves? More than ever before, we need to enter into a new, enlightened collective consciousness. One that rejects speciesism and recognises that we are all part of the same biosphere that is contingent on the health of all species and ecosystems to function.
Once we’ve reached this paradigm shift in our minds, the narratives that have long served fictitious entities which sever our ties with nature, can be replaced by belief systems that actually do serve the people. And the answers are in front of us. If we respect nature, we can better understand its principles and the functioning of its ecosystem. As David Attenborough expresses in his latest call to arms, ‘A Life on Our Planet’ documentary: “We need to rediscover how to be sustainable, to move from being apart from nature to being a part of nature once again.”
Tribal communities are our testament that we can co-exist with nature again. Yet, it is deeply concerning that today, we live in a time where a tree is more valuable dead than alive. Even more alarming is the latest PNAS report, which shows that only 4% of mammals are ‘wild’, with humans and our livestock accounting for 36% and 60% respectively. We have pushed wildlife to the brink of extinction, and humans are not far behind.
This pandemic has created a social, political & economic vacuum. We, as citizens and businesses have a real chance to reimagine our stories and realign our values. Social media can be reengineered to demonstrate truth. In doing so, we can broadcast a counter-narrative, one that is climate positive and compassionate with a long-term, sustainable impact.
Our time for collaboration and co-creation is ripe: we can all be conscious consumers and demand responsible value chains from our businesses. Likewise, businesses can deliver purpose and substitute shareholder, for stakeholder capitalism. We have already witnessed the psychological and material benefits from localising food systems and stewarding biodiversity during what the fortunate few call “The Great Pause.” These lessons now exist in our social network. With the right collective will, they can guide us towards permanent, positive change.
Edward Pycraft, Keystone Legacy
Agricultural lands cover more than 1/3 of Earth’s land surface and account for an estimated 20% of all CO2eq emissions from human activities. (FAO, 2017)
Today several social, environmental and economic constraints threaten the resource base that agriculture depends on. One of these, the marginalization of smallholder farmers’ rights, practices and knowledge hinder sustainable food production systems and widen vulnerability levels amongst local communities.
Research shows that regenerative agricultural systems have the potential to curb climate change through reducing emissions and capturing carbon. Here, soil organic carbon sequestration (enhanced sinks) are the most effective mechanism.
A shift towards organic farming techniques also enable food sustainability and provide a set of farmer friendly solutions for climate resilience.
As a programme officer at CREP, a Kenyan agricultural and environmental conservation NGO, we have spent the last 6 years empowering community farmer groups in North East Kano through our agroecological programme.
These farmer groups have implemented a series of organic production practices that optimizes nutrients, energy flows and minimizes supply chain risks during adverse and extreme weather events.
On a granular level, by increasing soil biological activity, we maintain long-term soil fertility and minimize the use of non-renewable resources, which leads to enhanced biological diversity and vital ecosystem improvements across their locality.
In addition, farmer groups experience significant economic gains through improvements in safe crop production systems, food security, family nutrition, health and education within their households.
Application of organic manures
With no external farm inputs, such as synthetic fertilizers and pesticides, we are able to control carbon dioxide and nitrous oxide emissions.
Farmers use organic manures through integrated livestock production which enhance waste management systems and minimize emissions of greenhouse gases through composting and fermentation of bio-fertilizers.
For the last few years, most small holder farmers within the project areas have been grappling with the fight against crop devastating worm (fall army worms) which have spread to many maize growing regions up to date.
This has forced most farmers to apply chemical pesticides where worms become more resistant and due to misinformation on its use, overdosing leads to burnt crops.
In response, our programme puts into practice the production of bio-fertilizers and bio-pesticides to tackle the challenges faced by farmers in a sustainable way.
In 2018 during the short rainy season, 40 litres of sulphur brew, which was later named “LIMSA-B” were prepared for trial. A total of 55 maize farmers whose farms were highly infested by the worms from 3 locations were reached during the trials. Within a period of a week, more and more farmers started to request for more bio-pesticides for their farms.
