The world is rapidly shifting to renewable energy technologies.
Battery minerals are set to become the new oil, with lithium-ion battery supply chains becoming the new pipelines.
China is currently leading this lithium-ion battery revolution—leaving the U.S. dependent on its economic rival. However, the harsh lessons of the 1970-80s oil crises have increased pressure on the U.S. to develop its own domestic energy supply chain and gain access to key battery metals.
Introducing the New Energy Era
Today’s infographic from Standard Lithium explores the current energy landscape and America’s position in the new energy era.
An Energy Dependence Problem
Energy dependence is the degree of a nation’s reliance on imported energy, resulting from an insufficient domestic supply. Oil crises in the 1970-80s revealed America’s reliance on foreign produced oil, especially from the Middle East.
The U.S. economy ground to a halt when gas prices soared during the 1973 oil crisis—altering consumer behavior and energy policy for generations. In the aftermath of the crisis, the government imposed national speed limits to conserve oil, and also demanded cheaper, smaller, and more fuel-efficient cars.
U.S. administrations set an objective to wean America off foreign oil through “energy independence”—the ability to meet the country’s fuel needs using domestic resources.
Spurred by technological breakthroughs such as hydraulic fracking, the U.S. now has the capacity to respond to high oil prices by ramping up domestic production.
By the end of 2019, total U.S. oil production could rise to 17.4 million barrels a day. At that level, American net imports of petroleum could fall in December 2019 to 320,000 barrels a day, the lowest since 1949.
In fact, the successful development of America’s shale fields is a key reason why the Organization of the Petroleum Exporting Countries (OPEC) has lost the majority of its influence over the supply and price of oil.
A Renewable Future: Turning the Ship
The increasing scarcity of economic oil and gas fields, combined with the negative environmental impacts of oil and the declining costs of renewable power, are creating a new energy supply and demand dynamic.
Oil demand could drop by 16.5 million barrels per day. Oil producers could face significant losses, with $380 billion of above-ground investments becoming worthless if the oil industry and oil-rich nations are not prepared for a surge in green energy by 2030.
Energy companies are hedging their risk with increased investment in renewables. The world’s top 24 publicly-listed oil companies spent on average 1.3% of their total budgets on low carbon technology in 2018, amounting to $260 billion. That is double the 0.68% the same group had invested on average through the period of 2010 and 2017.
The New Geopolitics of Energy: Battery Minerals
Low carbon technologies for the new energy era are also creating a demand for specific materials and new supply chains that can procure them.
Renewable and low carbon technology will be mineral intensive, requiring many metals such as lithium, cobalt, graphite and nickel. These are key raw materials, and demand will only grow.
|Material||2018||2028||2018-2028 % Growth|
|Graphite anode in Batteries||170,000 tonnes||2.05M tonnes||1,106%|
|Lithium in batteries||150,000 tonnes||1.89M tonnes||1,160%|
|Nickel in batteries||82,000 tonnes||1.09M tonnes||1,229%|
|Cobalt in batteries||58,000 tonnes||320,000 tonnes||452%|
The cost of these materials is the largest factor in battery technology, and will determine whether battery supply chains succeed or fail.
China currently dominates the lithium-ion battery supply chain, and could continue to do so. This leaves the U.S. dependent on China as we venture into this new era.
Could history repeat itself?
The Battery Metals Race
There are five stages in a lithium-ion battery supply chain—and the U.S. holds a smaller percentage of the global supply chain than China at nearly every stage.
China’s dominance of the global battery supply chain creates a competitive advantage that the U.S. has no choice but to rely on.
However, this can still be prevented if the United States moves fast. From natural resources, human capital and the technology, the U.S. can build its own domestic supply.
Building the U.S. Battery Supply Chain
The U.S. relies heavily on imports of several keys materials necessary for a lithium-ion battery supply chain.
|U.S. Net Import Dependence|
But the U.S. is making strides to secure its place in the new energy era. The American Minerals Security Act seeks to identify the resources necessary to secure America’s mineral independence.
The government has also released a list of 35 minerals it deems critical to the national interest.
