During this Covid-19 pandemic, many people are experiencing uncertainties that the most vulnerable communities in our society live with on a day-to-day basis. For example, worries about job security, missing mortgage or rent payments, accessing food, child care, healthcare, education, and even a general sense of feeling trapped in a situation that is well beyond their control.
However, this pandemic has certainly shown people how broken and inequitable our current systems really are, as well as the world’s approach (or lack of) towards tackling the climate crisis. This is not to say that the pandemic created these inequities that we are currently facing. Rather, it has revealed the crises that were already there, and how they are now fairing much worse. If we don’t address these issues as an integral part to our response to the outbreak, we will not only be less resilient to future pandemics and emergencies, but we will prevent ourselves from achieving any kind of ‘new normal’.
Despite the clear warnings from scientists, and the evidence pouring in every day that climate impacts are already being felt on a worldwide scale — fossil fuel companies are still spending billions to lock in more climate pollution. In 2018, roughly $1.2 trillion in investment went to fossil fuels. What’s more shocking is the fossil fuel industry has actually known about the climate crisis for decades. Investigations uncovered that the industry was funding research into carbon pollution and was aware of the dangers of rising global temperatures all the way back in the 1960s. But instead of acting responsibly, they decided to polarise the issue, confuse the public, and essentially delay action.
The IPCC has warned that global temperature rises should be limited to 1.5 degrees above pre-industrial levels in order to keep the worst, most devastating effects of climate change from battering human societies. Yet in May 2020, the concentration of carbon dioxide in the atmosphere crept up to about 418 parts per million (ppm). This was the highest ever recorded in human history. Recently, UNEP have revealed that to hit that goal, overall human-cause GHG emissions need to start dropping by 7.6% each year from now until 2030 .
The UK has an advanced climate change legislation, whose proposed budgets require the country to reduce its greenhouse gas emissions from 695MtCO2e in 2006 to 159MtCO2e by 2050. This is equivalent to an annual average reduction of 3.3%. All of this is achievable, but only if the necessary steps are taken to facilitate a smooth transition to a green economy.
Many people are fearful of life returning ‘back to normal’. That’s because as lockdowns were enforced across the world, people were temporarily locked up and excluded from these natural spaces. During this time, nature has become more visible and our collective impact on the natural world has become more noticeable through its absence. People are once again looking to nature, thinking how might they best preserve this precious planet that we live on.
Despite this eco-anxiety, COVID-19 has given us a glimpse into that future, as we have witnessed a massive decrease in energy demand during global lockdown and a significant increase in the up-take of renewable energy. We have seen renewables delivering almost half (47%) of our electricity generation across Europe - an increase of 9% compared to 2019, and even a drop in coal generation by 32% from 15th March to 17th April 2020. Change is on the horizon.
Climate change is a systemic issue and will demand that businesses take a long-term view and form strategic collaborations on a global scale, rather than focusing solely on the short-term and profitability. This is a significant worry as we build back from the coronavirus crisis, as people feel like they have to choose one or the other; profit or planet. But this is not the case. Instead of being viewed as a cost, the shift to sustainability and circularity should be seen as an opportunity to make a positive impact.
Change is possible. This is evidenced through Orsted, who was once Denmark’s largest coal, oil and gas giant. In 2017 the company decided to phase-out the use of coal for power generation and underwent a significant business model shift to focus entirely on renewable energy. Since then, investors’ share prices have tripled. A decade ago they were one of the most fossil fuel intensive energy companies in Europe. Today they’re ranked as the most sustainable company in the world (based on the Corporate Knights 2020 Global 100 index of most sustainable corporations). They truly epitomise how systemic change can occur through collective action.
From this point in time, we must work with decision makers to move from a short-term and quick-fix mentality to longer-term thinking. This is something we should have and could have done years ago, as the need for these structural changes has been growing for decades. With increased public awareness and the need to build back better, the support for this change is something very new and very exciting.
