If you were ever a fan of Sci Fi like I was and remember the Star Trek IV move directed by Leonard Nimoy back in the 80s, the story was profound. It opened with a giant probe threatening earth by disabling its global power grid and blanketing it with cloud cover casing darkness and catastrophic storms. It turns out that the alien foe was searching for whale songs by humpbacks which could no longer be heard light years away as the mammals were hunted to extinction in the 20th century. Captain Kirk, Spock and the team traveled back 3 centuries to search for a pair of humpback calves, and then carry the mammals in a large aquarium forward in time to save earth from imminent destruction. It worked.
The story was among many things witty, insightful into human nature and the environmental message was powerful highlighting not only human folly, but how brinkmanship lead to ultimate survival and rapid advancement. Bring this into context, our climate crisis is not abating and if the world followed Australia’s current path and emissions target ostensibly consistent with the Paris Agreement, we will see a 3-4 degree increase in global temperatures. Economically, it would knock off 20 billion of Australia’s GDP output by 2030, 500 billion by 2050 and 4 trillion by 2100 according to the Reserve Bank of Australia.
However it does not have to be this way if massive action is taken now. But just for a moment, imagine what this money could do to improve schools, roads, tackle homeless health care, poverty, land regeneration, water purification and so on? The list is endless. Added to this, there is also so much capital in the system waiting to park in impactful investments and tackle the crises. Truth be told, government and corporate action is still inadequate in dealing with it as Australia’s emissions have risen 4 years in a row. But the big superannuation funds are now pressuring both sectors of the substantial risk they face mainly because insurance will not or may not cover the types of events recently happened, and those to come.
Nonetheless, looking at this on the other side, with all the challenges to resolve comes many business opportunities deploying market solutions to move us forward. We are in no doubt a great time of change, a future that is fearful and exciting, full of despair and hope, perilous and stable. Saying this, I often talk with private equity professionals and family office principles who are searching for investments which are economically sound, comply with ESG and makes a difference. It is great and I also love seeing the many new projects around the globe doing just that and if the movie was anything to go by, we still have a bright future ahead to look forward to.