Gregory Voestch has been at the forefront of infrastructure investments for years. He has always been on the lookout for investment opportunities in infrastructure for long term sustainability. His opinion gets sought by executives and other decision-makers. He has spearheaded many projects aimed at developing and implementing sustainable infrastructure.
Sustainability isn’t one of the major factors that investors think about when deciding whether to invest in a project or not, but it should be. There’s a good reason why world leaders converge every year to discuss sustainable development goals. It is because humans can’t hope for a future if we don’t begin to implement sustainable practices now.
Increasing climate disasters such as flooding, drought, heatwaves, and wildfires are already a cause for concern for investors. These disasters are threatening and have already impacted business properties and operations around the world.
Although the food sector is especially vulnerable to the effects of climate disasters, these disasters often have cascading effects. For example, the 2001 drought that affected the US Pacific Northwest resulted in less water available for irrigation. Food prices skyrocketed. The dip in water levels in hydroelectric dams in the area resulted in reduced power production. Industries that depended on low-cost power from these dams were adversely affected. That included smelters, which resulted in reduced output of cans.
The risk to companies is not just material. Companies with unsustainable practices can no longer hide. Companies must adhere to industry norms such as traceability, transparency, as well as environmental and social responsibility to remain competitive. Advances in information and communication technology, as well as the rise of social media, have meant that companies with poor practices can be held accountable for the damage they cause. Many companies have suffered heavy losses and sharp dips in the value of their shares following exposure of their practices to the world.
Sustainability has now become one of the major drivers for businesses in all industries and expected to continue to transform industries through the coming years. Sustainability is now getting viewed as a competitive advantage. It has been categorized as a meta-trend by the Harvard Business Review alongside globalization, mass production, and globalization. Major corporations are now committing large chunks of their capital to sustainability commitments. For example, in 2015, Philips committed to investing billions of dollars to green product innovation, and Goldman Sachs pledged to give $750 billion in a decade to grow sustainable finance.
Companies are also including sustainability as one of the major topics for discussion when meeting their investors. It is not surprising as trends in the investment community show that investors are shifting away from businesses that are causing harm to the environment and more towards those whose practices geared towards sustainability. While many investors still aren’t enlightened about the role they play in creating a sustainable future, many are shifting towards businesses with sustainable practices as these businesses are proving to be a good investment both now and for the future.
Being aware of environmental issues has also opened up both investors and companies to financial opportunities. Companies can monitor, manage, and mitigate risks to their performance. They are also able to identify business opportunities, including the development of new and sustainable products or services to appeal to the new breed of conscious consumers. Sustainability will soon become the deciding factor over what qualifies as a good investment.