UN Sustainable Development Goals: How Companies Stack Up
Connect with us

Green

UN Sustainable Development Goals: How Companies Stack Up

Published

on

Sustainable Development Goals

The UN SDGs: How Companies Stack Up

Environmental, social, and governance (ESG) investing witnessed a breakthrough year in 2020 with the most fund inflows on record.

Importantly, for companies that are judged according to ESG metrics, one way to track their progress is through their alignment to the UN Sustainable Development Goals (SDGs).

Established in 2012, the UN SDGs are a blueprint for creating a more sustainable future by 2030 that have been adopted by 193 countries worldwide.

As investors and stakeholders pay closer attention to sustainability concerns, this graphic from MSCI breaks down how companies stack up according to their alignment to the UN SDGs.

How Were Companies Measured?

To track companies net contribution to the UN SDGs, companies were scored by their positive or negative contribution to each of the 17 goals.

The 17 UN SDGs are designed to achieve three primary objectives by 2030:

  • Protect the planet
  • End poverty
  • Create prosperity and peace for all

Specifically, the framework centers on a discussion paper that was developed in partnership with the OECD in 2018. Company policies, operations, products and services, and practices are analyzed according to reported and publicly available information.

Tracking the Alignment of Companies

Across a universe of 8,550 companies in the MSCI All Country World Index, constituents were measured from strongly aligned to strongly misaligned to the UN SDGs.

Sustainable
Development Goal
Strongly
Aligned
AlignedMisalignedStrongly
Misaligned
1No Poverty089215532
2Zero Hunger24234300
3Good Health and Well-being031514129
4Quality Education831520
5Gender Equality0109290
6Clean Water and Sanitation173253610
7Affordable and Clean Energy43639109587
8Decent Work and Economic Growth2512695217
9Industry, Innovation, and Infrastructure688441379
10Reduced Inequality082812731
11Sustainable Cities and Communities0016719
12Responsible Consumption and Production115855150598
13Climate Action2759495587
14Life Below Water03615192
15Life on Land0012817
16Peace and Justice Strong Institutions013524127
17Partnerships to Achieve the Goal040115222

Source: MSCI ESG Research LLC as of August 11, 2020

Broadly speaking, companies fell mostly in the middle—roughly 38% were aligned while almost 55% were misaligned or neutral. Meanwhile, just 0.2% of companies were strongly aligned to the UN SDGs.

Overall, one of the most strongly aligned goals was Responsible Production and Consumption, with 115 companies meeting this criteria. Specifically, these include companies that are building sustainable infrastructure, energy efficiency, or creating green jobs.

Interestingly, the worst performing goal was also Responsible Production and Consumption, with over five times as many companies (598) strongly misaligned. Along with this goal, both Climate Action and Affordable and Clean Energy each had over 500 companies strongly misaligned.

UN SDGs: A Sector Focus

Unsurprisingly, SDG-alignment varied widely according to company sectors.

Educational companies, for instance, represented the highest level of alignment to Gender Equality. Meanwhile, 18% of 425 utilities companies assessed ended up aligning with Clean and Affordable Energy goals.

As one would expect, the energy sector lagged behind. In 2020, fossil fuels were a key source of revenue for 91% of the companies in the energy business. In fact, just three companies derived over 50% of their revenues from green alternatives: REX American Resources, Renewable Energy Group, and Verbio.

A Call to Action?

Despite the growing wave of interest in ESG investing, the reality is that progress to meet the UN SDGs has been slower going than expected.

However, a greater number of individuals, stakeholders, and activists are sounding the alarm. Today, over 3,000 signatories representing trillions in assets under management have committed to the UN Principles of Responsible Investment, which has established six key actions for ESG investing. Now, many companies are required to report their ESG disclosures in Europe.

Along with these key markers of progress, investors can move the dial by tracking a company’s alignment to sustainable development goals.

Click for Comments

Green

Visualizing Global Per Capita CO2 Emissions

33.6 Gt of CO2 was emitted across the world in 2019. Here we visualize the global per capita CO2 emissions by country and region.

