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A Giant Leap Needed for Humankind

When  Neil  Armstrong  first  stepped  on  the  moon  he  may  have  not  imagined  that  after half a century humankind would need another substantial leap, this time with  more magnitude than the extra-planetary achievement he was a part of. Correcting  the unbalances in today’s society and the planet need to sit at the forefront of human  concerns  and  efforts  and  should  represent  the  essence  of  working  for  a  more  sustainable world. 

All of us as individuals and as part of collective stakeholders have a role to play. We  have to work with others at various levels in a collaborative, open and transparent  way,  with  an  honest  and  decisive  commitment,  seeking  consensus  and  balance,  informed by science and by the values and opinions of all stakeholders. And we have  to move fast. 

But we are still a long way from those efforts being pulled together in the right way  and at a global scale. With a planet crying  for help and a society with chronic and  still growing inequalities, not enough is being done. 

If we look at the current role of governments, in a way illustrated by the below par  results of the recent COP 26, we notice the gap in the global consensus that need to  be  achieved  to  limit  the  impact  of  climate  change  to  within  the  Paris  Agreement boundaries.  One  of  the  explanations  for  that  relates  to  solving  one  of  the  biggest  conundrums  in  modern  day  economics  and  politics:  how  to  consume  less  natural  resources and non-clean energy against the background of a continuing high growth  rate of  the world  population  and while the developing world is  still  (legitimately)  seeking better living conditions and economic wealth. Other explanations relate  to  the  power  of  current  economic  vested interests, the  short-term  nature of  political  cycles in democracies influencing required decisions that may not be popular, other  types  of  excessive  focus  on  short-termism, or  simply just inertia  when  faced  with  the need for real change. 

Those reasons explain why some big developing countries are still not in a position  to set net zero targets in line with the Paris Agreement and to accelerate the phasing  out of  fossil  fuel use  (starting with coal and methane) or why some car producing  countries resist accelerating the phasing out of sales of internal combustion engines. While some progress has been made in several  fronts,  the gap to what is required  and the speed of action is still highly insufficient. 

A  true  collaborative  engagement  between  countries  and  an  honest  search  for  balance  and  consensus  is  required.  It  is  important  and  rightly  responsible  for  wealthier countries  to help developing ones  to  the  full extent needed. At  the same  time, some consumption habits need to change, but this does not mean people have  to  abdicate  their  quality  of life,  hardly  built  over many  decades, it  rather  signifies  that  lifestyle  choices  need  to  be  smarter  for  the  good  of  everyone.  Science  and technology evolution should also help steer in the right direction, as will businesses  transformation to offer more sustainable products and services. 

The  challenges  facing  us  can  easily  be  monetised  and  financing  is  also  strongly  needed. While wealthy countries could not bridge  the gap  to  the US$100bn a  year  required in public support  to developing countries up  to 2025,  that amount is just  small change compared with the $100tn estimated to finance the sustainable energy  drive over the next three decades. It is evident that public monies will not be enough  and  partnerships  between  governments,  multilateral  banks,  private  investors  and  financial institutions will be  required. For  that purpose  the constitution of GFANZ,  or  the  Glasgow  Financial  Alliance  for  Net  Zero,  representing  several  large  asset  managers and banks committing to help the transition to a low carbon environment,  is good news as its potential contribution could be highly significant.  It rests  to be  seen  if  and  how  that  potential  commitment  translates  into  reality.  And  the  world  also needs a set of universally accepted common standards to ensure initiatives are  really  genuine  and mitigate  the  risks  of  greenwashing.  Efforts  have  been made in  that direction (e.g. the EU Green Taxonomy) but there still is work to be done. 

Efforts to conclude adequate international governmental agreements in the climate  and  societal  areas  need  to  be  aligned  with  the  right  set  of  targets  and  plans  at  national level. From regularly revising Nationally Determined Contributions (NDCs)  for  carbon  emissions  to  ensure  that  they  are  both  ambitious  and  feasible  to  establishing  the  right national and sector legislation and  regulations, governments  will  have  a  critical  directing  role  to  play.  Among  these,  pricing  carbon  and  adequately  setting  the  respective  global  market  framework  remains  paramount.  Another  highly  important  aspect  is  that  since  the  journey  to  a  low  carbon  world  involves structural transformation, adaptation and a degree of economic and social  sacrifice, it is important  to ensure a just  transition, along  the same lines as  for  the  post-Covid economic and social recovery. The right balanced philosophy and action  can smooth out the journey. 

Alongside  the  efforts  that  governments  and  finance  should  develop,  business  in  general  has  a  crucial  role  to  play  in  the  transition  to  a  more  sustainable  world.  Operating  responsibly  and  adapting  and  creating  products  and  services  that  take  better  care  of  the environment and benefit all  stakeholders in its ecosystem,  from  staff  to  customers,  shareholders  and investors,  suppliers,  other  business  relations  and communities should drive the efforts. 

Achieving  great  outcomes  such  as  becoming  carbon  neutral  (or  even  carbon  negative)  in  a  wider  sense  (i.e.  directly  and  indirectly),  not  harming  the  environment  and  contributing  to  the  well  being  of  all  stakeholders  and  society  at  large should guide all businesses.  

The  most  effective  way  to  achieve  those  final  outcomes  on  a  consistent  and  sustainable  basis  is  to  ensure  a  business  has  the  right  culture,  one  that  puts  sustainability at its  core. This will ensure  that  the  right  strategy and  practices are consistently  present  to  produce  the  desired  results  for  all  stakeholders  and  the  planet. 

Although current efforts produced by all stakeholders in the planet are very shy of  what  is  required  and  the  challenges  ahead  are  daunting,  there  should  be  hope.  If  humankind  was  able  to  advance  science  and  technology  and  to  create  so  much  economic wealth and efficiency, it is certainly capable of solving  the critical issues  now facing us, there being goodwill and a more humanitarian approach. 

We  should  hope  that  world  leaders  will  find  and  use  the  goodwill  to  collaborate,  agree and set adequate international and national policies, laws and regulations. We  should also hope that the financial world will genuinely and effectively support the  huge  scale  of  the  adaptation  and  transition  processes. And  all  those  involved  in  businesses  need  to  work  decisively  and  rapidly  in  transforming  them  for  better,  putting sustainability at its core. 

The test will be passed if in five generations people will look back and praise their ancestors  because  they  did  the  right  thing.  For  that  humankind  needs  various  immediate and decisive steps to achieve the gigantic leap required. 

Ricardo Pires 

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