Economic Growth Without Environmental Impact

Decoupling, in eco-environmental terms, can be defined as economic growth without creating corresponding environmental impacts.

Nations, industries, and corporations will still reach their full potential and economic growth; and perhaps achieve even greater success, by following sustainable practices.

Economic growth can be achieved while simultaneously lowering a company's carbon footprint and striving for a sustainable environment. 

There is no guarantee that any nation, industry, or corporation, will be "completely sustainable” from one year to the next, especially given the fact that all resources will continue to depreciate, at least minimally. However, with the increased investment in, innovation of, and use of renewable energy, energy efficiency, other sustainability technologies (i.e. batteries for energy storage, electric vehicles), and decreased waste/ better waste management; the chance to achieve sustainability becomes more and more likely over time.

The economy depends on natural resources from land, to water, to metal, to energy. There is a need to consider the depletion of these resources, and adjust investments; even with the concurrent need for an increase in gross domestic product (GDP) and profit. When the profit of the nation, industry, or corporation, is the greater consideration than the natural resources required for economic gain, there is very little likelihood of environmental sustainability.

It's possible to have a vision of a company making a profit while maintaining environmental sustainability goals. In first-world countries, it's possible to at least consider minimizing the need for the growth of GDP.

However, smaller third-world countries face a much larger need for GDP rise in order to improve the quality of life for the population; an increase in GDP that many developing countries still see as coupled with fossil fuel use. In looking at industrialized nations, historically, economic growth and increased quality of life have been tied to the increased use of fossil fuels.

Eco-environmental decoupling, where economic growth occurs without an increase in environmental costs or demands, should be a common practice for all industries and corporations in the developed world today. Additionally, many developing nations across the world today have increased their financial status, even with the decoupling of some basic natural resources; such as oil.

Economic growth is beneficial and necessary for both industrialized and developing nations; as modernization (of cities, national infrastructure, vital services, etc...) significantly improves the quality of people's lives. Unfortunately, most global economic growth historically has only been possible with the exploitation of natural resources; land (as in the exploitation of forests and wilderness), water (e.g. oceans, rivers, lakes), and especially fossil fuels (gas, coal, and oil for energy, oil/ petrochemicals for manufacturing).

Today, this exploitation of natural resources is no longer necessary to achieve growth. Sustainable technologies are abundant, efficient, and affordable (such as renewable energy, energy efficiency technologies, sustainable mass transit, electric vehicles, etc...). The global sustainability movement best represents the current global modernization movement; as evidenced by increased global investment in, and increased innovation of, clean energy technologies.

Divestment

The standard definition of divestment is a reduction of some kind of investment in an asset for financial, ethical, or political objectives. The global divestment movement, in eco-environmental terms, refers to companies (as well as other private and public entities) pulling their support and capital investments from fossil fuel companies.

The global divestment movement has been going strong for several years. Here are some major stories of the sustainability divestment movement from 2018, a year where the global divestment movement really picked up steam- cleantechnica.com/cleantechnica-divestment-year-in-review-2018.

Here's a quote from the Cleantechnica article: "From school children to individuals, companies, and corporations, the global fossil fuel divestment movement has challenged the right of the fossil fuel industry to damage the environment. By divesting from fossil fuels, we are requiring polluters to take responsibility for their products..."

Environmental, social, and governance (ESG) goals are being adopted by many companies worldwide. These ESG goals go hand-in-hand with divestment goals, 100% clean energy goals, and company-wide net zero goals. ESG goals for investments can be viewed as similar to divestment goals, as ESG goals represent the most important metrics in evaluating a company's overall sustainability.

The field of ESG investments is gaining popularity internationally (to about $1 trillion worth of ESG investments internationally by the fall of 2020), and includes ESG bonds (a.k.a. "green bonds") and mutual funds. Major corporations that are divesting, aiming to reach ESG goals, ambitious 100% clean and renewable energy goals, and net zero goals, include: Apple, Google, Amazon, Starbucks, and even Walmart.

Read more about Amazon's clean energy goals here: Amazon's Renewable Energy Projects

Even some oil majors, giant corporations leading the international oil & gas industry, like British Petroleum (BP), Royal Dutch Shell, and Total SA, are adopting company-wide ESG and net zero targets. Are these oil giants taking carbon neutrality seriously as a response to the global divestment movement? As a response to major emitting countries setting net zero goals?