There has been lots of talk recently on whether the coronavirus crisis will spur a green recovery. Governments around the world are questioning the ability to ‘build back better’, but will they succeed in this? In fact, the determination to use this lockdown period as an opportunity for environmental change stretches far beyond this choice that governments are facing.
Since the Rockefeller Foundation first coined the term in 2008, Impact investing has gained significant traction. One of the reasons for this, is because it is a win-win form of investment. One does not have to give up returns to make an incredible impact.
Impact investing really started taking off after the financial crisis in 2008 and 2009. In many ways it takes a crisis for people to change their way of thinking and begin analysing experiences in greater detail. Many people use crises as a period of deep reflection; to reflect not only on their individual experiences, but also others and the world around them. For many, the longer this goes on, the more people’s attitudes and outlooks will change.
Impact investments have for a long time been thought of as producing both financial returns whilst making a positive impact. In many cases, people tend to think that there is some charitable and philanthropic element to impact investing. However, over more recent years there is a growing acceptance that making money and doing good can sit side-by-side. In fact, it’s been doubling in popularity every year. This is evidenced by a recent study with KPMG that showed how impact investments globally assembled $268 billion in 2017 and are poised to cross $468 billion by 2020.
Similarly, a recent report by Imperial College London and the International Energy Agency (IEW) has found that over five years in the UK alone, investments in green energy generated returns of 75.4% compared to just 8.8% for fossil fuels. It also highlighted how green stocks have performed much better during the global pandemic compared to fossil fuels, thereby accentuating the volatility of the oil, coal and gas markets. Black Rock reported that 94% of a widely-analysed global sustainable indices outperformed their parent benchmarks in the first quarter of 2020.
Impact investments are proving to be more resilient in the downturn and yet you still retain all the impact it is having. These are after all the companies of the future; companies’ that are specifically solving environmental problems, using technology to scale while ensuring that we have a planet that sustains us and future generations.
As we have become more in touch with nature during the lockdown period, it is without doubt that more and more people have become aware of the types of change required, and the extent to which we must address them if we are to live on this planet. This begs us to question whether the coronavirus will be the catalyst towards more socially responsible investing? Will we see a shift for the entire industry?
Well we have already begun to see systemic shifts. According to The Global Family Office Report 2019, the vast majority of family office’s around the world have diversified impact portfolios by investing most often in education (45%), agriculture and food (45%) and energy and resource efficiency (43%). Over the coming decades more than $30 trillion in assets will be transferred to millennials and generation X - the largest and wealthiest generation the world has ever seen.
With this unprecedented amount of wealth transferring from one generation to the next, families of wealth can have a tremendous impact in shaping the recovery by investing in a way that creates more economic opportunity for vulnerable people, but also ensures that sustainability and inclusion are at the forefront for a green recovery.
The world cannot keep on growing as it has been. While global imbalances like uneven growth, wealth inequality, and environmental degradation have generally raised living standards, unsustainable growth now puts future living standards at risk, and endangers the lives of generations to come.
According to the United Nations, achieving the SDGs will take between $5 to $7 trillion, with developing countries facing an investment gap of about $2.5 trillion. Bridging this gap is impossible for developing countries to tackle alone, and so the need for capital is huge.
So how can we make the world a better place by 2030?
Traditionally government and institutional investors help to fund this gap. However, with recent economic growth there is also huge potential from private capital. In the next 20 years, 460 billionaires will hand down USD 2.1trn to their heirs - that’s the size of India’s entire GDP. This begs us to question why private investors haven’t become more involved? Largely this is due to a lack of transparency, data availability and incentivisation.
What is impact investing?
Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on investors' strategic goals. It is without doubt that this approach is considerably better than unreliable aid packages that have become the norm in the developed-developing world relationship.
