Climate change is getting more serious, but not all hope is lost

PSA (with foghorn): Climate change isn’t going anywhere. It’s actually getting more serious by the minute. Climate scientists and activists have been telling anyone who will listen for decades now that we’re essentially turning our planet into a Crockpot. Enterprise even joined the chorus of voices last year, with an issue dedicated to the phenomenon, and we’re back now with another edition to further drive the point home. Keep in mind that climate change doesn’t only consist of global warming: It’s a series of interrelated environmental issues, including rising water levels, extreme weather conditions (like aggressive hurricanes), and changes to wildlife populations and different ecosystems.

When even Europe is complaining about the heat, you know something is very wrong. July 2019 was both the hottest July and the hottest month on record, Time tells us, with progressively rising temperatures almost entirely due to climate change. The heatwave that hit France, Belgium, the Netherlands, and Britain was up to 3°C hotter than it would otherwise have been, due to climate change caused by humans, according to the AFP.

The planet’s diverse ecosystems and non-human inhabitants will be severely impacted: We’re facing a wave of mass extinctions, and could be on the brink of the sixth mass extinction ever to take place in all of human history, according to a landmark UN report. Human activity has increased the likelihood of these extinctions by a factor of 1,000, and now around 1 mn plant and animal species are likely to be wiped out within a few decades. We’re talking everything from insects (which may be annoying but are, you know, essential to ecological stability) to leopards.

Globalization got mns out of poverty, and climate change will send mns back into it, and thousands on the migrant trail: The World Bank predicted in 2015 that climate change would send at least 100 mn people back into poverty by 2030 — with most of those people being in Africa. In another report on internal climate migration, the World Bank estimates that by 2050, as many as 143 mn people across three developing regions will become climate migrants, with individuals, families and even whole communities forced to seek more viable and less vulnerable places to live. In Cairo, which sees an abundance of Ethiopian, Eritrean and Sudanese refugees attempting to make their way to Europe, experts said that 2015 saw a doubling of new arrivals from sub-Saharan Africa. The climate breakdown exacerbates the reasons people have for needing to migrate, including desperate socioeconomic conditions and pressure to make ends meet, writes Carola Rackete, a German ship captain who was arrested for rescuing 40 refugees from the Mediterranean earlier this year.

We just simply don’t know how to grow food in this environment anymore. As rains, temperatures, and wildlife start to behave in new and unexpected ways, traditional farming practices that have endured for thousands of years are now becoming obsolete, Peter Schwartzstein writes in National Geographic. Changes affect when crops can be planted and harvested, when weeding can be done, how stocks can be managed, and where animals can graze. This results in more failing crops, more hunger in parts of the world that were already vulnerable, and more suffering as traditional knowledge and culture are eroded.

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Climate considerations are a growing priority for investors: In 2018, money managers had USD 3 tn in assets invested with climate change and carbon factors in mind, according to the US Forum for Sustainable and Responsible Investment. This is not about surrendering returns for the sake of doing good, but rather identifying companies and sectors developing innovative solutions to climate change and reducing exposure to those that are less likely to do well in a warming world. As governments and companies come under greater public pressure to change their behavior, having a climate change investment strategy is increasingly seen as a smart approach.

For many, alternative energy is the default sector: Renewables are now seen as a highly attractive investment proposition, in part due to policy and framework changes that have simplified the investment process in many countries, but also thanks to large companies like Apple and Google adopting renewable sources to power their operations in the US. Investment in alternative energy could include companies focused on solar, wind, or geothermal production and distribution, or companies that produce the infrastructure for climate-friendly energy production, such as battery cells for electric cars.

But there are many other ways to “climate-proof” your portfolio: Funds focused on the environment are growing in number and scope, and include Templeton Global Climate Change, Aviva Investors Climate Transition European Equity Fund, and DWS Invest Climate Tech fund. Green bond funds are also growing. Companies seeking to transform entire industries — undertaking sustainable building construction, for instance — are now a major source of green investment, but anyone looking to invest might also consider companies undertaking more moderate change, perhaps working to retrofit buildings or supplementing existing power sources with alternative energy.

