Climate change and its consequences have been in the headlines more than ever lately, and for good reason.
It is estimated that if the average global temperature rises by 2 degrees Celsius on average over the next decade, it will result in irreversible damage to our planet and its inhabitants. Governments and their leaders have yet to respond suitably. Moreover, according to The Economist Intelligence Unit, climate change is expected to negatively impact the global economy by about 8 trillion dollars over the next 30 years. None of the world’s 82 major economies are prepared, and the business sector has only just begun to consider the issue.
The demand to find solutions to the global climate crisis affects both developed and emerging economies and requires full cooperation between businesses and their sphere of influence.
Whether the pressure for change comes from consumers, investors, or employees, there is an increasing expectation that the business sector will lead the way.
The latest report by the Environmental Defense Fund indicates that 90% of leaders of 600 large companies – those with an income of half a billion dollars or more – believe that start-ups will produce new technologies that can provide crucial answers in the field of sustainability and the environment, and excitingly, increase their return on investment at the same time.
In other words, these business leaders of established companies believe in impact investment – that is, investments that make a positive difference and are designed to create measurable improvements in society while also providing environmental and social benefits.
Businesses that choose the route of impact investments achieve two goals simultaneously: first, improving the quality of life for the communities involved, and second, receiving an attractive return on their investments. For example, the Coca-Cola Company invested in WaterHealth International (WHI) in an effort to bring safe drinking water to 1 million school-children through its ‘Child With Water’ (CWW) program. Similarly, Dow’s 2025 Sustainability Goals program is based on another impact model in water sustainability, aiming to offer solutions that close the resource loops in key markets. In this case, the solution introduces recycled water: a circular economy, creating a community in which water is a well-managed resource, sustained by advances in science and technology.