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Does sustainable investing work? A Response
By: Steve Rocco - MS Innovation Lab & Matt Orsagh -ED4S
This article is published in response to a call for views on the impact of sustainable investing.
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Before we can answer, we need to be clear on what problems we are trying to solve. Our problem-solving capabilities require prioritization based on our limited time and resources. While there is no formal mechanism for this problem prioritization, we can look at a few well-established concepts as guides.
Starting with science, we can begin with the planetary boundaries framework created by the Stockholm Resilience Centre. This framework “identifies nine processes critical for maintaining the stability and resilience of Earth system as a whole.”[i] In simple terms, we and all our economic activity depend on the planet for our basic needs like food, air and water, known as ecosystem services[ii]. If our ecosystem breaks down, we risk losing these ecosystem services. Anyone who has visited a farm can see this process in action. But what is harder to see is that there is a limit to the amount of ecosystem services that the planet provides.
The planetary boundaries framework takes these nine processes for maintaining these ecosystem services and integrates the idea of limits or boundaries. Why? Because all systems have limits. Try driving a car without gas (or hopefully electricity) and you will see the system’s (your car’s) limits. Cut down too many trees in a forest (at a rate faster than new trees can grow) and the forest will change into grassland and lose its ability to absorb carbon. Systems are complex and need to be understood as such.
We can also look at the EU’s taxonomy and SFDR[iii]. The key objective of the taxonomy is to establish a unified classification system for sustainable economic activities to help reorient capital flows towards sustainable investments. It defines sustainable investment as “an investment in one or several (of six) economic activities that qualify as environmentally sustainable” where the investment would contribute to one of the six while doing no significant harm to any of the other objectives and respecting basic human rights and labor standards. The SFDR regulates the sustainability-related disclosure rules that asset managers must follow.
The key takeaway is that our economy, the value of our investments, and our livelihoods depend totally on a natural system (Earth) that provides us with ecosystem services but only to a certain limit. This is based on science, not a political or economic concept. The idea that there is a limit to the amount of ecosystem services that the Earth provides us has a name: sustainability.
Sustainability is derived from the Latin word sustinere, which means to “maintain, support, uphold, or endure” and implies an ability to continue some activity over a long period. But there is no one definition of sustainability, since it is based on what people value or find desirable (i.e., normative) which changes over time, geographies, and cultures.
Adding to the confusion is how the word sustainability is used. According to UNESCO, "Sustainability is often thought of as a long-term goal (i.e. a more sustainable world), while sustainable development refers to the many processes and pathways to achieve it."[iv] A combined definition, which has shaped our present use of the term is the 1987 UN Brundtland report[v] which defines sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs,”[vi] and eventually led to the UN’s Sustainable Development Goals.
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How California boosted composting — but broke local composters in the process
As cities and towns contract with large waste haulers to comply with a California composting law, some community composters say they're being pushed to the margins.
In the first few years after Monique Figueiredo founded Compostable LA in 2019, it grew rapidly. The small business picked up food scraps from homes, event spaces, and businesses — ranging from Walmart to Nike — and delivered it to urban farms and community gardens where it was made into high-quality compost. It wasn’t long before the venture had more than 1,000 customers throughout the city of Los Angeles.
Figueiredo’s business diverted food waste from landfills while educating young people, corporations, and consumers about the value of composting and providing free compost to more than a dozen urban farms and gardens that feed people in some of the city’s most marginalized communities.
Then, in 2022, cities around California began implementing SB 1383, a law that requires them to contract with large waste hauling companies to pick up food scraps at the curb, along with garbage and recycling, and transport it to industrial-scale composting facilities outside the city. The law aims to cut organic waste in landfills by 75 percent by 2025 and is on its way to doing so, but it has also had unintended consequences for community composting operations across the state. Within weeks, Compostable LA’s residential customers began to cancel their memberships. The city had signed contracts with a few large haulers who bundled their green bin service with the other two, and all customers were charged regardless of whether they used it.
Many of Compostable LA’s members couldn’t afford to pay for two services, they told Figueiredo. The company was hit hard, and by late August 2024, with only 400 customers left, it had to stop providing residential services. Figueiredo laid off her eight-person staff. And while it may continue providing the services to some businesses and events, she’s not optimistic about the company’s future. After years of advocating within Los Angeles and at the state level for a place at the table among larger waste management companies, she feels incredibly worn down.
“Even if this business continues to be viable, I don’t know if I’m viable anymore,” she said. If Compostable LA shuts down, she added, “it is directly correlated to uninclusive policies.”
The composting law is causing a sea change in California. Since 2022, the year the law took effect, the number of cities, towns, and other jurisdictions with access to residential food and yard waste collection jumped from 50 percent to nearly 80 percent. And still more are working on complying. According to the public recycling and compost management agency CalRecycle, the state has more than 200 organic waste processing facilities and is building 20 more to accommodate the flood of food scraps expected. These measures are diverting significant quantities of waste from landfills and reducing the amount of methane, a potent greenhouse gas released when food scraps decompose, entering the atmosphere.
