Visualized: The Power of a Sustainable Investment Dollar
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Visualized: The Power of a Sustainable Investment Dollar

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Sustainable Investment

Visualizing the Power of a Sustainable Investment Dollar

Sustainable investments are booming.

Between January and November 2020 alone, investments in sustainable ETF and mutual funds grew 96%. The UN Principles of Responsible Investment now has over 3,000 signatories representing over $100 trillion in assets. The U.S. Commodity Futures Trading Commission established a Climate Risk Unit to analyze climate risk across derivative markets, and as of March 2021, new sustainability disclosures have come into effect in Europe.

But how do we know if sustainable investments have made a difference?

To answer this question, the above infographic from MSCI examines the effect of a sustainable investment dollar by looking at real-world examples.

A Sustainable vs. Unsustainable Dollar

To start, investing legend Benjamin Graham has compared the stock market to a “voting machine.” Just as consumers vote with their purchasing decisions, investors vote with their investment dollars. Especially in the short term, as more dollars flow to sustainable companies, this builds their exposure and access to capital.

In the long term, meanwhile, the market can be compared to a weighing machine. The market recognizes companies with profitable business models that improve their intrinsic value over time. Ultimately, this allows sustainable companies to expand and continue operating.

Given the rising momentum in both green assets and climate targets, here is how investment dollars have influenced and driven change across three industries.

1. Clean Energy vs. Fossil Fuel

Over the last several years, the energy sector has been associated with many of the problems causing climate change. For this reason, many investors are seeking out greener energy alternatives. But how does moving investment dollars from an ESG laggard to an ESG leader support the environment and society?

First, here is a brief explainer of ESG laggards and leaders:

  • ESG laggards: companies with the weakest environmental, social, and governance (ESG) performance in their sector.
  • ESG leaders: companies with the strongest environmental, social, and governance (ESG) performance in their sector.
Industry laggard: U.S. oil & gas companyIndustry leader: U.S. utilities company
Scale of carbon-intensive business lines equal to 73% of its operation47% lower CO2 emissions than the industry average
This is the equivalent of adding 26 million cars on the road annuallyThis is the equivalent of removing 9.9 million cars off the road annually
1 of 20 oil and gas companies are responsible for contributing to one third of GHG emissions since 1965Uses 3X as many renewable sources than industry average
3X fewer jobs are created vs. energy efficient sector, resulting in lower productivityThis is roughly the same as saving over 9 million pounds of coal burned
MSCI ESG Rating: CCCMSCI ESG Rating: AAA

Source: MSCI ESG Research

Based on the above example, investors have the ability to finance powerful green initiatives that reduce emissions by almost half, relative to their peers.

2. Safe vs. Unsafe Working Conditions

Weak safety protocols are a key sustainability issue for the industrial sector. Here’s how two companies compare:

Industry laggard: South African mining companyIndustry leader: U.S. mining company
11 fatalities in 2019Zero fatalities in 2019
Faced lawsuits from miners surrounding lung diseases contracted from dust exposure in gold mines
Settlement cost: $350 million
Board-level oversight monitors health and safety performance
Lags behind peers in high incident ratesLeads peers in low incident rates
Lags behind peers in setting incident reduction targetsLeads industry in lost time incident rate & total recordable injury rate
MSCI ESG Rating: CCCMSCI ESG Rating: A

Source: MSCI ESG Research

Despite the risks involved in the sector, investors can choose to support companies that take greater precautions to protect their workers.

3. Building Trust vs. Losing Trust

Over the last several years, the financial sector has faced increased scrutiny over fraudulent activities. Moving investment dollars from an ESG laggard to ESG leader may make a difference:

Industry laggard: U.S. bankIndustry leader: Dutch bank
$3 billion settlement in creating fictitious accounts to meet aggressive sales targetsSustainable finance portfolio valued at over $20 billion
Drop in top-tier bank ratings13% annual increase in climate finance
Board effectiveness questionedIncludes over 60 green loans, mobilizing environmentally friendly projects
Resignation of board membersOver 55% of board is female
MSCI ESG Rating: CCCMSCI ESG Rating: A

Source: MSCI ESG Research

From board diversity to green loans, a sustainable investment dollar supports companies that are actively advancing society and the environment.

Sustainable Investment: The Time to Act

Recently, investor dollars and shareholder activism have been closely linked.

Between 2018 and 2020, large institutional investors filed 217 shareholder proposals on climate change alone, putting increased pressure on companies. Meanwhile, 270 proposals were filed on corporate political activity and 228 on fair labor and equal employment opportunity over the same timeframe. Across all ESG proposals, $2 trillion in assets were pushing for more equitable corporate action.

Through the power of a dollar, investors can send a clear signal to companies: the time for sustainable investing is now.

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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.

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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.

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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.

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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.

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