2021 – Year in Review for Sustainability

In the face of a problem as enormous as climate change, it can sometimes be challenging to keep tabs on progress and even more difficult to feel satisfied with the state of affairs. As we continue to push for progress, it is important to map out where we are and need to go. There will not be one singular solution to the problems we face, but rather an interconnected series of smaller solutions that chip away at the problem over time. Despite how it may feel, 2021 was a massive year for sustainability, and there were tons of achievements worthy of celebration. There were also, of course, quite a few setbacks. 

We decided to break down some of the biggest news in sustainability from 2021. We’ve covered from the good to the bad, and even the downright confusing.  

The Good.

1. Pepsi commits to regenerative farming

PepsiCo plans to convert 7 million acres of farmland, the total sum of its agricultural footprint, to regenerative farming. These more regenerative practices include planting cover crops, which help reduce runoff and overall fertilizer usage while also sequestering carbon. Pepsi has also been developing a peer-to-peer learning network about regenerative practices, which it hopes to expand in the coming years.

By 2030, PepsiCo plans to reduce its greenhouse gas emissions by 3 million tons while also improving the livelihoods of 250,000 farmers.

2. New sustainability standards introduced

The IFRS Foundation is developing new global standards for sustainability disclosures. They have currently released a prototype series of standards that are being workshopped with other stakeholders. The goal is to create a new standard that greatly improves transparency on how companies impact the environment.

3. One-third of European companies pledge net zero

Nearly one-third of European companies have pledged to be carbon neutral by 2050. In some countries such as the UK, these pledges are more aggressive, with 37% of companies pledging to be carbon neutral. Globally, one-fifth of the world’s largest companies have made the same pledge.

4. It is cheaper to build new renewable energy plants for about half of the world’s population (46%) than to keep running existing fossil fuel-based power plants

According to the latest analysis from Bloomberg NEF, even with the risk of increasing commodity prices, a new solar park or wind farm is still competitive with existing coal or gas plants in countries that represent 46% of the world’s population

5. World economy set to lose up to 18% GDP from climate change if no action taken

According to Swiss Re Institute’s stress-test analysis global GDP is set to fall anywhere from 4-18% based on temperature increases by 2050. This profit incentive could help drive the market closer to the 2-degree temperature increase targets set by the Paris Accords. 

6. Lululemon makes pants from waste byproducts

“This particular ethanol comes from a steel mill in China, where we have a commercial plant operating which ferments basically carbon monoxide gas and converts that to ethanol,” says Jennifer Holmgren, CEO of LanzaTech. “Then we can take that ethanol and make anything that we want.” If the carbon monoxide wasn’t captured at the steel mill, it would be burned and released as CO2 pollution. 

7. 30 countries say they’ll phase out gasoline-powered cars

Six different car manufacturers join 30 countries, saying they plan to phase out gasoline-powered cars by 2040. Ford, Mercedes-Benz, General Motors and Volvo are some of the biggest names to pledge, with notable absences from the likes of Toyota (who has heavily invested in hybrid technology) and Volkswagen.  

Hopefully, advances in battery technology and new manufacturing processes will lower the lifecycle environmental cost of electric vehicles, which at the moment, struggle to remain environmentally competitive with traditional gasoline vehicles in some cases. 

8. Alternative crypto mining method

A new crypto mining method offers a substantial environmental advantage over traditional methods in a big win for decentralized currency. Typically, the value of a cryptocurrency is associated with “proof of work,” a technique that requires a computer to solve complex mathematical problems. This uses a considerable amount of energy and has been blamed for rolling blackouts in China by straining their electrical grid. The new “proof of stake” method requires the computer to allot storage space, requiring far less energy. Cardano, the most valuable proof of stake crypto currency, currently has the fifth largest market cap of any cryptocurrency.

The Bad.

1. Iceberg more than 70 times larger than Manhattan broken off

According to the European Space Agency, an iceberg 70 times larger than the size of Manhattan has broken off and drifted into the Weddell sea. 

2. Failures of COP26

Climate activist Greta Thunberg bluntly stated, “It’s not a secret that COP26 is a failure.” 