Declaring U.S. Battery Independence
A supply chain starts with raw materials, and the U.S. has the resources necessary to build its own battery supply chain. This would help the country avoid supply disruptions like those seen during the oil crises in the 1970s.
Battery metals are becoming the new oil and supply chains the new pipelines. It is still early in this new energy era, and the victors are yet to be determined in the battery arms race.
The Carbon Footprint of the Food Supply Chain
According to the largest ever meta-analysis of food systems, the carbon footprint of different types of food in your diet can vary widely.
Which Foods Have the Greatest Environmental Impact?
The quantity of greenhouse gases (GHGs) generated by our food can vary considerably across the global food supply chain.
In fact, the difference between specific food types can vary by orders of magnitude, meaning what we eat could be a significant factor impacting GHG emissions on the environment.
Today’s modified chart from Our World in Data relies on data from the largest meta-analysis of food systems in history. The study, published in Science was led by Joseph Poore and Thomas Nemecek to highlight the carbon footprint across different food types across the world.
The Foods With the Highest Carbon Footprint
Worldwide, there are approximately 13.7 billion metric tons of carbon dioxide equivalents (CO2e) emitted through the food supply chain per year.
Across a database extending through 119 countries and 38,000 commercial farms, the study found that, unsurprisingly, beef and other animal products have an outsize effect on emissions.
For example, one kilogram (kg) of beef results in 60 kg of GHG emissions—nearly 2.5x the closest food type, lamb and mutton. In contrast, the same weight of apples produce less than one kilogram of GHG emissions.
|Food Type||GHG Emissions per 1 kg Produced|
|Beef (beef herd)||60 kgCO2e|
|Lamb & Mutton||24 kgCO2e|
|Beef (dairy herd)||21 kgCO2e|
|Prawns (farmed)||12 kgCO2e|
|Palm Oil||8 kgCO2e|
|Pig Meat||7 kgCO2e|
|Poultry Meat||6 kgCO2e|
|Olive Oil||6 kgCO2e|
|Fish (farmed)||5 kgCO2e|
|Fish (wild catch)||3 kgCO2e|
|Cane Sugar||3 kgCO2e|
|Wheat & Rye||1.4 kgCO2e|
|Maize (Corn)||1.0 kgCO2e|
|Root Vegetables||0.4 kgCO2e|
|Citrus Fruits||0.3 kgCO2e|
When it comes to plant-based foods, chocolate is among the highest GHG emitters. One kilogram of chocolate produces 19 kg of GHGs. On average, emissions from plant-based foods are 10 to 50 times lower than animal-based types.
Bottom line, it is clear that the spectrum of emissions differs significantly across each food type.
Food Supply Chain Stages
The food supply chain is complex and nuanced as it moves across each stage of the cycle.
Although the steps behind the supply chain for individual foods can vary considerably, each typically has seven stages:
- Land Use Change
- Animal Feed
Across all foods, the land use and farm stages of the supply chain account for 80% of GHG emissions. In beef production, for example, there are three key contributing factors to the carbon footprint at these stages: animal feed, land conversion, and methane production from cows. In the U.S., beef production accounts for 40% of total livestock-related land use domestically.
On the other end of the spectrum is transportation. This stage of the supply chain makes up 10% of total GHG emissions on average. When it comes to beef, the proportion of GHGs that transportation emits is even smaller, at just 0.5% of total emissions.
Contrary to popular belief, sourcing food locally may not help GHG emissions in a very significant way, especially in the case of foods with a large carbon footprint.
The Rise of Plant-Based Alternatives
Amid a growing market share of plant-based alternatives in markets around the world, the future of the food supply chain could undergo a significant transition.
For investors, this shift is already evident. Beyond Meat, a leading provider of meat substitutes, was one of the best performing stocks of 2019—gaining 202% after its IPO in May 2019.
As rising awareness about the environment becomes more prevalent, is it possible that growing meat consumption could be a thing of the past?
Visualizing the Global Rise of Sustainable Investing
Total assets in sustainable investing reached nearly $31 trillion in 2018. What are the driving forces behind the global rise of sustainable investing?
No matter where you look, climate change is at the centre of every conversation.