Published

on

Highest Per Capita CO2 Emissions

Developing countries like China, India, and Russia are some of the highest producers of CO2 worldwide and will be so for a while. But the situation is far from straightforward—and looking at CO2 emissions per capita can add nuance to the overall story.

Based on data presented by the Aqal Group and the IEA, here we visualize the countries and regions with the highest per capita carbon emissions from around the world.

Let’s dive into the highest per capita carbon emitters and how they are trying to reduce their carbon contributions.

Leaders in Per Capita CO2 Emissions

Oil-producing countries in the Middle East are the highest emitters of CO2 on a per capita basis, but developed countries like the U.S., Australia, New Zealand, and Canada also have some of the higher rates of per capita emissions.

RankCountry or RegionCarbon Emissions Per Capita (t/year)
#1Middle East A*19.5
#2Canada15.2
#3Saudi Arabia14.5
#4United States14.4
#5Australia & New Zealand13.6
#6Russia11.4
#7South Korea11.3
#8Kazakhstan & Turkmenistan11.2
#9Taiwan10.8
#10Japan8.4
Global Average4.4

*Middle East A group includes Bahrain, Oman, Kuwait, Qatar, and United Arab Emirates

Canada and the United States have per capita carbon footprints of 15.2 and 14.4 tonnes per year, respectively. Meanwhile, Australia and New Zealand combine for an average per capita footprint of over 13.6 tonnes per year.

It’s worth noting that all of these numbers are more than three times higher than the global average, which in 2019 was 4.4 tonnes per person.

Energy Sources and Per Capita CO2 Emissions

Since there is a strong relationship between wealth and per capita CO2 emissions, we’d expect countries with high living standards to have a high carbon footprint.

But the data above shows significant differences in per capita emissions, even between countries with similar living standards. Many countries across Europe, for example, have much lower emissions than the U.S., Canada, or Australia.

Here’s a look at the top 25 countries by standard of living and their share of electricity production from fossil fuels:

RankCountryPer Capita Electricity
Consumption (kWh)
% Electricity Production
(from fossil fuels)
1🇫🇮 Finland12,17415.6%
2🇩🇰 Denmark5,01521.8%
3🇳🇴 Norway26,4921.2%
4🇧🇪 Belgium7,41434.6%
5🇸🇪 Sweden16,4782.2%
6🇨🇭 Switzerland7,9351.0%
7🇳🇱 Netherlands7,26471.5%
8🇫🇷 France8,0979.5%
9🇩🇪 Germany6,77143.8%
10🇯🇵 Japan7,44669.1%
11🇬🇧 United Kingdom4,50040.7%
12🇨🇦 Canada16,64816.6%
13🇰🇷 South Korea10,45865.8%
14🇺🇸 United States12,23560.1%
15🇹🇼 Taiwan11,09182.8%
16🇦🇹 Austria7,71620.7%
17🇦🇺 Australia9,85775.1%
18🇮🇪 Ireland6,40859.3%
19🇸🇬 Singapore8,54296.7%
20🇪🇸 Spain5,64134.4%
21🇮🇹 Italy4,55456.8%
22🇨🇿 Czech Republic7,53450.7%
23🇵🇹 Portugal5,10041.2%
24🇳🇿 New Zealand8,88018.9%
25🇱🇺 Luxembourg1,52928.5%

Sources: Electricity consumption, Fossil fuel mix

The choice of energy sources plays a key role here. In the UK, Portugal, and France, a much higher share of electricity is produced from nuclear and renewable sources.

For example, only 9.5% of France’s electricity production comes from fossil fuels, compared to other developed countries like the U.S. at 60.1% and Japan at 69.1%.

G20 Countries and Carbon Emissions

This reliance on fossil fuels for energy production extends to the rest of the G20 countries. According to the Climate Transparency Report, CO2 emissions will rise by 4% across the G20 group this year, dropping 6% in 2020 due to the pandemic.

This rise is mainly due to the increase in coal consumption across these countries. Coal consumption is projected to rise by almost 5% in 2021, with this growth driven by China (accounting for 61% of the growth), the U.S. (18%), and India (17%).

Here’s a look at the current coal power capacity of each G20 country:

coal power capacity of g20 members

Coal use in China has surged, with the country experiencing increased demand for energy as the global economy has recovered. Coal prices are up nearly 200% from a year ago.

