Each Earth Day, I take the opportunity to review the environmental developments of the past year and evaluate the obstacles and progress we’ve seen.
My goal is to find hope and inspiration. But it’s not always easy to muster optimism – the past 12 months have been filled with signs of deepening environmental stress. Perhaps the greatest of these can be found in the accelerating changes in our climate.
As extreme weather spreads across the globe, the latest assessment from the Intergovernmental Panel on Climate Change presents a disturbing confirmation of the growing impact of climate change.
The report, representing consensus among global climate scientists, states with absolute clarity that humans have warmed the atmosphere and that this warming is affecting weather and climate extremes in every region of the world.
Many of the changes occurring today are now irreversible – and we’ll need to begin to adapt. A coordinated and expansive effort to cut emissions deeply and quickly is required to avoid even more troubling scenarios.
While we must remain clear-eyed about the hard realities of climate change and the many other environmental difficulties we face, I believe it’s also important to take stock of positive and encouraging trends. I also like to center myself on why I and Praxis Mutual Funds are committed to working on seemingly intractable issues.
At Praxis, we believe the natural environment is a finite resource, the inheritance of future generations and a gift from God.
As stewards of God’s creation, we expect ourselves and the companies we invest in to respect the limits of our natural resources and actively work toward environmental sustainability. We engage companies from this perspective, believing it’s the best way to create a sustainable planet for our heirs and sustainable profits for companies over the long term.
In the past year, we’ve experienced significant progress in several areas, and that has given me hope. Here are a few general themes:
- Increased awareness and motivation among investors
The number of sustainability-oriented investors continues to grow at an astounding rate. Some want to use their investments as a catalyst for change, while others want to mitigate investment risks or capitalize on environmental opportunities. In any case, their concerns are being raised and companies are responding. Investors and companies are mobilized as never before to tackle tough environmental issues.
- Shareholders are being heard
Investors are making their priorities known through their votes. The 2021 proxy season saw record high votes in favor of environmental – and particularly, climate-related – shareholder proposals. How these votes will translate into policy and operational changes will play out in the coming years, but historically, this kind of clear investor signal leads to corporate action.
- Corporate commitments are growing and deepening
Companies are setting broader and more aggressive environment goals. For instance, hundreds of companies made a Net Zero commitment in the last year, setting a goal of eventually winding down and eliminating their carbon emissions, usually by 2050 or earlier. Others made commitments to phase out toxic chemicals from their products, work to end deforestation in their supply chains, and address many other environmental concerns.
On Earth Day, I take the opportunity to remind myself that despite the various challenges we face in this urgent work, it’s heartening to know that investors and companies are coming together to be better stewards of the environment we all share. The momentum is real, and it bodes well for what we can accomplish if we act boldly and creatively, together.