With a wide range of global sustainability challenges and complex risks on the rise, investors are starting to re-evaluate traditional portfolio approaches.
The ESG Boom
Today, many investors want their money to align with a higher purpose beyond profit. This infographic from iShares unpacks the prolific rise of sustainable investing, and how its trillion-dollar potential is sweeping across the world.
What is Sustainable Investing?
Sustainable investing considers environmental, social, and governance (ESG) factors that create a lasting, positive impact on the world. As the term ‘ESG’ suggests, its scope goes well beyond environmental concerns alone. Examples include:
- Environmental: Climate risks, resource scarcity, and clean energy
- Social: Diversity, human rights, and cybersecurity
- Governance: Business ethics, transparency, and anti-corruption
Simply put, it’s a force for good.
Although sustainable investing emerged in the 1970s, the movement has gained impressive traction in the last few years.
How Global Assets are Growing
Since 2012, total assets in sustainable investing have more than doubled:
|Region||2012 Assets||2018 Assets|
|Total||$13.3 trillion||$30.7 trillion|
|Europe||$8.8 trillion||$14.1 trillion|
|U.S.||$3.7 trillion||$12.0 trillion|
|Japan||$0.01 trillion||$2.2 trillion|
|Canada||$0.59 trillion||$1.7 trillion|
|Australia and New Zealand||$0.18 trillion||$0.7 trillion|
The U.S. and Europe are major players in this shift. In particular, specific legislation across European countries will continue driving ESG investment for years to come.
The European ESG Landscape
Across major economies in Europe, cultural shifts and new regulations are shaping the landscape of sustainable investing.
- The UK has an ambitious net-zero greenhouse gas emissions target by 2050.
Result: Most sectors will significantly ramp up their decarbonisation efforts to meet this goal.
- As per France’s Article 173 (Energy Transition Law), investors must explain how they incorporate ESG factors into their investment strategies.
Result: A majority of French institutional investors now manage their assets with ESG criteria in mind.
- Nordic countries consider sustainability and social responsibility a cornerstone of their cultural mindset.
Result: Nordic investors are increasingly integrating all three ESG aspects into their investments.
If Europe’s trajectory is any indication, sustainable investing will soon become second nature in other parts of the world too.
No Industry is Untouched
The rise of sustainable investing is a global phenomenon, and reaches a myriad of industries.
Here is a summary of just a few ESG efforts of some of the world’s most sustainable corporations:
|Chr. Hansen A/S||Bioscience||🇩🇰 Denmark||• 100% green operations commitment by Apr 2020
• 82% of revenue directly supports UN Global Goals
|Autodesk||Software||🇺🇸 U.S.||• 100% renewable energy-run cloud services and offices
• 44% women on the Board
|Banco do Brazil||Finance||🇧🇷 Brazil||• $51 billion earmarked for green economy spending
• 99% adherence to Code of Ethics and Conduct Standards
|City Developments Ltd||Real Estate||🇸🇬 Singapore||• S$100 million fully-allocated Green Bond
• 59% carbon emissions reduction target by 2030
The business world agrees: sustainable investing is smart investing.
How Can Investors Think Sustainably?
Many investment products allow investors to easily access sustainable investing, such as exchange-traded funds (ETFs) and index funds. These provide complete transparency—allowing investors to align their approach with the objectives that matter most to them.
Investors are able to:
- Screen out companies involved in controversial businesses
- Invest in companies with high ESG standards
- Advocate for specific issues like climate change
Not only this, but sustainable investing also has the potential to improve portfolio returns. In a 2015 paper covering ESG investing since the 1970s, 90% of ESG investing matched or overperformed traditional approaches.
The Bottom Line
Investors see a triple bottom line from sustainable investing: strong financial returns, and a lasting impact on both people and the planet.
As sustainable investing goes mainstream, it won’t simply act as a niche in a broader strategy—instead, it’ll be naturally integrated throughout a portfolio.
“With the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.
—Larry Fink, BlackRock Chairman and CEO
Sustainability is a global force that will continue to factor into everyday decisions.
Soon, sustainable investing will simply be considered “investing”.
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