Meanwhile, technological innovations in the field are ready to boom: Smart mobility — including electric vehicles, commodities for car batteries, and consumer-related services like carpooling — carbon capture and storage, energy efficiency, smart grids, and agritech all have the potential to create massive disruption and transform markets. Vertical farming initiatives such as Crop One use up to 99% less water than traditional agriculture. Food waste management company Winnow uses AI and image recognition to track which items of food are regularly thrown away in restaurants. Precision agriculture, used by companies like Trimble Navigation, employs software installed on farm machines to track weather and soil conditions so that farmers can make the best use of their resources. And in Asia, investments in high-speed rail, like Hong Kong’s MTR, are going full steam ahead.

But beware of the bubble: Investors still need to be mindful of risk, say money managers. Some warn of a repeat of the market crowding and margin pressures seen in the wind and solar energy sectors in 2007, saying that huge growth doesn’t necessarily yield substantial returns. Others caution that any area of investment trying to be cutting-edge is going to necessarily be high-risk. Climate-themed investment funds also have a relatively short history, so their performance can be difficult to assess.

The recommendations? Diversify and do your research. Investment best practice applies in this field, as in any other. Assess how much risk you want to take, the time horizon for your investments, minimum investment requirements and potential tax implications, wealth managers say. And seeking guidance is no bad thing. Success in this kind of investment is all about “understanding the traditional tenets of asset allocation, portfolio construction and having a financial partner, an advisor or wealth manager, who can help you navigate this process,” says one adviser.

And if finance isn’t your sector, there’s plenty of things you can do around the office to make it greener. You’ll get more than your fair share of pages on the web about how to make your office space more sustainable. Some of these, like this one from Work Design, offer typical advice such as setting up recycling stations, unplugging devices, using LED lamps, etc. Zero Cater has a neat summary if these in a very nice infographic. Others, such as Bevi Blog, offer up much more radical tips, including considering allowing people to work remotely to really reduce carbon footprint.

We here at Enterprise are working our way through the list. We’ve recently ticked off greening up our offices from the list with potted plants, courtesy of sustainable hydroponics agriculture company Al Bustani, and a green wall by Living Blocks.

Your top 5 pieces of business and economic news in October:

• Egypt’s headline inflation falls again for the fourth consecutive month, moving from 7.5% in August to 4.3% in September.
• The IMF hints at post-loan arrangements with Egypt, with any future cooperation contingent upon continuing structural reforms and the Sisi administration’s program to shore up the social safety net.
• The government’s economic program comes under fire from the House of Representatives, with ongoing austerity measures being the main focus of criticism.
• The CBE is expected to begin unlocking bns in reserve liquidity to spur corporate borrowing and kickstart the growth cycle.
• Capital Economics says Egypt will be the region’s “star performer” in 2020.

Egypt (and the world) are already experiencing myriad climate-induced changes — many related to water, crops, heat, weather and health. This National Geographic infographic gives the global overview.

Did you know that Cairo is expected to face a severe water shortage by 2025? We are in fact on a list of the ten cities in the world most at risk of running out of water. Alexandria, meanwhile, is valiantly trying to stem the tide of rising sea levels. And levels of dissolved oxygen concentrations, which are getting progressively lower, are leading to the deterioration of Nile water quality, posing a threat to fish production, agriculture and human water consumption.

Lengthening seasons, pests, droughts, and flooding are affecting crop production: One study shows that by 2050, suitable croplands for the world’s four top commodities — corn, potatoes, rice, and wheat — will have shifted. This has the potential to up-end our entire global agricultural system. Egypt’s fertile Nile Delta could lose up to 15% of its key agricultural land by 2050, due to salinization. Just last month, Egypt’s agriculture minister warned of the potential impact on our food security, stressing that the government was taking steps to support sustainability in food production, including cultivating new, less water-intensive varieties of rice. It’s reached the point where some initiatives are even seeking to retrain farmers, to help them adapt to their new reality.

We’re already feeling the heat, but it’s only going to get more intense: By 2100, average temperatures will have increased by several degrees. Warm climates will be radically transformed, with “near-universal saturation of air conditioning” becoming a necessity. This, however, will only serve to keep driving temperatures up. In Egypt, scorching heat is a regular occurrence, but it’s now reaching new levels. In 2018, the Egyptian Meteorological Authority said that the past three years had been the hottest in the country since recorded temperatures started — and the pace of the temperature increase is picking up.

