“Value” – GDP or Climate Change?

                                                  Whether it be at the company or national level, What happens when we failing to account for social and environmental impacts. We make poor decisions based on the bottom profit line. When we use financial Data and GDP growth as the key driver in our decision-making. We know we have to account properly for social and environmental capital. The question is not whether we do this, but how. The world is not working. Climate change is accelerating. Companies are facing up to the realities of resource depletion. Wealth inequality is spreading and the world is increasingly divided into the haves and have nots. Mistrust is prevalent. Fear is palpable, both among the rich and poor. GDP is well past its selling date. It obviously does not measure any of the most important things such as health, happiness, welfare, human equality and environmental sustainability. NASA reports that the 10 hottest years since the recording began have all taken place since 1998, indicating an unprecedented depletion of natural resouce and displacement of human sustenance in their region.

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STATISTICS SHOWING INCREASE IN LAND AND SEA TEMPERATURES.                                 Image Credits: Reuters

                                                  For example, if we look at our environmental impacts using Data tools such as ecological footprint, we see that we have gone from living well within the regenerative capacity of the planet to consuming more than 50% more each year than the planet can sustain. We are only able to maintain this rate of consumption by depleting natural capital, whether it is global fish stocks in the oceans or cutting down forest resources for Non-indigenous crop farming techniques. A report published in 2013 by The Economics of Ecosystems and Biodiversity (TEEB) for Business Coalition estimates the global top 100 environmental externalities are costing the global economy around $4.7 trillion a year through climate change, loss of natural resources and nature-based services such as carbon storage by forests and air pollution-related health costs. We know it is time is stop making imprudent, and frankly immoral, investment decisions based purely on financial information. Only when we account for financial, social and environmental capital can we make good investment decisions. Imagine a world of win-win-win. Problem solved.

 

SOURCES:

Desai, Pooran. “GDP Ignores The Things That Matter – Like Climate Change”. Bioregional (2016): n. pag. Web. 23 March 2016.

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