If you read The Economist magazine last week and followed the results of the United Nations' Rio+ meeting, you can put two and two together: The planet is forever changing before our eyes and it will be up to the private sector to change it for the better.
As The Economist said of the Arctic ice melt alone, "Perhaps not since the 19th-century clearance of America's forests has the world seen such a spectacular environmental change. It is a stunning illustration of global warming, the cause of the melt. It also contains grave warnings of its dangers. The world would be mad to ignore them."
The results of Rio+, of course, were ridiculous -- in every sense of the word. (And I am speaking of the "policies" that came out of it, not the ridiculousness of Hollywood celebrities and NGO heads flying there and staging side events with donors' money.)
The results of the Rio+ summit were ... wait for it ... to endorse an agreement to act on what the world "should" do to save itself. As for committing to actually doing so -- well, that is being left for another day. Oh yes, the more than 100 world leaders agreed to that, unless the private sector wants to take the ball and run with it.
Reuters noted that after the lackluster agreement, attendees were left "convinced that individuals and companies, rather than governments, must lead efforts to improve the environment."
One way to do accomplish that goal, I believe, is through impact investing.
Robert Girling, Ph.D., professor of BusinessStrategy, Sonoma State University, writing from the San Francisco Bay area, concluded, "The fact is that more companies are coming to understand that continued prosperity vitally depends on how we treat the environment. As a result, companies ranging from global players like Google to smaller, local Bay Area companies like the office products innovator Give Something Back are pursuing a wide range of "green" business initiatives aimed at reducing fossil fuel consumption. Meanwhile, the world's financial markets continue in turmoil, in part because businesses pay attention only to the financial bottom line and fail to take into account impacts on communities and the environment as well. Insurance companies, who have to pick up the tab for environmental disasters such as Hurricane Katrina and the BPGulf oil spill, are demanding sustainable solutions."
All this means that governments won't be doing much to solve the climate crisis. As even the U.S. pointed at the Copenhagen summit on the environment last year, the private sector is crucial to solving the world's ills. The U.S. State Department meeting on impact investing this spring ratified that conclusion.
Hence, solar, wind, mining and water management, as well as efficiency projects, will be THE long trade for decades to come. Famed investor Jim Rogers believes agriculture, too, will be the place to be as resources diminish and the price of food soars.
To be sure there are micro-sectors to invest in. Those businesses closer to the ground and which directly affect people will be the big winners.
That's because the planet will always take care of itself. Gaia. But that doesn't necessarily mean we'll be able to live on it.
Invest so we can.
Virgin Group chairman Richard Branson's quote at the summit said it best: "There's very little in a document like what they've come up with to accomplish real goals. That leaves it to the rest of us to find ways to move forward."