By the words of Vanessa Nakate, an activist from Uganda: “We are in a disaster that is happening every day.” Africa has been ravaged by climate change-induced flooding and other natural disasters, despite only being responsible for 3% of the world’s carbon emissions. Nakate made it clear she felt unheard: “How will we have climate justice if people from the most affected areas are not being listened to?”. Global leaders will make choices at this conference that disproportionally affect African Countries. It only seems fair they get a seat at the table. 

Many believe that the pledges made at COP26 do not go far enough to prevent the world from sustaining irreversible damage. They also fear that these pledges are mere lip service and will not be followed through with action, as has been the case in the past. 

3. Failures of Biden administration

Biden gives a strongly worded speech amidst weak US climate policy. “We’re standing at an inflection point in world history. We have the ability to invest in ourselves and build an equitable clean energy future, and in the process create millions of good-paying jobs and opportunities around the world.”

This speech comes on the heels of climate policy being unceremoniously removed from the reconciliation bill currently making its way through Congress.

The United States failed to join an international agreement to phase out coal, reportedly out of fear of upsetting Democratic Congress Member Joe Manchin. Joe Manchin has deep ties to the coal industry and currently occupies a seat in the Senate where Democrats hang onto a one-person lead.  

Despite this, Senate Democrats told the Washington Post that they feel like they are “genuinely back in the game” and that other countries are aware that “this is our opening bid, and we’re not going away.” 

This statement comes during a turbulent push to pass Biden’s “build back better” plan, which has been gutted of climate policy. Many progressives have been vocally dissatisfied with the bill’s lack of climate policy, and it remains unclear if they will vote to approve the bill without it.  

After Democrats lost the most recent gubernatorial race in Virginia, where Biden won by 10 points, we will see if Democrats are truly “not going away.” 

To Be Determined.

1. Largest container shipping organization advocates for a carbon tax

The world’s largest container shipping company, Maersk, advocates for a $150 per ton carbon tax. Maersk claims that this tax would be to level the playing field with greener alternatives to fossil fuels, which are more expensive to use at the moment. A carbon tax could speed up the rate at which greener alternatives are adopted if they become more cost-effective. 

However, how many of Maersk’s competitors could afford to either pay the carbon tax or adopt greener shipping practices is unclear. This could be a way for Maersk to consolidate market share in the container shipping industry. If shipping costs went up across the board while straining the already tense global supply chain, it would help to stabilize a competitive marketplace and decrease shipping costs in the long run while transitioning to greener methods. If Maersk chooses to undercut their competition, however, and temporarily eat the higher costs, this could be bad news for the global supply chain. 

2. The CEO of BlackRock warned companies who don’t prepare for a net-zero economy would see their business suffer 

Larry Fink, CEO of BlackRock, the largest asset manager in the world issued a letter to fellow CEOs and said “There is no company whose business model won’t be profoundly affected by the transition to a net-zero economy…companies not quickly preparing themselves will see their businesses and valuations suffer.”

He also acknowledged “No issue ranks higher than climate change on our clients’ lists of priorities. They ask us about it nearly every day… We know that climate risk is investment risk. But we also believe the climate transition presents a historic investment opportunity.”

BlackRock unfortunately is likely only pushing their own agenda on ESG investing. BlackRock’s flagship ESG fund contains premier fossil fuel companies (such as ExxonMobil) and leading plastic polluters (for example Procter & Gamble and Coca-Cola) which are unlikely to help in the fight against climate change.

We believe that sustainable investing can equate to meaningful change, but only if put into the right hands. When used for greenwashed marketing campaigns, they fuel distrust and mislead people who genuinely are looking to make an impact. Instead, we view sustainable investing as a community-based effort to vote with your dollars and have collective control over your future. Making changes to your daily life like biking to work or going vegetarian are great ways to reduce your impact, but sustainable investing gives you, the investor, access to levers of systemic change.

The fastest way to incentivize change in the stock market is by changing what is profitable. Companies will have to change along with the times with a large enough group of investors who care about real sustainability issues. Of course, this will be only one step in the path towards a sustainable future, but we believe it will be one of the most important. It’s time that we stop letting giant investment firms decide what the future looks like and make our voice heard! 


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