Sustainability - statistics & facts
Since the Industrial Revolution began, human development has mainly come at the expense of the environment. Rising temperatures, extreme weather events, and supply chain disruptions are some of the challenges arising from the overexploitation of natural resources. To counter these threats, many are pinning their hopes on sustainable solutions to adapt global and local processes that are detrimental to the environment and human survival.
To aid in long-term investments in sustainable projects and support the shift to a low-carbon economy, various financial instruments have been introduced in recent years. One such instrument is green bonds, which fund climate and environmental projects. In 2023, green bonds issued worldwide amounted to more than 600 billion U.S. dollars, a 13-fold increase in comparison to a decade earlier. Green bonds are part of a larger category of sustainable or “impact” investing, also known as environmental, social, and governance (ESG) investing. In contrast to green bonds, ESG funds include a much wider range of projects, from affordable housing and improved infrastructure projects, to improving working conditions and gender equality. Returns on sustainable funds have consistently outperformed traditional funds in the past five years.
The three pillars of sustainability
While the concept of sustainability is not new, it gained prominence after the United Nations' Brundtland Commission in 1987. According to the Brundtland report, sustainability was defined as "meeting the needs of the present without compromising the ability of future generations to meet their own needs". Conceptually represented under three pillars - environmental protection, economic development, and social development – the term ‘sustainability’ has since been broadly intertwined with human processes and actions to avoid natural resource depletion and maintain ecological balance without hindering the quality of life.Putting sustainability into practice
Climate change is undoubtedly the largest crisis faced by humankind. As such, the replacement of fossil fuels with renewable energy sources has become one of the most relevant sustainability trends of the 21st century. Global renewable energy capacity stood at 3.8 terawatts in 2023, more than triple the capacity in 2010. Nevertheless, forecasts show this figure will need to triple again by 2030, for a chance to limit global warming to 1.5 degrees Celsius above pre-industrial levels. Likewise, other clean energy technologies – such as electric vehicles, carbon capture and storage (CCS), and battery storage – are also expected to grow significantly in the coming years. Overall, investments in energy transition technologies surpassed 1.7 trillion U.S. dollars in 2023, growing 17 percent year-over-year.To aid in long-term investments in sustainable projects and support the shift to a low-carbon economy, various financial instruments have been introduced in recent years. One such instrument is green bonds, which fund climate and environmental projects. In 2023, green bonds issued worldwide amounted to more than 600 billion U.S. dollars, a 13-fold increase in comparison to a decade earlier. Green bonds are part of a larger category of sustainable or “impact” investing, also known as environmental, social, and governance (ESG) investing. In contrast to green bonds, ESG funds include a much wider range of projects, from affordable housing and improved infrastructure projects, to improving working conditions and gender equality. Returns on sustainable funds have consistently outperformed traditional funds in the past five years.
