Sustainability and the Private Sector
More large corporations and investment management funds are making sustainability their focus as President Biden begins taking climate action
The world is facing multiple interlocking crises that will require new ways to leverage all sectors of society. People across the globe are turning to the government as the first line of defense against the rising tides of unemployment, COVID-19, climate change, and other challenges. However, governments cannot be alone in the fight. The participation of private sector players will be crucial to coordinate a proper response that ushers in a period of sustainable development.
The COVID-19 pandemic has accelerated the funding for sustainability initiative. More investment management firms are channeling dollars to companies with better environmental, social and governance (ESG) practices than ever before. Today, one in every three professionally managed dollars in the United States — $17 trillion — is invested with an ESG focus.
Today, 90 percent of S&P 500 companies publish sustainability reports. Ten years ago, it was just 20 percent. Companies are taking into consideration multiple stakeholders including employees, customers, communities, the environment and shareholders. This reflects the new model of stakeholder capitalism that President Biden has championed. In one speech, he said stakeholder capitalism “isn’t a new or radical notion, these are basic values and principles that helped build this nation.”
Just a little over one month into his Presidency, President Biden has made some considerable efforts in advancing sustainability initiatives. Some of them include:
Signing an executive order returning the US to the climate accord. In the coming months, the Biden administration must also develop a new emissions-cutting target, known as a Nationally Determined Contribution, which will determine the scope of the country's ambitious goals over the next decade.
Appointing John Kerry as the U.S. Special Presidential Envoy for Climate, making him the most senior government official to have ever held the position. He was previously the 68th United States Secretary of State from 2013 to 2017.
The 40% directive appears to cover spending from future legislation — such as Biden's proposed economic recovery and infrastructure packages — as well as existing federal programs.
Cancelling the permit for the keystone pipeline. “Killing the Keystone XL pipeline once and for all is a clear indication that climate action is a priority for the White House,” said Dale Marshall, national climate program manager for Canada’s Environmental Defence.
These actions and many more to come will likely represent a lot of hard work across academia, businesses, government, environmental advocacy groups, students, and many more stakeholders. We are excited at Triple Impact Consulting to continue doing some incredible work this year in advancing sustainability.