The reported feedback during the first trial included; reduced attack by worms, increased growth rate of crops and controlled crop leaves discolorations associated with crop mineral deficiencies.
The program took good note of these feedbacks and in 2019, during the long rainy season we prepared and mixed 60 litres of the same bio-pesticide and 100 litres of Super Magro (foliar feed) for over 80 farmers.
We soon witnessed small plots drastically increasing crop yields, improving soil quality, water efficiency and controlling pests which in turn helps to improve farms’ adaptive capacity especially with climate shifts.
The final product, aptly named “BIO-COMBINED” was by far the farmers best option and environment friendly.
Since our trials, this knowledge has reached over 200 farmers and students from colleges and universities attached to CREP.
Our next milestone is to get the national agricultural policy to support these climate smart, organic farming practices as an adaptation and mitigation strategy.
Only by stepping up this agenda of change to the national level, can we significantly contribute to achieving the SDGs in an integrated, comprehensive and holistic manner making the Kenya’s Big Four & Climate Action Agenda 2030 real and valid.
Geoffrey Omondi, Crep Programme (TreeKenya Parnters)
Photo: Hailey Tucker
Organics are produced and processed through a system that encourages biological natural cycles, allowing farm animals to exhibit natural behaviour, whilst excluding the use of synthetic pesticides, chemical fertilisers, antibiotics and genetically modified organisms.
Why do we support organic agriculture?
Well, it’s easy to manage and cheap. The fertiliser and pesticide products are chemical free using locally available, organic materials that do not interfere with the soil and environment.
We like to follow 4 simple, organic principles:
Organic agriculture is geared towards achieving health in plants, animals, human beings and the whole planet. Holistic approaches to health are best achieved when the individuals health is embedded in the ecosystem. In human health we think in-terms of social, mental, physical and ecological well being exhibited in immunity, resilience and regeneration.
It follows that our harvest should fit the cycles and ecological balances in nature. Ecological balance can be attained through the design of farming systems, establishment of habitats and maintenance of genetic and agriculture diversity.
Organic agriculture is based on living ecological systems and cycles. These systems are the living soil, farm ecosystem, and aquatic ecosystem. Inputs should be reduced by reuse, recycling and efficient management.
Animals should be provided with the conditions and opportunities of life that accord with their physiology, natural behaviour and wellbeing. Natural and environmental resources that are sued for production and consumption should be managed in such a way that is socially and ecologically just and should be held in trust for future generations.
Fairness is cultivated through equity, respect, justice and stewardship of shared world, both among people and in relations to other living things. The relationship cultivated should ensure fairness in all levels and to all parties: farmers, workers, processors, distributors, traders and consumers.
Now back to our beans. They were planted using animal manure, sprayed with plant extracts with traps for any insects which might interfere with the produce.
This way the beans are produced in a healthy manner optimising microorganisms in the soil with care to eliminate chemical residues.
Our farmer managed to produce 10 bags each 90kgs within a half acre to feed her family and sell the surplus locally to improve food security and fairness in the community.
Regina Muthama, Katoloni Missions (TreeKenya Parnters)
Tree planting in Kenya has been boosted by the efforts of the Government of Kenya through the Ministry of Environment and Forestry liaising with other non-governmental and private actors. What is clear, is that there is more value out there than just adding to the forest cover especially when organic farming practices are adopted. Firstly, going organic enhances food production and increases the number of beneficiaries, particularly in less developed parts of the world. This is shown by the increase in market value of organic farming products over the years and the fact that countries in Africa, Asia and South America lead in the number of organic producers.
When conventional agriculture focuses on maximising large scale mono cropping of mainly hybrid commodities, we see an over-reliance on the use of fertilizers and chemicals to control pests, both of which lead to more acidity in the soil and massive death of microbes. By contrast, organic farming takes a holistic approach to crop production giving attention to environmental conservation, soil fertility and water systems. These organic inputs not only rival their chemical counterparts but leave the soils richer and plants robust enough to withstand the shocks of climatic changes or pest infestation.
