COVID-19 Pandemic Reveals: Investors Have More Control Over What Happens to the Environment Than Perhaps Realized
Signs of the earth’s resilient muscle memory in April and May were on display more than ever in recent memory. Porpoises swam in the notoriously filthy Grand Canal and reefs off of the Italian coast showed signs of life; smog lifted so that the peak of Mt Kilimanjaro was visible for miles around and, the wonder of wonders, the ocean was clear on the Jersey Shore. And while each of these instances is beautiful and comforting, it’s what each represents that’s more important. It meant that cruise ships weren’t dumping refuse into the Venetian Lagoon; that exhaust from several continents wasn’t being trapped in the plains of Tanzania and that toxic runoff wasn’t flowing into the Atlantic. It’s also not just about aesthetics: each of these events means better health and stronger economies.
Let me explain:
For the first few months of the pandemic — with the globe in lockdown — human behavior changed more significantly than most of us have witnessed in our lifetimes. In addition to how we work and how we teach our children, fewer cars were on the road, fewer ships in the ocean and far fewer planes in the sky. Futhermore, many non-essential manufacturing operations were at a temporary or complete halt. This slowing down meant a concurrent plunge in carbon emissions, by an estimated 17%.
We have a lot more control over what happens to the environment than perhaps we realized. In fact, accompanying this cut in emissions was the bounce-back of visible natural conditions and natural life that showed that the start of a climate reboot does not take ten years and that humans changing their habits can have some immediate benefits.
What’s more, it’s undeniable that there is an economic and social benefit to changing the way that we live our lives and run our businesses, and switching to more clean energy in all sectors will help us to achieve that. But to grow, the upcoming years must mean developing a smarter way of working and acting judiciously when it comes to using the earth’s precious resources.
So, while we are working in smaller spaces, taking fewer business trips and traveling less out of home, investors can now focus on the prosperous clean energy and electric future immediately. This opens avenues of possibility, and some companies were already on board even before COVID-19. For instance, America’s automakers are seizing the moment head-on and making significant investments in the future of electric vehicles, which would help carbon emissions remain at their new low for years to come, and perhaps even decrease them further.
While, Tesla has been leading the charge for a long time, even Ford Motor Company is hopping on the bandwagon by becoming an active investor in Rivian which just brought in a round of $2.5billion and General Motors is on track to roll out a fleet of electric vehicles as well by 2023, and Tesla will be rolling out a new fleet of electric vehicles adding to their already significant impact in the EV space. Outside the automotive space, boats and aircraft need a jolt of electric or renewable energy, and investors need to back these strides and support research and development with funds. Already we are seeing significant investments in electric trucks with the goal of lowering carbon emissions, and aviation companies the Electronic Aviation Group are looking to do their part as well. And it’s not just about transportation: for example, Apple is looking to make its supply chain and products 100% carbon neutral by 2030 and Amazon has launched a $2 billion VC fund to invest in the future of clean energy and climate change.
In witnessing immediate emission drops, we saw in real-time that changes in personal, office and household habits on a mass scale can have an instantaneous effect. Put simply, human activity matters. This means that small businesses, hubs of daily innovation, must have the support they need from investors to ensure that they are a part of spurring this revolution. Investors should be making these types of investments too. Put simply, this leap won’t be made by not-driving and not-flying. It will be made by investing in clean alternatives to the ways that we drive and fly now. It’s clear as day that it’s not a zero-sum game — we can change our behavior and still achieve our goals.
We need to build on this accidental progress, investors must push financial support towards the technologies that will make it so. It’s truly great to see Tesla and Amazon continue to make smart long-term investments — more importantly it’s good to see other companies are starting to do the same as well.
