Investment Strategies

 

Global Footprint Network (Published in June 2012) 

 

Demands on our planet’s natural resources are increasing: they have begun to exceed the Earth’s regenerative capacity. The results of this ecological overshoot include not only climate change, water shortages, and other environmental effects, but also threats to industrial supply chains and soaring and volatile commodity prices resulting from a demand-supply imbalance.

 

Investments and budget decisions shape how we are constructing our future. Poor investment choices can lock a city, a country or a business into an ecologically (and economically) risky business-as-usual scenario. Good choices will build the foundation for prosperity: by building assets that will gain value in a resource constrained world.

 

• Educational delays – getting the right skills in place can easily take ten years.
• Innovation cycles – from idea to market – can span years or decades.
• Hard assets – transportation systems, power plants and dams, housing, water systems, industrial plants, heavy machinery, urban expansions – may last over 50 years.

Ecological Footprint assessments provide investors and companies with critical information for making sound investment decisions. They provide businesses and public investors with strategic insights into which types of assets to invest, which sectors to encourage, and what kind of markets to get out of.

 

In spite of rapid technological advances, the troubling trend toward ever-greater ecological overshoot shows no signs of changing.  Even moderate projections of UN agencies suggest that humanity will be using more than twice the planet’s regenerative capacity by 2050 (red line in Figure 1).[1] Reaching this level of overshoot will lead to serious disruptions in supply chains and stiff competition for resources. That’s the context for investors.

 

 

Today’s investment decisions will shape our fate for decades to come. Infrastructure choices determine future resource use; today’s reputation, innovation and product-development decisions determine how well you will be able to navigate future ecological constraints.

 

Ecological Footprint accounts describe global, national, or sectoral demand trends, all in the context of global or national biocapacity trends. Such assessments help discern supply risks, forces that could shift markets, and requirements for new technology.

 

The strategists who use the most pertinent information for effective decision-making will be able to take advantage of human ingenuity, and will win in this new resource reality.

 

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