Sustainability: Drawing force from lines of tension
Much like a gem is forged under pressure, the ESG movement is powerful because it results from tension at multiple levels: between art and science, absolute and relative, exclusion and engagement. Francois de Bruin explores the lines of tension underpinning the investment approach to sustainability.
Over the course of history, few teenagers have influenced the world as much as Greta Thunberg. Many watched with awe as she made a stand for the planet, inspiring countless others to take to the streets and fearlessly calling powerful leaders to account.
At the World Economic Forum in Davos in January, her demands were uncompromising:
“Immediately halt all investments in fossil-fuel exploration and extraction.
Immediately end all fossil-fuel subsidies.
And immediately and completely divest from fossil fuels.”
Yet as Thunberg was addressing world leaders in Davos, South Africans were facing daily power cuts as national utility Eskom battled through its deteriorating infrastructure. For the country’s population of 59 million people, no electricity for hours on end meant no lights, no warm water, no internet and, in cases of emergency, no help.
South Africa is almost entirely powered by the most environmentally damaging fossil fuel of all: coal. Yet the power cuts showed that if the country abandoned fossil fuels overnight, as Thunberg demanded, millions of its people would be left in dire straits. This raises an uncomfortable question: how can we save the planet without adversely impacting people’s lives? Or to put it another way, how we can we work towards our long-term goals without causing undue short-term pain?
Responsible investors find tensions like this at every turn. As a result, aspirations to invest sustainably are both complex and powerful. Drawing on the concept of connected thinking, three interrelated forms of tension can be brought to light. Although this article explores each one in turn, they should not be considered separately, but together can help elevate the debate, moving from an ‘or’ consideration to an ‘and’ perspective.