Small enterprises are often too big for micro-finance and informal sources of finance, but too small or risky for commercial banks and private equity investors. However, impact investors can address this challenge as they have a critical role to play in the expansion stage before the enterprise can take on commercial finance. Impact investing certainly challenges the long-held views that social and environmental issues should be addressed only by philanthropic donations, and that market investments should focus exclusively on achieving financial returns.
The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, micro-finance, and affordable and accessible basic services including housing, healthcare, and education. Interestingly, in 2014 Africa received 15% of impact investment Assets Under Management (AUM), with sub-Saharan Africa constituting the second highest regional allocation globally. This prominent position in impact investment is anticipated to strengthen, with Sub-Saharan Africa identified as the geographic area that most investors intend to increase their allocations in.
The Sustainable Development Goals (SDGs) and increasing global emissions present a critical opportunity to promote sustainable growth for all. Now more than ever, private capital can and must be invested to achieve them, as sustainable investments represent an effective tool which can contribute to closing this investment gap and facilitate the transition to a more sustainable and just society.
The COVID-19 pandemic is a stark reminder of our dysfunctional relationship with nature. This realisation first emerged after the subsequent lockdown of Hubei Province, as satellite images from the NASA space station showed the dramatic reduction of pollution following just a months lockdown. The drop in concentrations, coinciding with the nationwide quarantine is in significant contrast to emissions produced during China’s ‘business as usual’. In China, air pollution causes an estimated 1.1 million deaths per year and costs the Chinese economy $38 billion, whilst worldwide air pollution kills an estimated 7 million people.
The chief Environmental Economist at the United Nations Environment Programme (UNEP) explains how it is pandemics like Covid-19 that reveal the fundamental trade-off we constantly face. What it really shows is the trade-off between a consumption-driven society that continues to interfere with nature to satisfy its own needs. Humans have unlimited needs, but the planet has limited capacity to satisfy them.
As lockdowns are enforced across the world, humans are temporarily excluded from public and open spaces. During this time, nature has become more visible and our collective impact on the natural world is more noticeable by its absence.
According to the World Economic Forum, half of the world’s GDP is highly or moderately dependent on nature, so the restoration of these dilapidating landscapes could actually provide jobs and contribute to the general economy. It has been stated that for every dollar spent on nature restoration, at least $9 of economic benefits can be expected.
Climate Change is a pertinent issue, and in light of the recent coronavirus crisis, it is important that at this stage we consider a better mechanism for boosting jobs and growth whilst significantly reducing carbon emissions. An increase in conservation and restoration in the context of integrated land management is required.
Natural Capital, ecosystem services and other similar approaches have a tremendous potential to help society realise the value that nature provides for humans. At Keystone, we envision that the most significant change can be achieved through land regeneration. By reducing the pressures on natural resources and the local environment, we are also able to improve food security, diversify and increase incomes for rural farmers, and build the capacity for effective institutions that contribute to gender equity. Replenishing their Natural Capital will not only aid their transition to a green economy, but will deliver vital ecosystem services that benefit society and conserve the natural heritage that underpins their entire economy.
COVID-19 is exposing and exacerbating gender inequalities around the world. For many, the root cause of violence against women and girls is gender inequality - the unequal power relations between women and men, and the systems and social norms that perpetuate them. With this in mind, the recent quarantine measures imposed as a response to the pandemic are putting girls and women at heightened risk of violence in the home, and cutting them off from essential protection services and social networks.
Over the past three weeks, it has been reported that there has been a considerable increase in calls to domestic violence hotlines. Whilst we are lucky enough to have various hotline services available, many women who find themselves at home with an abuser will find it much more difficult to make a call.
Similarly, in Kenya, the current restrictions imposed make it much harder to report abuse and seek help. Schools are generally safe spaces for girls as they provide a channel through which violations can be reported and subsequent action taken. According to Kenyan government data, 45% of women and girls aged 15 to 49 have experienced physical violence, and 14% have experience sexual violence, emphasising how domestic abuse is a daily reality for women and girls across Kenya.