Extreme weather conditions are even affecting our artefacts: In Egypt, our ancient monuments are feeling the impact of see-sawing weather, a UN study shows. Longer periods of searing heat in Aswan are cracking many of the rose granite structures, some of which date back to the time of the pharaohs. And in Luxor, increasing heavy downpours of rain are eroding centuries-old mud brick structures.

Public health risks are growing too: Whether it’s the spread of infectious diseases in the heat, hunger and poor nutrition from declining crop production and higher levels of CO2 in the air, or an increased likelihood of heatstroke, a warmer climate is no good for our health. The increase in extreme weather will also lead to more power outages, which could badly impact hospitals and transportation systems. In Egypt, over 100 people died from extreme summer heat waves in 2015. Many more deaths from diseases like malaria, diarrhea, malnutrition and respiratory conditions are expected as temperatures keep increasing. The WHO predicts that, if we continue our current trajectory, some 1000 Egyptian children will die annually from diarrhea alone by 2050.

There are large-scale government efforts to tackle climate change: Egypt is a signatory to the major climate change protocols, and has several government-led initiatives that seek to protect the environment (or at least minimize damage), in a host of areas ranging from energy to waste management to plastic reduction. The Environment Ministry is currently working on a strategy that is meant to curb consumption of single-use plastic bags, and has received a USD 2 mn grant from the European Union to back its research for the plan. The smart policy could even see the government offering EUR 6 mn-worth of subsidies to plastic producers to build new production lines of biodegradable bags to further expedite the move away from single-use plastic.

Anything we say about Egypt’s environmentally friendly policies would not be complete without highlighting our shift to renewable energy sources, particularly with the development of the massive USD 2 bn Benban solar power park. The 37 sqkm park, which will generate 1.5 GW of clean energy once it is fully operational, is set to be inaugurated at the end of the month. The development of the park is part of Egypt’s plans to produce 20% of its energy needs from renewable sources by 2022 and 42% by 2035.

Smaller, grassroots initiatives might be less known, but are also crucial: Several Egyptian startups with environmental mandates have been founded in recent years. Many are affiliated with green tech promoters icecairo and icealex, members of international networks working to promote sustainable entrepreneurship. Others include the Cairo Climate Talks, a monthly Egyptian-German forum that hosts environmental discussions with policymakers around the world. YouthThinkGreen is dedicated to raising youth awareness about the environment and climate change, through educational offerings in and out of school. And several startups, including Mobikya, Up-fuse, and El Nafeza, work to turn waste into usable materials, while online organization Greenish focuses on waste reduction.

And we have a pan-Arab youth movement with similar goals to Greta Thunberg’s Fridays for Future: The Arab Youth Climate Movement is “working to create a generation-wide movement across the Middle East & North Africa.” It was founded in the lead up to the September 2012 Doha United Nations Climate Change Conference of the parties to the Paris Agreement.

SEKEM is one grassroots organization trying to rehaul the system: SEKEM,which owns the well-known ISIS Organic brand, applies an approach to farming in reclaimed desert land near Cairo that emphasizes zero use of synthetic fertilizers, known as “biodynamic agriculture.” BD emits fewer greenhouse gases and is more likely to lead to carbon soil sequestration, which happens when CO2 is pulled out of the air by the soil. It is similar to organic farming. BD crops have been found to be more resilient to climate change and more energy efficient to grow than their non-organic counterparts.

Using BD to power its group of retail companies isn’t the only thing SEKEM is doing. The organization also maintains a “sustainability balanced scorecard system” which tracks indicators relevant to environmental challenges. It is also engaged on an international level in the UNFCCC climate negotiations, the World Future Council, the UN Global Compact, and the World Economic Forum, and on a national level with local climate change movements and public sector initiatives.

Among the initiatives the country needs to kick into gear is a strategy to promote green transformation recently announced by the government. The strategy, says SEKEM, demonstrates a “remarkable awareness” of sustainability as a driver for competitiveness and future prospects. The strategy is meant to focus on investing in water conservation, energy efficiency, renewable energy, sustainable agricultural practices, eco-tourism, green transportation, waste-to-energy projects, and poverty alleviation programs. According to SEKEM, one NGO that has been instrumental in pushing it forward is the Egyptian National Competitiveness Council.