The biggest unrecognized financial risk in all global markets is science denial, according to the new Transitioning to Science-Based Investing report from Ethical Markets. In order to combat that risk, the authors urge financial advisors and asset managers, as well as private investors, to shift their attention from an “outdated” focus on short-term monetary rewards to investing based on an understanding of Earth systems science.
The report shows an upward trend in private “green” investments worldwide, and claims these investments equal a cumulative $10.387 trillion as of 2019. The top sector for investment is renewable energy ( at $4.4 trillion), followed by energy efficiency ($2.2 trillion), life systems ($1.9 trillion), green construction ($1.3 trillion) and corporate green research and development ($5.8 billion). The authors believe that continuing these investments could create new wealth over the next decade, and that “we already have the technologies to solve food, water and climate challenges.”
“Although we still have a long way to go,” writes Tim Nash, one of the report’s authors, in Corporate Knights, “…the green economy is already here and now, to the tune of $10 trillion over the last decade.”
He adds, “For a long time, the knock on green sectors was that they weren’t economically competitive without subsidies. Now they’re competing despite a political shift toward populism that is not exactly friendly to the environment.”