Greentech: Trends and Developments for a Climate Positive World
The world is in a state of upheaval. It is in crisis. Climate crisis, energy crisis, inflation – and the pandemic just recently officially ended. We seem to be slipping from one crisis to the next. But there are pioneers who are paving the way to a better world and shaping the future through innovation.
Rethinking Entrepreneurship
"Sustainability" is a term that has gained immense relevance in recent years, especially as a result of the international climate movement – and at the same time, the term has been washed out (in the truest sense of the word) by greenwashing. Because it is not yet legally protected, it remains easy for companies to give themselves a green makeover without fundamentally changing their processes and structures.
Impact entrepreneurship means going ahead ethically and transparently, being innovative, and creating something new and meaningful – even from things that our society may not have previously valued. Only companies that take on the fundamental challenges of transformation will be economically successful in the long term because change is coming, whether you like it or not.
Patagonia Walks The Talk
The outdoor clothing company Patagonia, for example, recently announced changes to its ownership. The Chouinard family transferred its ownership to two new environmental foundations – the Patagonia Purpose Trust and the Holdfast Collective. As a result, every dollar not reinvested in the company will go to protecting our planet as a dividend.
Yvon Chouinard, Patagonia founder, former owner, and current board member says of the decision:
"It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader, I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder. I am dead serious about saving this planet."
How companies are run – whether or not they act responsibly toward society and the environment – has a critical impact on their profitability and the future of humanity. Patagonia is setting an example of how corporate goals can be combined with socio-environmental responsibility.
Changes in the Financial World?
Investments in fossil fuels continue to be made on a massive scale, thus fuelling the climate crisis. There are still many investors who earn lucrative returns with climate-wrecking businesses. However, this will prove to be a short-sighted delusion and both unsustainable and uneconomical. For on the one hand, the raised awareness of the urgency of the climate crisis is enormously increasing the pressure on markets, industries, and brands to innovate and transform. At the same time, it will result in stricter financial, economic, and social policy regulations – largely driven by extra-parliamentary movements – that will, for example, make fossil fuel extraction at least unprofitable, if not even impossible.
The financial system holds great power because investments and capital flows can make a significant contribution to achieving the United Nations' SDGs (Sustainable Development Goals) – or work against them.
This also applies to private investments. So-called ESG investments have gained great popularity. However, they usually do not withstand a closer look, even if their names promise it: ESG stands for "Environmental, Social, Governance”. As a result, investors may inadvertently invest in companies that merely want to give themselves a green make-over – such as oil companies that are classified as "best in class" and thus deemed more sustainable than others in their industry. However, it is not in their interest to radically change their business. As always, not everything that looks sustainable at first glance actually is.
Value-Based Investments: Everyone Can Make a Difference
Impact investments offer a much safer option. These must produce a measurable positive social impact. With the help of impact investment providers such as ecoligo, even small investors can use their money to support companies and organizations that benefit society and the environment and, at the same time, achieve a return on their investment. It is, therefore, also possible for small investors to make financial gains and promote change that has a positive impact on the future of our world.
Leading the way in the trend towards value-based investing are the younger generations – the Millennials, also known as Generation Y, as well as Generation Z. According to a study by Swiss Life Germany, sustainable investments are very or somewhat important for 42 percent of Millennials and 50 percent of GenZ. Already, 25 percent of GenZ and 18 percent of Millennials have completed a value-based investment. Another 41 percent of the younger generations can imagine making one in the future. Learn more about how GenZ invests here.
Conclusion
More and more people want to support and invest in companies that act in a socially responsible way. There are pioneers who are working towards a better world through entrepreneurial solutions.
However, we are far from being on the right track. Emissions are increasing instead of decreasing. No matter how much seemingly green packaging and green slogans we see on billboards, there's no need to fool ourselves. We have not yet made the turnaround.
By no means, though, should that be taken as a reason to bury our heads in the sand. On the contrary: we all have an impact. Our companies have an impact. The only question is what kind of development it contributes to.
What contribution is your organization making to ensuring that the 1.5-degree limit is met? Get in touch with us!