This pandemic is wreaking havoc around the world, not only because it is a global health crisis, but because it has shut down the key places for safeguarding girls and women from sexual and labor exploitation, human trafficking, female genital mutilation, early pregnancy, and forced marriage. These unequal power relations are deeply embedded in society, and are the driving force of violence, which can so easily be exacerbated when they cannot escape their reality. As such, the impact of COVID-19 will have far-reaching and devastating consequences for households across the continent, particularly where there is minimal social welfare provision available.
Unpaid care refers to all non-market, unpaid activities that are carried out in households, such as caring for children or the elderly, and other activities such as cooking, cleaning, or fetching water. Although many advances have been made in gender equality, in many parts of the world, this is still considered a women’s or girl’s role.
Unpaid work and domestic work contribute $10 trillion of output per year – roughly equivalent to 13% of global GDP (World Bank, 2012) – yet it remains largely invisible, unrecognised and absent from public policies. As this societal burden is placed on women and girls, it leaves them with little to no time to pursue paid and civic empowerment, that would otherwise contribute to personal and economic development.
A study by Oxfam on Gendered Patterns of Unpaid Care and Domestic Work in the Urban Informal Settlements of Nairobi, Kenya, 2019 revealed that women in Kenya have by far the greatest responsibility for unpaid care and domestic work, as they spend on average, 5 hours a day on primary care compared to about 1 hour a day reported by men (Oxfam, 2019).
This resonates across the African continent, as women’s time constrains are perceived to be highest in rural areas because of the arduous tasks of collecting water, fuel, and preparing food. Collectively, women and girls in sub-Saharan Africa are responsible for collecting 71% of all household water, spending 16 million hours every day collecting water, compared to 6 million hours for men and 4 million hours for children (UN Women, 2015; Oxfam, 2019).
Kenya and other countries around the world are recognising the importance of gender equality in achieving sustainable development. But what this report really reveals, is that women’s unpaid care responsibilities are a key constraint to women’s participation in education, self-care, leadership, and economic opportunities. The report emphasises that care work should be recognised at all levels and reduced, to allow women and girls to spend more time on leisure and partake in value adding activities.
That’s where Keystone come in. In Kenya, our community-based programmes are set on achieving equality of opportunity. We understand that for our activities to be successful, we must sensitise genders working together, by encouraging the distribution and sharing of economic resources and even household chores. Change stems from a personal, then household level, and by recognising the social norms from the outset, we are able to adapt the interventions to present women with equal prospects. This matters, because as a sustainable developer, we also realise that change is a process, and takes time. We are whole heartedly committed to the sustainable development goals (SDGs) and will use these as our guideline to achieve our objectives.
The financial system that doesn’t profit by undermining and destabilising human wellbeing, but actually serves society, the economy, and our common interests.
Source: Kate Raworth and Christian Guthier/The Lancet Planetary Health.
Our planet is under significant pressure. We are currently living in the Anthropocene, and while this process began during the industrial revolution in the 1700s, it has accelerated rapidly in the past 50 years. During this time, the global consumption of food, fresh water, and fossil fuels has more than tripled (Foley 2010).
There are vast inequalities in the world today, as the richest people have used and continue to use the vast majority of the world’s resources: for example, 50% of carbon emissions are generated by just 11% of people (Raworth, 2012). While many people have experienced a higher standard of living as a result of globalisation and economic transformation, millions remain in poverty, with nearly 870 million people facing hunger every day (FAO et al. 2012).
Kenya is one example, and who faces the ‘triple ‘challenge’ of poverty, inequality, and unemployment. Climate change also poses a significant threat and is hitting the poorest people first and worst. Rising temperatures, flooding, drought, changing rainfall seasons, and stronger winds are negatively affecting the countries’ biodiversity, food security, water security, and human health.
So how can the doughnut model help transform the developing world?