For example, the root structures of our organic maize variety are hardy and hold the soils better. You will note the shine on the organic variety and the frail look of the hybrid stalk. So, alongside the overwhelming environmental benefits, we see organic farming actually producing higher yielding, more valuable crops.
The one other major advantage of organic practices, use of local or indigenous seeds and saplings is that the farmer is empowered by having the choice and source of inputs as opposed to the system which dis-empowers and leaves them at the mercy of the merchants of hybrid & exotic seeds, fertilizers, herbicides and pesticides.
In Kenya, many organizations are already practicing organic farming. Leaders in the pack are the 50 plus members of Schools and Colleges Permaculture programme (SCOPE) and Participatory Ecological Land Use Management (PELUM) Association. The Resources Oriented Development Initiatives (RODI), a founder member of both associations has gone further to host two international workshops on biofertilizers and other organic farming inputs.
As the partners of TreeKenya embark on tree planting in the country, there is every reason to go organic for the environment and future of our planet.
Gachora N Waweru, RODI Kenya (TreeKenya Partners)
We are very pleased to announce that our organic cooperative programme, TreeKenya is now registered with Plan Vivo Foundation.
Over the next few months we are raising capital to regenerate smallholder farms and schools across Kenya with a strong rate of return for our impact investors through carbon credits and organic harvest sales.
More than cooperative
TreeKenya certifies small-scale farms and schools organic connecting them to local and regional markets for selling their produce at the best price.
As a gender equitable, community-based programme we are able to give equality of opportunity to women, men and children. Our proposed target groups are rural communities that face many problems including; gender inequity, inadequate skills and knowledge in agroecology, declining soil fertility, decline in crop productivity, desertification, high incidence of pests and diseases, locust plagues, low diversification of agricultural enterprises at the farm level and low access to affordable and friendly credit.
Through going organic, we are able to increase income and food security for participants, while reducing environmental degradation and regenerating their land. Our activities include agroforestry, afforestation and agroecology to achieve high yielding, organic crops and indigenous trees ready to harvest for superfood, cosmetic and medicinal production worldwide.
That way the programme will generate impactful, high returns for our investors through long-term, verifiable carbon credits and farmer off-take agreements.
Plan Vivo as a certification body
Plan Vivo administers the Plan Vivo Standard – a proven framework for community land use and forestry projects.
By certifying projects worldwide, they demonstrate sustainability, ensure that people’s livelihoods truly benefit and vital ecosystems are restored.
What's more the Standard is internationally recognised for its focus on ethical and fairly-traded climate services, meaning a greater share of climate finance (60%+) reaches those who most need it.
Keystone is honoured to work with the Foundation and see TreeKenya create measurable impact!
It is without doubt that the pandemic has impacted our food supply chain - An industry once evolved to feed a globalised world has now been scaled back to the local level in some cases…
As part of China’s economic transformation in the 1990s, they increased their food production systems to industrial scale. One notable side effect of this meant that small-holder farmers were undercut and pushed entirely out of the livestock industry. In a bid to search for new ways to earn a living, many turned to farming ‘wild’ species that had previously only been eaten for subsistence.
At the time, this was seen as a profitable sector and ‘wild food’ was formalised, increasingly becoming branded as a luxury food item. However, the smallholder farmers were not only pushed out economically, but geographically as well. This is evident through the exponential growth of industrial farming which acquired huge swathes of land, thereby encouraging small-scale farmers to cultivate closer to the forest edge and in forbidden territories. As our planet’s population continues to increase, so too does the occurrence of humans encroaching into exotic places and valuable ecosystems, and the risk of exacerbating infectious diseases becomes ever more apparent.
Similarly, the Chinese ‘wet markets’ alone present a further risk of virus transmission. When these exotic animals from different environments are kept in close proximity to one another, it provides a breeding ground for viruses to jump from one species to another, giving them reason to amplify, mutate, and develop into something much worse. In recent decades human infections of animal origin have been widely documented, such as the Asian Flu in 1956, SARS in 2002, and H7N9 which killed four in ten people. If humans continue to interfere on these biodiversity hotspots, nature will find its way of fighting back.