But community composting groups and their advocates argue that its implementation is also hampering urban farming programs and educational programs in the communities that need it most. The introduction of large haulers in many cities, they say, has pushed community composting to the margins, and limited it mainly to drop-off hubs, which by nature only reach the most dedicated participants willing to haul their waste to predetermined sites.
Community composting has several environmental and public health benefits. Industrially made compost is often contaminated with herbicides from yard waste to PFAS from additives like food packaging, paper products, and compostable to-go ware. Due to its poor quality, urban farmers typically don’t use it to grow food on its own.
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World’s Rivers Are Driest They Have Been in Decades
Last year, the world’s rivers had their driest year in at least three decades, according to a new U.N. report, which warns that heat and drought are sapping vital waterways.
Warming is fueling both heavier rainfall and more intense drought globally. As the planet heats up, “we are facing growing problems of either too much or too little water,” said Celeste Saulo, secretary-general of the U.N. World Meteorological Organization, which authored the new report.
In 2023, the hottest year on record, the Mississippi River and Amazon River basins were at all-time lows, while the Ganges, Brahmaputra, and Mekong rivers, which all have their headwaters in the Himalayas, were also unusually dry. Across nearly half the globe, rivers were drier than normal.
Last year also saw severe heat shrink glaciers that are a crucial source of meltwater. Glaciers worldwide lost more ice in 2023 than they have in at least five decades, with glaciers in Europe and North America hit particularly hard.
“Melting ice and glaciers threaten long-term water security for many millions of people,” Saulo said. “And yet we are not taking the necessary urgent action.”
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Miami Meteorologist Gets Emotional Talking About Hurricane Milton, Climate Change
Miami meteorologist John Morales struggled to fight back tears on Monday as he informed viewers that Hurricane Milton had intensified to a Category 5 storm.
“It’s just an incredible, incredible, incredible hurricane,” he said on NBC Miami, choking on his words as he described the storm’s catastrophic drop in pressure over a 10-hour period. “I apologize. This is just — horrific.”
As the storm churned over record-hot waters in the Gulf of Mexico, Milton grew from a Category 1 to Category 5 hurricane in just 18 hours — a phenomenon known as “rapid intensification” that scientists say is becoming increasingly common due to climate change.
“It is just gaining strength in the Gulf of Mexico, where you can imagine the seas are just so incredibly, incredibly hot,” Morales said on the air. “Record hot, as you might imagine. You know what’s driving that. I don’t need to tell you — global warming, climate change leading to this.”
Fossil-fuel-driven climate change is causing the world’s oceans to rapidly warm. Warm water acts as jet fuel for tropical storms, allowing them to quickly gain strength.
In a subsequent post on X (formerly Twitter), Morales said he debated whether to share a video of his emotional update about the hurricane.
“I did apologize on the air,” he wrote. “But I invite you to read my introspection on @BulletinAtomic of how extreme weather driven by global warming has changed me. Frankly, YOU should be shaken too, and demand #ClimateActionNow.”
Morales need not apologize, however, for providing unfiltered warnings about the devastating consequences of the world’s inaction on climate change — a drum he’s been pounding for years.
Hurricane Milton’s rapid growth on Monday left climatologists and meteorologists around the country stunned. On social media, many said the storm’s development, which surpassed even the worst forecasts, left them with “no words.”
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Winter blackouts risk in Great Britain ‘lowest in four years’ despite end of coal
By: Jillian Ambrose - The Guardian
Energy system operator expects winter power supplies to outstrip demand by almost 9% this year
The risk of winter blackouts in Great Britain has tumbled to its lowest in four years even after the shutdown of the UK’s last coal plant, thanks to investments in low-carbon electricity sources.
The National Energy System Operator (Neso) expects Britain’s winter power supplies to outstrip demand by almost 9% this year in its base case scenario, the greatest margin since the winter of 2019 to 2020.
The company responsible for keeping the lights on, which was bought by the government from National Grid at the start of this month, said the power supply margin for this winter was higher because Great Britain has more battery storage projects, small-scale renewables and imported electricity.
The UK is expected to rely on record levels of imported electricity this winter, the first since the world’s longest high-voltage power cable began importing enough clean electricity from Denmark to power 2.5m British homes.
The Viking power link, which can also export British electricity to Denmark, is a vital part of the UK’s strategy to wean itself off fossil fuel power by creating a flexible, low-carbon electricity grid.
These steps towards Britain’s legally binding 2050 climate targets are expected to more than offset the impact of retiring power plants, including the closure of the UK’s last coal-fired power plant at Ratcliffe-on-Soar, which was called on to supply 2.3% of the UK’s electricity during a cold snap in January.
During the Europe-wide gas crisis caused by Russia’s invasion of Ukraine in early 2022, Britain kept its old coal plants on standby to keep the lights on if it was short of gas to run its power plants.
However, for the winter ahead concerns have been eased by the abundant gas stores across the EU, which are 95% full. In addition, Britain expects to import gas from Norway’s pipelines and via tanker from the US or Qatar through the winter months to meet the demand of power plants, factories and homes.
The conflict is not considered a threat to the UK’s gas supplies, according to Neso.
Craig Dyke, a director at the publicly owned company, said: “While our margin assessment has improved from previous winters, we are continuing to monitor risks and uncertainties and, if necessary, will take steps to build resilience.”
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