The circular flow diagram that depicts mainstream economics ignores the various social and ecological systems that underpin the economy. For example, the unpaid work that carers (mostly women) undertake is deemed irrelevant, despite the economy not functioning without them. As such, this representation of economic activity is far from that of reality, and highlights how a more holistic approach is required to transform the places we live in today.
In her economic model, Raworth takes the Earth’s natural systems and society into account. It shows us how the economy depends on the flow of raw materials and energy, and reminds us that we are more than just workers, consumers, and owners of capital. She exemplifies a world where social and ecological perspectives could work to reduce inequalities in wealth and income, whilst benefitting the planet, and where wealth derived from natural assets could be widely shared and not remain in the hands of the capitalist elite. Furthermore, public investment and taxation could be designed in such a way, that it would actually conserve and regenerate natural resources rather than deplete them.
So how could this be used in Kenya?
The doughnut model is the transformative tool that is required to not only lift us out of the mess Covid-19 has created, but to significantly transform today’s divisive economies. Large advances have been made in solar energy, and thus there is huge potential for Kenya to develop a ‘green economy’, one which would create new jobs, provide access to electricity, and reduce carbon emissions. By keeping within the realms of the doughnut, Kenya could make significant progress towards achieving a socially just and environmentally sustainable society, all the while allowing Kenyan citizens to thrive individually and collectively.
The UK’s panic buying and stockpiling in recent weeks has highlighted the fragility of our just-in-time food system. It has caused concern over potential food inflation, and how ‘food nationalism’ could potentially disrupt exports of staple grains such as rice, beans, and wheat from Asian and African continents (as host nations hold on to their supplies for their own people).
It is without doubt that the impacts of the virus will be felt widely and unevenly across the world. For example, many low and middle-income countries such as Kenya, Nigeria, and Angola, are now reporting cases of the virus and subsequently imposing rigorous lock down regulations in response. This allows us to question whether the supply chains in developing countries will be affected, and if so, to what extent.
The biggest issue is that African countries such as Somalia, Ethiopia, and Kenya are already fragile with food security. It has been reported that the World Food Programme was already feeding millions in Africa due to a myriad of disasters: floods, droughts, armed conflict, government failures, and most recently, a plague of locusts that have been traversing the continent. This coupled with the fact that lockdowns in at least 33 of Africa’s 54 countries have blocked farmers from getting food to markets, and threatened deliveries of food aid to those in rural areas.
The informal sector is the backbone of the economy, and the many informal markets are where millions of people buy their food every day. These have now been forced to shut, along with the closure of schools, which has meant that 65 million children on the continent are missing out on meals. This poses a significant threat to their health, as they are faced with the prospect of malnutrition and starvation - as long as lockdowns remain in tack.
The confluence of the locust invasion and coronavirus has caused food prices to rise significantly as demand for food outstrips supply. For example, the price for a kilogram of rice in Kenya now costs more than $1.25 compared to $0.87 before the locust crisis, and because of Covid-19 the price of a pack of potatoes in Zimbabwe is now $40 compared to $14 just a couple days ago. From the outset, this may not seem like much, but for those with no income, no food, and families to feed, this is a significant issue.
Ultimately, the organisation of food supply chains is strongly affected by levels of economic development, and factors such as urbanisation, and globalisation. Undoubtedly the coronavirus will have disproportionate impact in poorer countries that lack the basic infrastructure, compared to those in the western hemisphere. The immediate concern for the entire African continent is not the virus itself. Rather, it is the capacity to survive during this lockdown period, as food and water supplies run short. The question now is whether people will die from the virus, or from hunger itself.
According to the UN Environment Program (UNEP) the global rate of desertification is speeding up. It remains a significant issue, particularly in sensitive sub-Saharan countries where over 80% of the economy is based on subsistence farming. Africa is the worst affected continent; with two-thirds of its desert and agricultural drylands seriously or moderately degraded. This requires a call for action.
