1) Fundamentals of Sustainability

What is a megatrend?

Large-scale global changes creating environmental, social & economic pressures that make the transition to sustainability necessary

What are the 7 megatrends?

1. Climate change

2. Population growth

3. Growing middle class

4. Urbanisation

5. Pivot to Asia-Pacific market

6. Resource scarcity

7. Biodiversity loss

Explain the megatrend - Climate Change

Long-term shift in global/regional climate patterns, primarily driven by human GHG emissions (fossil fuels), land use change and industry

Warming + extreme weather = physical & transitional risks

Explain the megatrend - Population/Demographics

Population continues to grow at a slower rate

Increased demand for food, water, energy & services

Explain the megatrend - Rise of Global Middle Class

Economic development is expanding global middle class (particularly Asia)

Increased consumption + new markets = increased resource demand

Explain the megatrend - Urbanisation

Over half of the world lives in cities & urbanisation is accelerating (particularly Asia/Africa)

Growing cities = infrastructure/resource pressures + ops for efficient solutions

Explain the megatrend - Pivot to Asia-Pacific Market

Economic power, markets & supply chains are shifting towards Asia-Pacific.

Shift towards a region in the middle of intense industrialisation and urbanisation (building roads, buildings and electrical grids uses intense resources)

Explain the megatrend - Resource Scarcity

Population growth, rising consumption & economic development increases risk on finite natural resources

Pressure on water, land, energy & minerals = costs/supply risks

Explain the megatrend - Biodiversity Loss

Biodiversity decline due to land use change, overexploitation, pollution, invasive species, climate change

Weakens ecosystem services & therefore economic resilience

What is “Sustainable Development” and what must be considered?

Meetings the needs of the present without compromising future generations ability to meet their own needs (Brundtland definition)

Triple bottom line must be considered - social, environmental, economic. Long term development must consider all three together.

What are the Sustainable Development Goals?

17 global goals - translate sustainable development into shared priorities, targets & indicators for action by 2030

They set priorities - guide policy/strategy - encourage action/collaboration - measure progress - create accountability

Provided a common framework & language for sustainable development

What is meant by Sustainable Capital?

Managing/building long-term assets (not depleting) so economic, social and environmental well-being continues into the future

What is the “5 Sustainable Capitals Model”

A framework for measuring sustainability and long-term value creation

Core principle = A sustainable organisation maintains/enhances all 5 capitals & recognises they are interdependent.

1. Natural - nature/resources

2. Human - people/skills/health

3. Social - relationships/trust/institutions

4. Manufactured - physical assets/infrastructure

5. Financial - money/investment

What are the 2 sides to sustainable economic development?

1. Environmental limits (planetary boundary concept) - The economy cannot indefinitely grow by depleting natural systems/resources it depends on

2. Equality - Growth is not sustainable if people are excluded or bear its costs

Why are environmental limits fundamental to economic growth & sustainable capital?

Exceeding environmental limits = effects resources, ecosystem services, stability = effects long term economic growth & capitals

Exceeding limits can:

• Deplete natural capital

• Damage manufactured capital (extreme weather damages buildings/infrastrcuture)

• Reduce human capital (effects health/productivity)

• Weaken social capital (inequality, displacement)

• Reduce financial capital (higher cost, supply/investment risk, asset losses)

What is the Inequalities Agenda?

Policies/actions aimed at reducing inequalities and ensuring fair access to opportunities, resources and participation in society

Why is equality fundamental to economic growth?

• Increases workforce participation/productivity

• Increases innovation

• Supports consumer demand

• Increases social stability

Why is equality fundamental to sustainable capital?

• Human - equal access (health, education) improves skills/capabilities

• Social - equality makes stronger communities

• Financial - equality increases participation and employment which supports economic activity/investment

• Manufactured - Fair access (housing, transport etc) allows more participation

• Natural - Environmental benefits/burdens should be equally distributed

How do environmental limits link to the equalities agenda?

What is the Just Transition

Poorly managed environmental action can create inequalities

Just Transition framework = moving towards a sustainable economy in a fair/inclusive way

For example…

• Supporting workers affected by decline of high-carbon industries

• Protecting lower income/vulnerable communities from climate impacts/transition costs

What are some unintended consequences of economic activity?

Environmental/social costs of economic activity are not reflected in market price

Environmental - Resource depltetion, GHGs, pollution, waste, biodiversity loss, water/land degradation

Social - Poor work conditions, health impacts, inequality, displacement

Impacts occur locally or globally