By Aiste Brackley, Senior Manager and Think Tank Lead, SustainAbility, ERM Group company
In our outlook for 2019, we explore the implications for business of the ongoing political instability, increasing climate impacts, global trade wars, accelerating loss of biodiversity and other key trends.
While the scale and complexity of the sustainability challenges we face is daunting, there is also reason for optimism. We are witnessing unprecedented leadership and innovation by cities, regions and businesses, rising civic activism and advocacy by Generation Z, and rapidly growing awareness about issues such as plastic.
Below we summarize the key global trends that we distilled through our research. For in-depth analysis and overview of the key issues to watch for companies in energy & utilities, technology, pharma & healthcare, finance and food & agriculture, read our full report.
Current efforts remain insufficient to change our course towards dangerous climate change. A rapidly warming climate and failure to adequately reduce greenhouse gas emissions underscore the urgent need for greater focus by businesses and other stakeholders on resiliency measures. In 2019 and beyond, we are likely to see greater emphasis on rapid, large-scale investments in effective solutions to prevent global warming from reaching potentially catastrophic levels.
- Rising Global Emissions: Falling prices for both renewable energy and natural gas have resulted in modest emissions reductions amongst heavy emitters such as Europe and the United States. However, none of the four largest global polluters (China, the United States, the European Union and India) are currently on track to do their part in global efforts to reach the Paris Agreement goals. Global GHG emissions rose by an estimated 2.7 percent in 2018, reaching an all-time high.
Source: Climate Action Tracker
- Adaptation Investment is Urgent: The impacts of 1C warming are far more severe than predicted highlighting urgent need for greater investment by companies and governments in climate resilience. Extreme weather is causing billions in damage annually, with flooding, storms & drought in Asia coupled with raging fires in the United States, Canada, Greece and Sweden. Climate global impacts to urban environments are currently estimated at $314 billion each year and are predicted to increase to more than $415 billion annually by 2030.
- Growing Debate About Geoengineering: A dangerously warmed climate is leading to renewed discussion among experts about the pros and cons of geoengineering interventions. While there are many proponents of geoengineering solutions, the science is still largely based on theoretical models and has been criticized for being potentially dangerous and for presenting policymakers with the promise of a silver bullet that may slow attempts to reduce emissions.
Engaged citizens, joined by a growing number of Gen Z teens, are increasingly taking to social media and the streets to demand action from governments and businesses on pressing social and environmental challenges. Savvy companies are tapping into shifting consumer values and empowering people to act on important issues like climate change.
- Power to the People: Around the world a small but growing number of citizens are rising up to challenge institutions, companies and governments and are increasingly using social media and other digital technologies to spread the message and mobilize people. One in five Americans have protested in the streets or participated in political rallies over the last two years.
- Gen Z Coming of Age: Born at the turn of the century, Gen Z will overtake millennials to become the largest generation of consumers by 2020. Gen Z are already important influencers, engaging companies and governments on a range of issues. Youth turned out in force for COP24 in Poland and sent a record-breaking message calling for global leaders to meet the 1.5C target in the form of 125,000 postcards laid out on Aletsch glacier in Switzerland.
- Empowering Action at Home: People increasingly want companies to take meaningful action on environmental and social issues. Leading companies are finding ways to enable people to make easier, sustainable, cost-effective changes to their lives. A recent study of 30,000 people in 35 countries found that 62 percent of customers want companies to take a stand on issues such as sustainability, transparency and fair employment practices.
Global Security Threats
The global community is facing challenges on international trade, the impacts of climate change and the growing severity of cyber warfare, all of which are impacting progress on sustainable development.
- The Cyber Battleground: From state-sponsored cyberattacks, to terrorist cells, and the growing sophistication of lone hackers, the threats of cyberwarfare are growing. The World Economic Forum’s Global Risks Report 2018 identified cybersecurity breaches as one of the greatest risks to humanity.
- Trade Tensions Threaten Global Economy: The Trump Administration is attempting to reduce imports from countries with which the US has a trade deficit, disrupting trade negotiations with the European Union, Canada and Mexico, South Korea, Japan and, most importantly, China. Ongoing tension between the world’s two largest economies over trade is increasing the likelihood of a global economic downturn by 2020. According to IMF, trade tensions could reduce international growth by around 0.5 per cent by 2020.
- Climate Change Tops Global Security Threats: Climate change is increasingly recognized as the number one global security threat. Climate-related security threats include impacts to essential resources such as agricultural crops and drinking water, which can in turn exacerbate existing conflicts. The World Bank predicts that over 140 million people will be displaced by climate change alone by 2050.
Saving Ecosystems and Tackling Waste
Our ecosystems are facing extraordinary threats – with species disappearing at alarming rates, land degradation threatening the wellbeing of millions of people, worsening air pollution costing millions of lives each year and plastic pollution in oceans and on land reaching dangerous levels.
China’s decision to ban plastic and e-waste imports has thrown waste and recycling markets into turmoil, exposing the magnitude of plastic pollution and escalating the urgency to reduce and recycle far more materials.
- Biodiversity at Breaking Point: Assessments of the Earth’s ecosystem present a very bleak picture. While awareness about biodiversity loss is growing, attention paid by companies and other organizations to the issue remains limited. According to the most comprehensive assessment of global ecosystem health in recent decades, species are currently disappearing 1,000 times faster than their natural rate of extinction.
SDG 14: Life Below Water and SDG 15: Life on Land are currently among Sustainable Development Goals that receive the least attention by businesses and other organizations. Source: GlobeScan-SustainAbility Survey.
- Waste and Plastic Hit Headlines: Global awareness about plastic pollution and its impact on our ecosystems continues to grow. Several major global coalitions have been announced to tackle the issue including the New Plastics Economy Global Commitment, UNEP’s Global Plastics Platform and many others. Businesses are experiencing growing pressure from consumers to reduce plastic waste.
Cities, Regions and Business Taking the Lead
Global governments are enduring an ongoing crisis of trust. Non-state actors such as city and regional governments and the business community are stepping into the leadership void and taking action to create a more sustainable, equitable future.
- Mistrusted Governments: National governments around the world are experiencing an ongoing crisis of trust. Trust in national governments in a majority of European countries remains low, including the UK, Germany, France, Spain, Italy and Russia. The US and Latin America also have low levels of trust in government with Brazil, Argentina and Colombia all scoring less than 50
- Cities and Regions Lead: With global leaders failing to take adequate regulatory action on a range of issues, cities and regional governments are taking on the role of sustainable development leaders. In the US, trust in local governments is at its highest since 2008.
- Business Leadership Is Increasing: Business is increasingly stepping into the void left by global governments, setting ambitious new social and environmental goals, and engaging in radical transparency efforts that help to build trust and credibility with both consumers and employees. Among other leading initiatives, more than 500 global companies are taking action on science-based climate targets. More than 150 companies have committed to 100 percent renewable energy through RE100, and 23 multinationals have committed to zero emission vehicles through EV100.
Aiste Brackley is based in the San Francisco Bay Area and leads SustainAbility’s think tank activities including research on global sustainability trends, and advisory projects spanning a variety of sectors with an emphasis on technology, energy and healthcare industries.