When land becomes desert, its ability to support the local people and their livelihoods declines dramatically. Food can’t be grown, water can’t be collected, and habitats shift. In Kenya, the soils are shallow, highly variable and aren’t particularly fertile. This combined with the continuous cultivation, overgrazing, and lack of soil and water conservation structures are aggravating this process.
The persistent degradation of dry land ecosystems is having a far-reaching impact on human health, food security and economic activity. Most notably, the 2005-2006 drought caused the pastoralists' herds of cattle, goats and sheep to fall 30% in just one year, leaving 80% of all Kenyan pastoralists dependent on international food aid. As droughts occur more frequently and intensely, this continuous burden on the grazing landscape makes herding cattle extremely difficult, thereby impeding economic independence and destroying the local environment. As a result, most households are extremely poor and lag behind in all spheres of social and economic development.
On the ground we are helping the local indigenous communities by developing community grazing plans, structuring rainwater catchments, and encouraging sustainable seed planting and harvesting techniques. This not only ensures food security, but also helps improve soil conservation. These best practices are developed in a participatory and inclusive way, enabling the local community members to become actively involved and committed, ensuring they own the process which ultimately leads to a substantial impact. They can also be scaled up and implemented in local communities elsewhere.
The desert locust is one of the most devastating migratory pests in the world. It is highly mobile and feeds on large quantities of any kind of green vegetation, such as crops, pasture, and fodder. A typical swarm can be made up of 150 million locusts per square kilometer, usually carried by the wind up to 150km in one day. Even a very small, one-square-kilometer locust swarm can eat the same amount of food in one day as about 35,000 people. This poses a significant threat to subsistence farmers as the locusts destroy their very livelihood, and potentially endangers the food security of almost 25 million people.
A swarm covering an area the size of Luxembourg has been spotted in 10 African and Middle Eastern countries in the last few months, and more recently in Kenya. Experts fear that global warming is the root cause, and an increase in tropical storms is creating favourable conditions for them to breed in.\
So where did it start, and how do warming global temperatures facilitate longer breeding conditions?
As greenhouse gases trap more energy from the sun the oceans absorb more heat, resulting in an increase in surface sea temperatures. Changes in ocean temperatures and currents brought about by climate change lead to alterations in climate pattern around the world. Tropical cyclones are one example, and form when the water warms above 27°C, causing the moist air above the oceans to rise. In this case, a pair of cyclones came in from the Indian Oceans and targeted the Arabian peninsula - the vast desert region near the border of Saudi Arabia, Yemen, and Oman, which brought copious amounts of wind and rain.
When this rain falls in semi-arid and desert-like regions, the sandy soils are unable to cope with the amount of rainfall and inevitably flood. As such, once the floods recede, much of the soil retains this moisture, and according to the United Nations’ Food and Agriculture Organisation (UNFAO) provides perfect conditions for female desert locusts to lay their eggs for months at a time.
The desert locust are a difficult pest to control as they often cover very large and remote areas. But also, many countries affected lack basic infrastructure with limited resources for locust monitoring and control, and those inundated with political rife struggle to develop the necessary implementation activities. Without preventive systems, these locust swarms could happen more frequently, last longer, and spread further beyond imagination. The UN has warned that the locust swarms could increase 500 times by June, posing a major threat to the entire region.
The short food supply also presents another problem. As demand outstrips supply, the price for a kilogram of rice now costs more than £1 compared to 70p before the locust crisis. From the outset, this may not seem a lot, but for those with little money, no crops, and families to feed, this is a significant rise.
The locusts are causing significant disruption to the region’s food supply and raising prices in areas most heavily affected.
The biggest issue is that African countries such as Somalia, Ethiopia, and Kenya are already fragile with food security. If they don’t manage to get this locust invasion under control, and reduce the significant strain on the current food supply, then they could potentially face a severe famine like Ethiopia has continually experienced over the twentieth century.