Industries that are going green to protect our planet

rethink sustainability

Industries that are going green to protect our planet

When David Attenborough talks people listen. His latest warning is particularly dire - if society doesn’t act now to take control of the problems affecting our planet, over one million species of animals and plants could face extinction. The warning comes as a perfect storm is hitting our wildlife - overfishing combined with spikes in population growth, higher consumption and land degradation due to enhanced food production have all combined to threaten the environment. The pollution produced by industries attempting to cater to our growing demands is eating away at animal populations around the world. 

It is not just a problem affecting animals - the soils, forests, water reserves on which our economies exist are also under threat from pollution and excessive extraction. This ‘natural capital’ is being drained at a rate that is unsustainable and change is necessary so that we can transition to a sustainable economic model - a fact that investors are becoming increasingly concerned about.

But the market and governments are now starting to reverse the trend in order to stop one million species facing extinction and to ensure our natural resources do not dry up. Curbing the emissions of some of the most polluting industries will go a long way to halting the problem. But what steps are industries taking to tackle these issues? And how will they impact investors' portfolios?

…‘natural capital’ is being drained at a rate that is unsustainable and change is necessary so that we can transition to a sustainable economic model - a fact that investors are becoming increasingly concerned about

 

Natural Capital

In 1986 the ecologists John Seymour and Herbert Girardet argued that civilisations throughout history have routinely collapsed as their farming practices failed. Our economy relies on natural capital and it is imperative that the minerals and ores which sustain us will themselves be sustainable. Our natural resources consumption is rapid - in 2017 we extracted 92 billion tonnes of materials from the earth. Yet we recycle just 9%. Over half of our economy is dependent on natural resources yet we continue to have a ‘take-make-waste’ system, which is draining the resources around us. We wrongly assume these resources exist in infinite quantities and we see our impact on the biosphere is slowly undermining the productive quality of our soils, damaging ecosystem processes such as pollination as well as the natural protection that forests and other ecosystems give us. By transitioning to a Circular, Lean, Inclusive and Clean™ economic model, we can move from a value-destroying economy to one that seizes hidden value and creates value. 

Over half of our economy is dependent on natural resources yet we continue to have a ‘take-make-waste’ system which is draining the resources around us

There are positive moves afoot.  In September 2020, 76 world leaders pledged to reverse the globe’s biodiversity losses over the next 10 years at a UN summit. This comes ahead of next year’s Biodiversity COP where a new agreement, similar to the Paris treaty on climate change, may be reached to set ambitious targets on the preservation of biodiversity and natural capital. At Lombard Odier, we have launched a Natural Capital strategy, inspired by His Royal Highness The Prince of Wales, in partnership with Circular Bioeconomy Alliance. We believe that  harnessing and preserving natural capital is vital to the health of our economy. The strategy endeavours to drive transformational change to a climate and nature positive economy by connecting investors to sustainable investable solutions.


Agriculture

By spreading excess chemical fertilisers and pesticides on crops, farmers are inadvertently polluting the soils they rely on. Fertilisers provide the necessary nitrogen and phosphorus for the plants to grow, but when too many of these nutrients are added, they damage the soil and degrade air and water quality1. The solution? To farm in a smarter way, one that has technology at its core.

The new generation of farmers have embraced technology on large-scale projects with 'precision agriculture' by using fertilisers in a much more efficient and targeted way. Software now allow farmers to analyse soil and farming practices to create buffer zones on their land, which can prevent fertiliser running off into streams2. Another solution remarkably lies in satellite technology, where in the UK, it has been brought in to monitor ammonia emissions3 on farms.

...new generation of farmers have embraced technology on large-scale projects with 'precision agriculture' by using fertilisers in a much more efficient and targeted way

Advances in hardware and motoring have meant that tractors can now be auto-steered4 preventing areas of fields going untended. Satellites can also be a part of the solution by giving much more accurate breakdowns of the weather to allow farmers to be better equipped when managing their land.


Nature as a solution

Current economic models are out of touch with the natural world. We create annually, approximately, 70bn tonnes of waste from natural resource extraction and a substantial part of this is untraced pollution. An answer can be found in nature-based solutions - using nature to tackle societal problems. A simple example is the use of green space in a city, which can increase tourism, improve the life of residents and lower temperature and pollution levels. In eastern India, mangrove forests have been found to protect villages and crops from flooding. When compared with villages that are separated from the sea by an artificial embankment, it was found that the area without mangroves was not as well protected against cyclones5. The natural solution allowed for fish populations to grow more successfully and there was a plentiful supply of timber and medicinal plants. The World Wildlife Fund has described nature based solutions as a “win win” for protecting the ecosystems while at the same time addressing society’s challenges.


Food waste

The scale of food waste is galling. It is estimated that 40% of the food produced for consumption in the United States goes uneaten6. Beyond the moral considerations of so much waste come the practical ones - a vast amount of energy has gone into the production of that food only for it to end up in landfill where it generates methane, a powerful greenhouse gas. That includes using up water supply; transporting food for no reason and unnecessary farming. It is however a well recognised problem and there are many ways to tackle it. There is a blossoming mini-industry to companies making products from waste.

There is a blossoming mini-industry to companies making products from waste

From flour made out of the by-products of tofu and soy milk7 to making ingredients for snack bars as a result of the beer making process8 and converting brining water from pickle9 making into a Bloody Mary mix. The ideas are endless. In Holland, Q-Point10 has used its data analysis to correctly estimate the demand on supply and demand in zoo restaurants, reducing waste and making the ordering of raw materials more efficient. 


Sharing economy

At the centre of the transfer to a CLIC™ system is a move to the sharing economy - the idea that resources can be constantly reused to avoid waste. By efficiently using production and consumption, the wasteful accumulation of idle assets can be tackled, and as a result pollution, emissions and carbon footprints reduced. Amongst the most prominent examples have been in transport - French car pooling company Bla Bla Car has been credited with reducing fuel consumption and emissions while freight sharing has been taken to new levels thanks to digital advances11. In clothing, companies are increasingly offering to give discounts in return for used clothes, as was seen recently with chains such as Arket and H&M.
 

1 https://www.epa.gov/nutrientpollution/sources-and-solutions-agriculture
2 https://www.edf.org/ecosystems/resilient-agriculture/precision-agriculture
3 https://stfc.ukri.org/news/using-space-technology-to-tackle-air-pollution-caused-by-farming/
4 https://eandt.theiet.org/content/articles/2016/02/farming-from-space-space-technology-in-agriculture-1/
5 https://www.naturebasedsolutionsinitiative.org/news/mangroves-in-india-provided-cyclone-protection/
6 https://www.nrdc.org/sites/default/files/wasted-food-IP.pdf
7 https://www.fastcompany.com/90284802/this-company-converts-food-byproducts-into-new-healthy-food
8 https://www.regrained.com/
9 https://therealdill.com/
10 https://www.worldfoodinnovations.com/innovation/hands-on-solution-for-reducing-food-waste-in-the-hospitality-industry
11 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/777699/fom_freight_sharing_economy.pdf

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