BP, Shell, and Total all have net zero targets of 2050, mirroring net zero targets of the EU, the UK, many European nations individually, and many other nations worldwide (and now the US president, President Biden, has also pledged the US will reach net zero emissions by 2050). In addition to BP and Shell, Total has a stand-out net zero pledge in the field of oil majors embracing sustainable targets -

 “Like BP and Shell, Total promised zero out the emissions associated with its own business operations by switching to renewable energy and offsetting any remaining emissions. But Total has also gone a step further, vowing that all of its energy products used by customers in Europe will be carbon-neutral by 2050 — and that it will cut the emissions of products used worldwide by 60%.

It’s not clear yet how Total plans to radically clean up its business model, but it does have a head start: The company already has stakes in 3 gigawatts of renewable energy and plans to increase it to 25 gigawatts over the next five years.”  FROM -  grist.org/beacon/a-total-makeover

Also, major big oil/ gas companies are divesting from fossil fuels, or just becoming “energy” companies – like Statoil >>> Equinor. As of the end of 2020, Equinor also pledged to reach net-zero emissions by 2050; in its ambition to re-brand itself as a "broad energy company" -

“The world is changing, and so is Statoil. The biggest transition our modern-day energy systems have ever seen is underway, and we aim to be at the forefront of this development. Our strategy remains firm. The name Equinor reflects ongoing changes and supports the always safe, high value and low carbon strategy we outlined last year,”  FROM  -  equinor.com/en/news/15mar2018

The European Investment Bank (EIB), the world's largest public investment bank, is also phasing out its investments in fossil fuel companies.

According to Reuters, "...the new policy [EIB to cease funding fossil fuel projects by end-2021] does not outright ban all fossil fuel projects, but makes most of them impossible under the new parameters.

Under the new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt-hour of energy while emitting less than 250 grams of carbon dioxide, a move which bans traditional gas-burning power plants. Gas projects are still possible, but would have to be based on what the bank called 'new technologies,' such as carbon capture and storage, combining heat and power generation, or mixing in renewable gases with the fossil natural gas.” 

Climate activists celebrated the [2019] decision of the EIB to stop funding most oil and coal projects by 2021, part of a bid to be the world's first "climate bank"...

...In a statement following the news, Friends of the Earth Europe fossil free campaigner Colin Roche said the bank's decision was a big one.

"Today's decision is a significant victory for the climate movement," said Roche. "Finally, the world's largest public bank has bowed to public pressure and recognised that funding for all fossil fuels must end—and now all other banks, public and private must follow their lead." FROM -  salon.com/worlds-largest-public-bank-ditches-oil-and-coal

For an up-to-date list of banks ranked on various divestment goals (divestment from coal, divestment from oil & gas. For example, PNB Paribas, a French international investment bank and the world's 8th largest public investment bank, has only divested from coal; while some other banks on this chart have banned some coal and oil projects...not gas), please see>

ran.org/bankingonclimatechange/#grades-panel 

Perhaps one of the biggest, most pleasant, surprises in the ESG/ divestment movement, came with BlackRock's decision to begin divesting. BlackRock is the world's largest asset manager, managing investments worth over $8 trillion. This announcement came in 2020 after a wave of divestment announcements from major banks, including EIB.

In looking at BlackRock's divestment announcement, the Washington Post posited this summary of the divestment movement by big banks in 2019-2020:

“BlackRock isn't the only big financial institution that has halted its lending to fossil-fuel projects in recent years. A number of big banks have taken steps to reduce their exposure to fossil-fuel projects.

JPMorgan Chase, Wells Fargo and Citigroup have announced they would curb lending to Arctic oil and gas drilling projects, among other environmental pledges.

The latest wave of climate pledges by big banks was kicked off before the pandemic by Goldman Sachs, which decided in December it would no longer lend money to oil and gas projects in the fast-warming Arctic region.

The investment banking giant was followed a month later by BlackRock, which said it would limit its investment in the coal power business and make managing for sustainability and climate risk a key part of its investing strategy."  FROM -  washingtonpost.com/powerpost/the-energy-202

Sustainability and economic growth can be combined when actions are taken carefully, with resources and raw materials managed efficiently. With the global sustainability movement, nations, industries, and corporations, are able to develop economically while still reducing their carbon footprint.

With requirements for decoupling, ESG investing including divestment strategies, and net zero targets, is slowly coming into place. Global industries are now competing to incorporate renewable energy into their economic growth. The renewable energy industry will continue to grow, and help all industries commit to a long-term move toward sustainability.

See Also: gofossilfree.org/divestment/what-is-fossil-fuel-divestment

Additionally: sustainabledevelopment.un.org