Most of the attention so far has been focused on the deplorable conditions of ‘wet markets’ in China. It is without doubt that these wet markets will need to be better regulated, but it is also important to look at how our food is produced on a global scale.
While scientists do not have a definite answer to how exactly COVID-19 originated, it is believed that other pandemic virus threats such as swine flu and bird flu almost certainly evolved at pig and chicken factory farms. Links have already been established between increased pandemic risks and intensive animal agriculture, hence there should be a stronger focus on factory farm conditions, and possibly rethink how we can feed our populations in a safe way. Maybe we should all just turn Vegan?
The pandemic has also highlighted the poor conditions in the meat processing industry. In recent weeks Germany has seen several coronavirus outbreaks among meat factory employees and has even put two districts in western Germany in quarantine after more than 1,550 workers at the Tönnies slaughterhouse were infected with the disease. There is undoubtedly a need for better regulations here too.
As we have spent more time in lockdown, people have become more attuned with the nature that surrounds them. Many people have even tried growing their own food, which is certainly a positive development for the future. In line with this, urban farming and vertical farming will become more crucial. Localising food production will lead to significant cuts in fossil fuel consumption, help consumers reduce their carbon footprint, and help provide them with the opportunity to purchase food that has been grown in their community.
With our planet's population expected to reach 10 billion by 2050, there's no escaping the fact that food production around the world needs to increase while also ensuring citizens’ health is kept in check. It is important now that we use our voices and vote for those who will hold agribusiness to higher standards on social and ecological grounds, take an active stance against the illegal wildlife trade and encourage the localisation of food production so that future generations can be sustained.
Even though the Covid-19 pandemic swept across the globe and suffocated the global economy, deforestation has continued largely unchecked. Every day, vast swaths of tropical forests are burnt to a crisp for the production of agricultural commodities such as soybeans, palm oil, and beef that end up on our supermarket shelves. Not only does deforestation release huge amounts of carbon already stored in trees and soils, but it also eliminates the future potential of the forest to sequester additional carbon as the land is cleared and burned. Protecting and restoring these forests and natural landscapes are equally as important as eliminating our fossil fuel use to help mitigate the effects of climate change.
At Keystone we’re integrating agroforestry practices on the ground. Agroforestry is a land management system that enables both trees and crops to grow together. First we begin by acknowledging the individual climatic and soil conditions, as it helps us determine which native trees and crops are able to survive the sparse and degraded landscapes. By carefully choosing native species, we are able to regenerate the land and reinvigorate it to its true state.
This unique system is designed to improve the quality and productivity of society and the environment, all the while increasing food security through greater crop yields - turning our negative ecological impact into a positive. It also helps relieve the pressure of overgrazed land, reduces erosion, increases biodiversity and is capable of improving water infiltration which is vital for increasing soil fertility for agriculture and ameliorating the microclimate.
The programme will bring about huge social benefits, such as increasing the farmers’ self-reliance, by encouraging them to supplement and diversify their diet with the plethora of crops that will be grown. Furthermore, it will strengthen the local communities and invigorate the local economy by providing an opportunity for many to sell their surplus crops.
Agroforestry is part of a growing movement for sustainable and organic agricultural practices. It has taken on a new urgency with the recent coronavirus pandemic as scientists warn that the climate crisis and escalated land development will heighten the chances of another deadly virus jumping from animals to humans. The fears of another global pandemic on the horizon could be the very reason that more sustainable agricultural practices are introduced to help reinvigorate our planet.
As global warming reaches historical new highs, both corporates and individuals are increasingly looking towards concrete climate change solutions to reverse, or at least mitigate the severe damage that has already occurred. Tree planting is the one of the worlds biggest and cheapest ways of absorbing CO2 from the atmosphere., which will in turn help offset emissions from sectors like aviation where alternatives are not yet available.
The roots of ESG emerge from Socially Responsible Investing (SRI), where money is not invested in companies that engage in environmentally and socially irresponsible practices. In fact the first instance of SRI dates back 200 years ago where the Methodist movement protested against investing in companies that were involved with making weapons and tobacco. The main difference between SRI and ESG lies in the fact that investing based on ESG criteria is considered to make financial sense as well, and is not solely tied to a moralistic stance against unethical businesses.
