Discover more from ESG on a Sunday
Week 50: Goodbye 2022. What a year it hasn't been 😞
In this issue: ▸ An Adagio for 2022 ▸ We talk and talk and talk ▸ Beyond what our systems can deal with ▸ We need to unleash wild new possibilities ▸ Thank you for your support! ▸ And much more...
An Adagio for 2022. Year 2022 will be thrown out soon. Bow-headed, shaken, beaten, tired. Some of the limbs are still functional but the movement forward is more like an attempt of will than a genuine effort to move forward. Two more weeks in a zombie-like state.
War in Europe. Global climate emergency more evident than ever before. An economic crisis shattering the livelihoods of people around the world. Millions more impoverished and hungry. Democracies around the world under strain. Authoritarian regimes on the rise.
A 180 degree turn in one year. Back to basics. Energy security, food security, more guns, more controls, more protectionism. Keep the engines running, or else. Survive. Volatility multiplied with fear, served as a cold main dish.
Am trying to be positive here. The US is fighting Europe on climate subsidies, China is fighting everybody on semi-conductors, India does more and more coal. Oil production and prospecting is up. CO2 emissions are up too.
Nuclear is back, but no one knows when.
We talk and talk and talk
Weapon companies are for some in Europe nowadays a “sustainable” investment. Only 12 companies out of more than 18,700 worldwide merited a “Triple A” score for their environmental disclosures in 2022. Last year it was 14 companies.
And we talk and talk and talk, not least about a “sustainable transition”. What a farce. China still looks scary, very scary. ESG got a proper and deserved beating in round 4 out of 12 in its boxing match with capitalism. 8 more rounds to go. It is a big step forward for ESG regardless of how people see it. ESG is in the ring. Was never there before. European asset managers blame regulatory confusion for downgrade of ESG funds, misunderstood they are, because they really want to change the world and those reckless regulators are destroying all of it!
Senior Democratic senators have written to the head of the United Nations warning that public trust in global negotiations on climate action is at risk because of the scale of corporate lobbying – and new controls are needed. The highly unusual step comes a month after it was revealed that more than 630 fossil fuel lobbyists attended the 27th annual climate summit, COP27, in Sharm el-Sheikh, Egypt.
A complete ESG circus with trapeze and exotic magic crystal balls in semi-dark rooms where your dreams and fears freeze when you hear the voice “I can see you...” Marvellous. Engaging. Years do not matter anymore, maybe they never did. Decades do.
Beyond what our systems can deal with
This one is most likely the most challenging one since the asymmetry of the severe problems we are facing goes beyond the current institutional capacity of our economic and political systems. They are simply out of order. We are turning inwards, we are reversing our goals, abandoning our commitments (look at Sweden!). We are simply getting more scared.
The very foundations of our societies are shifting so quickly that we have difficulties to comprehend what is really going on. Rich people, according to the latest global Human Development Report from UN, do not value democracy so much and do not think that increased political violence is such a big problem (page 164). As long as they are protected from that violence, I guess. But, as we know from history, that can change very quickly.
We talk about failed states, but what we are witnessing looks more and more like a failed civilisation. It is brutal, it is cold and it is not pleasant. I know, we need to see all the good things. There is light in the dark too. I know. I know.
We need to unleash wild new possibilities
The post-truth era, the culmination of centuries of soulless hyper-logic is happening right here right now. Either we witness the rebirth of wonder, or we succumb to the politics of meaningless repetitions. To steer clear of our doom we must give birth to brazen new forms, dream up bold new ideas, unleash wild new possibilities. Anything less means getting crushed beneath the weight of everything that has brought us to this zombie state.
We need more disruption. We need more disruption of current economic, technologic, political, cultural and social systems if we are going to change this. Fewer zombie ESG investors and zombie ESG investments and more, far more, disruptive business models, approaches, measurements and strategies.
We need ESG investments where they can make a real difference, in Africa, in South America, in Asia, in small and mid-caps, in solutions that challenge orthodox (and obviously malfunctioning) ESG approaches. We need to go beyond meaningless ESG ratings and even more meaningless ESG investments into an uncharted territory of real value creation in the businesses we are investing in. We need new receipts for prosperity, for well-being, for fulfilment. New measurements for success.
We can do this, we have done it before and we can do it again. Courage, cooperation and localisation is probably what will be needed more than ever before.
In this decade, in only a few years, hundreds of millions of people around the world will be annihilated by failing climate security, failing economic and political systems. They will form a non-negotiable mass looking for blood. History repeating itself.
We can see glimpses of this horrific scenario playing out already today in many places around the world. But we still have a choice to prevent this. We simply have to. It is on our watch, it is our time on this planet.
(If you wonder if, when, where and how massive societal collapses have happened before, well, then one example out of many is the Roman Empire. I recommend you read Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. You can find it here.)
Thank you for your support!
To all of the almost 30,000 readers of this newsletter, thank you for your support, engagement and time. Thank you for all your comments and suggestions. It is a great privilege to bother you every Sunday!
I wish you all happy holidays and a great New Year! Or shall we say a great and disruptive next decade!
This newsletter will be back on the 8th of January 2023.
PS: There are always tiny glimpses of light even in the darkest nights. Disruptive light, some of it is here:
The sea salt battery. ‘A significant breakthrough’. Your electronics could soon be powered by an ultra-cheap sea salt battery. Researchers have built a new cheap battery with four times the energy storage capacity of lithium. Constructed from sodium-sulphur – a type of molten salt that can be processed from sea water – the battery is low-cost and more environmentally friendly than existing options. This is a great thing and a very positive one.
Universities say ‘no’ to fossil fuels. Three more UK universities have banned fossil fuel companies from recruiting on campus. Career services at the University of Bedfordshire, University of the Arts London and Wrexham Glyndwr University have promised to end all relationships with oil, gas, and mining recruiters. The ban – a product of a passionate student-led campaign – comes three months after a similar move by Birkbeck, University of London.
Renewables surpass coal in the US. Renewable energy is on track to produce more energy than coal in the US this year. According to figures from the US Energy Information Administration (EIA), more than a fifth of all electricity by the end of 2022 will come from hydropower, wind and solar. That is higher than coal at 20 per cent and nuclear at 19 per cent. The only other year this happened was 2020 when energy generation was reduced due to the COVID-19 pandemic.
You can find more disruptive, positive stories here.