SustainableQATAR’s 52 weekly challenges – that is one challenge per week for a whole year themed by month – are Qatar-specific and Qatar-relevant opportunities for all residents to take actions in personal life, work and within our communities.
Fresh off the presses, How Climate Change Could Trigger the Next Global Financial Crisis urgently calls to action for all of us to review our investment portfolios and assess our personal financial stability and potential loss from the risks of climate change.
“The need to manage emerging mega risks is as important as ever because alongside major technological, demographic and political shifts, our very world is changing with profound implications for insurance, for financial stability and for the economy … Once climate change becomes a defining issue for financial stability, it may already be too late.”
Mark Carney, Governor of the Bank of England
The source for “the tragedy on the horizon” according to Mark Carney is clear: risk is a function of cumulative emission and will disrupt business and cause property loss on a massive scale. What’s the surprisingly ‘easy’ way out? Early action is less costly, Mark Carney argues.
As with climate change itself, financial stability is abstract to most people, seems overwhelming, and beyond our personal control. However, we all understand – to some extent – that climate change will threaten financial resilience and long-term prosperity. So, what can we do?
The Wall Street Journal Special Report “Investing with Purpose” [June 27, 2019] summarizes why the investment community has adopted Environmental Social Governance (ESG) as a driver for financial performance, saying: “there is fiduciary duty to consider ESG. The World is becoming too complex for old tools to address the risks like climate change.”
Strategic sustainability and ESG have become the enabling force for competitive advantages that drive value creation and shared value not only through product and service innovation but also through reduced operating expenses. Proactive companies figure out how to cash in on sustainability in the profit equation (Return on Capital Employed – ROCE).
“The goal is not to have the longest train, but to arrive at the station first using the least fuel.” Tom Murphy, CEO Capital Cities Broadcasting
ESG investing differs from socially responsible investment (SRI). While socially conscious funds simply screened out entire undesirable industry such as weapons, tobacco, and polluting manufacturers, ESG is based on big data that links environmental performance to financial performance as summarized on the Oxford University – Arabesque study entitled From the Stockholder to the Stakeholder on the economic effects of sustainability.
The whole finance sector has started to embrace climate action as a way to limit risks and liabilities, which also aligns with the goals of the Paris Climate Agreement to implement the Sustainable Development Goals (SDGs). Effective financial rules can be effective in properly weighing the social impact of all financing and investments and individual consumers as investors play an important role. Where we put our money matters and can influence and contribute to meet all 17 UN SDGs.
Is this realistic? Yes! Even countries that build their wealth and economies on fossil fuel need to face realities. The Norwegian government has ordered its $1 trillion sovereign wealth fund, with more than $13 billion in oil and gas companies including its national company Statoil, to divest and exclude holdings in fossil fuel companies and more $20 billion into renewable energy.
Qatar’s economic wealth is also entirely based on fossil fuels like oil and gas. However this is why the aspirational Qatar National Vision 2030, which states “Economic development and protection of the environment are two demands neither of which should be sacrificed for the sake of the other,” aims for a transition to a knowledge-based economy. In 2016 Qatar Stock Exchange published its ESG guidelines to educate in and encourage listed companies with implementing and incorporating ESG reporting into their existing reporting processes.
The most straightforward way to build a resilient personal investment portfolio is to direct our spending according to our values. We can use our powers of choice and discretion to:
We know it takes more than a few small personal initiatives to make our planet eco-friendly. But if you can make one lifestyle change each day this coming week, it’s a start! So are you going to participate in this week's challenge? Let us know what you think about SustainableQATAR’s 52 weekly challenges! And also don’t forget to give us a like and a share – you know it keeps us going!
Also read: https://www.iloveqatar.net/news/community/sustainableqatars-weekly-challenge-22-food-eating-for-brain-health
Image by Konevi from Pixabay
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