As such, ESG investing began in January 2004 when former UN Secretary General Kofi Annan wrote to over 50 CEOs of major financial institutions, inviting them to participate in a joint initiative under the auspices of the UN Global Compact and with the support of the International Finance Corporation (IFC) and the Swiss Government. The goal of the initiative was to find ways to integrate ESG into capital markets.
A year later this initiative produced a report titled ‘Who cares Wins’. The report made the case that embedding environmental, social and governance factors in capital markets makes good business sense and leads to more sustainable markets and better outcomes for societies. And it does. At the same time, a similar report called the ‘Freshfield Report’ was produced by UNEP, which highlighted how ESG issues are particularly relevant for financial valuation. Together, these two reports formed the backbone for the launch of the Principles of Responsible Investment (PRI) at the New York Stock Exchange in 2006 and the launch of the Sustainable Stock Exchange Initiative (SSEI) a year later.
Today, the PRI now has 1600 members representing assets worth over $70 trillion. As the effects of the climate crisis are felt more widely and accepted, it is without doubt that ESG compliance is going to become increasingly important. Already we have seen ESG investments accelerating, most evident between 2014-2016 where ESG commitment had increase by 41% - amounting to $8.4 trillion worth of assets according to the GSIA.
Interestingly, investments in green stocks and companies during the coronavirus have faired much better as a result of their ESG parameters, and are as such reaping better financial results. All in all it emphasises how they are proving to be more resilient in the downturn, and yet still retaining all the impact they are having.
The greatest barrier that is currently preventing ESG compliance to be the norm is the lack of data available to stakeholders. The ESG ecosystem involves investors, governments, international regulators and data providers, where the data providers are the backbone of this ecosystem and the ones to fuel all the other members’ decisions. What we need now is the government to prioritise and work towards providing high resolution data such as AI and satellite imagery, that will provide stakeholders with the necessary information so that they can invest with confidence. Prioritising these efforts is imperative if we are to mitigate climate-change disasters that are now happening far too often.
Green Finance refers to new financial instruments whose proceeds are used for sustainable development projects, initiatives, environmental products and policies under the single goal of promoting a green economic transformation toward low-carbon, sustainable and inclusive pathways. It is constituted of new financial instruments such as green banks, green funds, green bonds and carbon market instruments, and involves engaging traditional capital markets in creating and distributing a range of financial products and services that deliver both investable returns and environmentally positive outcomes.
At the core of today’s globalised economy are financial markets through which banks and investors allocate capital to different sectors. The most important thing to note is that capital allocated today will shape ecosystems, and the production and consumption patterns of the future. Having said this, the public sector funds and development assistance can supply only a small portion of green investments. Therefore, the private sector needs to fill financing gaps for green investments over the long term.
How can this be mobilised at scale?
According to the ADB report Catalyzing Green Finance , the whole financial system needs to be reoriented to support a green economy. To scale up, governments need to team up with a range of actors to increase capital flows and develop innovative financial approaches across different asset classes. In doing so, this can help catalyse the much larger flows of private finance that is necessary to unlock green business innovation on a wider scale.
To facilitate this transition, an enabling framework that promotes green finance will be required to help educate and change people’s mindsets and behaviours. In due course, this could lead to subsidies for fossil fuels being phased out, while subsidies for green products (such as electric vehicles) could be phased in. Disclosure should also be made mandatory, ensuring that companies and banks are made accountable for the environmental damage of the companies that they lend to.
If countries are to achieve sustainable development in line with the United Nation’s Sustainable Development Goals, then investments must be made in green areas. That’s why there is a specific need to promote green finance on a large and economically viable scale, as it helps ensure that green investments are prioritised over business-as-usual investments that perpetuate unsustainable growth patterns. This focus should be on the greening of an existing infrastructure, or the spending on and mobilisation of additional investments in key sectors, such as clean energy, sustainable transport, natural resources management, ecosystem services, biodiversity, sustainable tourism, and pollution prevention and control.