Plans to Tackle Emissions

The conclusion of the U.N. Climate Change Conference (COP26) in Glasgow saw several pledges and announcements being made by various countries. Here are some of the highlights:

  • The world’s biggest CO2 emitters, the U.S. and China, pledged to cooperate more over the next decade in areas including methane emissions and the switch to clean energy.
  • Leaders from more than 100 countries—with about 85% of the world’s forests—promised to stop deforestation by 2030.
  • More than 100 countries agreed upon a scheme to cut 30% of methane emissions by 2030.
  • Financial organizations have agreed to back renewable energy and direct finance away from fossil fuel-burning industries.

Many countries have pledged to do their part to tackle climate change. It will be an impressive display of global unity if global CO2 emissions drop significantly over the next decade.

Continue Reading

Green

Visualizing the Accumulation of Human-Made Mass on Earth

The amount of human-made (or anthropogenic) mass, has now exceeded the weight of all life on Earth, including humans, animals, and plants.

Published

on

Visualizing the Accumulation of Human-Made Mass on Earth

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

The world is not getting any bigger but the human population continues to grow, consuming more and more resources and altering the very environment we rely on.

In 2020, the amount of human-made mass, or anthropogenic mass, exceeded for the first time the dry weight (except for water and fluids) of all life on Earth, including humans, animals, plants, fungi, and even microorganisms.

In this infographic based on a study published in Nature, we break down the composition of all human-made materials and the rate of their production.

A Man-made Planet

Anthropogenic mass is defined as the mass embedded in inanimate solid objects made by humans that have not been demolished or taken out of service—which is separately defined as anthropogenic mass waste.

Over the past century or so, human-made mass has increased rapidly, doubling approximately every 20 years. The collective mass of these materials has gone from 3% of the world’s biomass in 1900 to being on par with it today.

While we often overlook the presence of raw materials, they are what make the modern economy possible. To build roads, houses, buildings, printer paper, coffee mugs, computers, and all other human-made things, it requires billions of tons of fossil fuels, metals and minerals, wood, and agricultural products.

Human-Made Mass

Every year, we extract almost 90 billion tons of raw materials from the Earth. A single smartphone, for example, can carry roughly 80% of the stable elements on the periodic table.

The rate of accumulation for anthropogenic mass has now reached 30 gigatons (Gt)—equivalent to 30 billion metric tons—per year, based on the average for the past five years. This corresponds to each person on the globe producing more than his or her body weight in anthropogenic mass every week.

At the top of the list is concrete. Used for building and infrastructure, concrete is the second most used substance in the world, after water.

Human-Made MassDescription1900 (mass/Gt)1940 (mass/Gt)1980 (mass/Gt)2020 (mass/Gt)
ConcreteUsed for building and infrastructure, including cement, gravel and sand21086549
AggregatesGravel and sand, mainly used as bedding for roads and buildings1730135386
BricksMostly composed of clay and used for constructions11162892
AsphaltBitumen, gravel and sand, used mainly for road construction/pavement 012265
MetalsMostly iron/steel, aluminum and copper131339
OtherSolid wood products, paper/paperboard, container and flat glass and plastic461123

Bricks and aggregates like gravel and sand also represent a big part of human-made mass.

Although small compared to other materials in our list, the mass of plastic we’ve made is greater than the overall mass of all terrestrial and marine animals combined.

Human-Made Mass Plastic

As the rate of growth of human-made mass continues to accelerate, it could become triple the total amount of global living biomass by 2040.

Can We Work It Out?

While the mass of humans is only about 0.01% of all biomass, our impact is like no other form of life on Earth. We are one of the few species that can alter the environment to the point of affecting all life.

At the current pace, the reserves of some materials like fossil fuels and minerals could run out in less than 100 years. As a result, prospectors are widening their search as they seek fresh sources of raw materials, exploring places like the Arctic, the deep sea, and even asteroids.

As the world population continues to increase, so does the pressure on the natural environment. It is an unavoidable fact that consumption will increase, but in an era of net-zero policies and carbon credits, accounting for the human impact on the environment will be more important than ever.

Continue Reading

Subscribe

Popular