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Sustainability: a $2 trillion market

Profile Profile • April 20, 2021

There is an enormous potential for business opportunities in a scenario of reducing carbon emissions. 

In June 2019, a group of 88 investors with nearly $10 trillion in assets publicly called for more transparency on environmental impact data from 707 companies based in 46 countries.

With a joint market value of more than $15 trillion the group includes from large fossil fuel companies such as BP, Chevron to online retail giants Alibaba and Amazon. The appeal requires standardized dissemination on global carbon emissions dissemination network platform.

It's not an isolated movement. today more than 1,700 asset managers totaling $80 trillion have already incorporated environmental impact data into their investment analysis. Among them is the world's largest asset manager, The American Black Rock. The pressure for transparency come from the financial market, consumers and even employees. In the case of Amazon, in an unprecedented effort, more than 6,000 employees signed an open letter to world founder and President Jeff Bezos in April 2019. In it, they call for the release of a robust and immeasurable emissions reduction climate plan for the company whose market value is around $1 trillion.

This is a movement that not only impose challenges for companies. New business opportunities in products of around $2.1 trillion are estimated.

The world's largest listed stock companies anticipate climate risks of about a trillion dollars, much of it over the next five years. On the one hand there are risks associated with physical impacts: storms, floods, droughts, and forest fires, which affect production, distribution, and sales costs. On the other, there are regulatory risks associated with the transition to a low-carbon economy. Of this amount of $1 trillion reported, about $500 billion is classified as virtually certain, and linked to legal and policy changes.

For the oil and gas sector, there is a risk of estimated losses of $250 billion per devaluation associated with unrecoverable assets, which are fossil fuel reserves that must remain untouched to meet the goals of the Paris Agreement.

The financial services industry is also on the front line. There is an increasing pressure for more transparency on investments that will force institutions to focus more on green energy and innovation and less on polluting sources.

An economy that operates within planetary boundaries

By Profile Profile • April 20, 2021
In general, there are opportunities linked to increased demand for low emission products and services and low environmental impact such as electric vehicles in the transportation sector or even plant-based burgers in the food segment. On average the potential value of climate-related opportunities is almost 7 times the cost of achieving them. The biggest opportunities are in the supply chain. For example, Walmart, one of the world's largest retailers, has an ambitious policy to reduce greenhouse gas (GHG) emissions from its global value chain by 1 trillion tons by 2030. All suppliers of French cosmetics manufacturer L'Oréal need to have an emissions reduction target. More recently, the American fast food chain Burger King has incorporated into the menu the vegetable burger of American food tech Impossible Foods giving scale to the product. About 125 of the world's largest purchasing companies, which focus $3.6 trillion on purchasing power have the potential to encourage significant environmental changes in their supply chains. Time is scarce in the face of such challenges and it takes a lot of time thinking about great institutional solutions to the transition, when there is, however, a great movement in the private sector and investments in this sense. Every city in the world has some ecosystem of tech hubs where geeks and entrepreneurs gather and where innovative startups arise. In a short time, it will be no different with the sustainability green hubs. Climate change billionaires will emerge. Evolutia Capital is bringing together people who have genuine solutions with investor companies interested in the changes. In the United States and Europe, companies refer certain issues relating to minority engagement and female empowerment through purchasing policies. New products and disruptive business are emerging in the four corners of the world to boost this movement. We seek for these kinds of disruptive businesses and innovative projects in any industry for investment (equity) and to connect them to other investors, ensuring they have the resources required to gain a successful scale, in same way that happened in the digital technology industry.
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