By focusing on companies with proven business models and concrete plans, it is possible to deliberately harness these benefits while committing to the health of our planet.
Many records were broken this summer, and not only at the Paris Olympic Games. On July 21, the Earth’s average surface temperature reached 17.09°C, setting the record for the hottest day since records began by Copernicus, the EU’s satellite observation program. . And a new record of 17.15°C was even recorded the next day.
The rising temperature of our planet is just one of the many aspects of the climate emergency we face. Researchers at the Stockholm Resilience Center have developed the concept of “planetary boundaries” which define the environmental conditions in which humanity can continue to develop, taking into account nine biophysical dimensions ensuring the stability of our ecosystem. These dimensions include climate change, biosphere integrity, ocean acidification, ozone layer depletion, chemical pollution, land use change, fresh water use, atmospheric aerosol load and biogeochemical cycles.
Critical limits exceeded
The stability of these nine dimensions is vital to protect our fragile habitat and ensure the survival of humankind. A quantitative threshold has been defined for each limit, representing a “safe operating space” where our activities can modify natural processes without risking serious or irreversible alterations to the environment.
By 2023, six of these nine limits had already been exceeded. The Earth is therefore largely outside the safe zone for humanity. The last three dimensions, notably ocean acidification, are about to reach their limit, while the atmospheric aerosol load has already been exceeded in some regions.
The planet urgently needs innovative solutions to meet these climate challenges. Options exist, but they must be scaled to maximize their impact on restoring Earth’s balance.
The role of private equity
Private equity can play a decisive role in this acceleration. More than $90 billion in assets are managed by climate-focused private equity funds; an amount which has seen a sharp increase over the past three years.
In addition to universities and large multinationals, many private companies are pioneers of green innovation. The opportunities are vast, ranging from Californian companies transforming atmospheric CO2 into sustainable fuel, to European SMEs manufacturing magnets for electric vehicles.
Protection against disruption
Investing in these solutions offers investors financial benefits beyond their environmental impact. They benefit from socio-economic tailwinds such as growing demand for energy efficiency and political pressure for environmental measures. By focusing on companies with proven business models and concrete plans, rather than speculative technologies, it is possible to deliberately exploit these benefits while committing to the health of our planet.
