If business leaders want to be part of the future, they need to stop investing in the past

The resolve is high at the beginning of 2021, the first year of the third decade of the first century of the third millennium (1-3-1-3). It’s odd and leapfrogs 2. Can this mean that we are indeed going to do different things and do things differently? Will we have a sense of adventure, particularly in Africa and the developing world, leapfrogging the conventional development steps of the North? If we are going to get anywhere close to our aspirations of a universally serviced world and the end of poverty in a low-carbon near future, we’ll have to.

A pivotal post-Covid-19 paralysis moment emerged at the beginning of this year that in many ways, if embraced, could be the beginning of an accelerated pathway to exactly that future. The virtual World Economic Forum began on 26 January 2021 with the central message, “The Great Reset”.

This is a powerful statement from the leaders of the global economy, from captains of industry to governments and the major civil society players. A tacit admission that we have been barreling down an unsustainable path. The Covid-enforced pause ironically created much-needed breathing space. A chance to reflect. An opportunity to see the possible.

Who would have thought that we would survive stopping the conveyor belt of the global economy for significant periods during the lockdowns over more than a year? But we did. With all the anxiety and pain that the pandemic brought, there were positives. Cities such as Beijing, Johannesburg and Delhi temporarily eased out of their oppressive air-pollution haze, wildlife re-entered cities, quiet returned.

But, with the promise of vaccines and slowing infection rates as we get past the northern winter, talk is firmly about recovery. Economic recovery for many goes hand in hand with a return to the familiar and the jealously guarded “way of life”. As President George Bush Sr famously remarked at the Rio Earth Summit in 1992, “the American lifestyle is not negotiable”. 

It is a sentiment that has had many resonant voices all over the world, including South Africa, with enormous costs to the world economy and the environment. Our very future is threatened by this declaration. But the sentiment expressed by United Nations Secretary-General António Guterres that we have to build back better post-Covid, is instructive.

In February 2021, the UK Treasury released The Economics of Biodiversity: The Dasgupta Review, seen as significant as the Stern Review on the Economics of Climate Change in 2006. One might argue it has a higher potential for change given that the world is in a more receptive environment in 2021. The key findings are powerful, not because they are new (the biodiversity and environment community of practice has been offering this view for many years), but because of where it originates. This analysis comes from folk who have been engaging this from an economics perspective.

The first headline from the Dasgupta Review is that all economies and livelihoods depend on nature. For many, this goes against the grain. In fact, part of the reason we as a species afford ourselves the title Homo sapiens is our ability to use our cerebral capacity to master nature. Our core development paradigm is to organise nature on tap to service all our needs while modifying nature to mitigate any risks that could harm us.

We re-channel rivers from their natural flow into concrete canals to control flooding, we clear out natural vegetation to satisfy our need for expanded human settlement and agriculture. In doing so we concomitantly destroy much of the world’s fauna as we destroy their habitats or protect our domesticated livestock. This returned understanding that our entire global economic machinery depends on nature and its continued integrity is absolute.

The environment, social and good governance principles are already making their mark on the investment landscape. By 2019, 75% of retail investors had at least a quarter of their portfolios in this domain. This portfolio is projected to be worth $35-trillion by 2025 in the US alone. We can easily double that for the global target.