I call 2019 the year of the “sustainability shift.” Over the past year, more and more companies realized that sustainability, cost savings, risk aversion, and business growth all go hand-in-hand.
Several minor sustainability shifts in 2019 stood out to me. Below are some of the most notable.
This 16-year-old is Time magazine’s youngest Person of the Year. She has become the leading climate activist in the world, with more than 10 million followers on social media. Generation Z (individuals aged 7 to 22) follows her, believes in her, and most importantly, will soon become voters.
In many ways, I’m unconcerned with what leaders in Washington say about climate change. My focus is on what the average person thinks about it. As reported in The Washington Post last September, 8 in 10 Americans believe that our climate is changing—rapidly—and that human activity is fueling it. Half believe action is urgently needed, and about 4 in 10 now consider climate change to be a crisis.
Amazon announced it will be carbon neutral by 2040, and major German cement company Heidelberg pledged to do the same by 2050. Ingersoll Rand, which manufactures HVAC equipment, plans to reduce its end-customer carbon footprint by one gigaton by 2030.
Investing in sustainability tools, technologies, and research previously drummed up few investors. That changed in 2019. According to a Reuters report, fund-tracker Morningstar found that “so-called sustainable funds, which pick stocks based on environmental, social, or governance (ESG) criteria, are on track to take in more than US$16 billion in net new deposits this year, triple last year’s record of $5.5 billion.”
The people pillar
Sustainability has three pillars: profits, planet, and people. In 2019, the people pillar was front and center. Dick’s Sporting Goods announced that the company would no longer sell handguns. Walmart said it would stop selling short-barrel ammunition. Other retailers asked customers not to carry guns in their stores. And Apple, Microsoft, Google, and Salesforce pledged billions to tackle homelessness.
Agriculture and the food industry use billions of gallons of water every year and are leading contributors to greenhouse gasses. Beyond Meat, which produces plant-based meat substitutes, went public in May 2019 and had the biggest initial public offering of the year. More meat substitutes are becoming available online as well. This movement will help protect our most precious natural resource—water—and reduce greenhouse gasses.
A major stumbling block to new renewable energy technologies is that they are costly to make, install, and maintain. These costs, however, are coming down. In April 2019, for the first time, more energy in the United States was derived from renewable energy sources than from coal. Further, what is referred to as low-carbon energy has overtaken fossil fuels in many European countries. This is happening because renewable energy is becoming cost competitive.
All in all, 2019 was a great year for sustainability, and 2020 looks to be even better.