The world has fallen behind on both the UN Sustainable Development Goals and the Paris-aligned climate commitments for 2030. With just over five years to go, it’s time to get our houses in order.
The year 2030 is just around the corner. When looking at the portfolios we manage on behalf of our members, 2030 falls within the investment time horizon of more than half of our assets. This is also within the timeframe in which our group needs to consider current and future risks.
In 2015, all 192 UN member states adopted the 17 UN Sustainable Development Goals (SDGs) which call for collective effort and collaboration on key metrics to improve the lives of everyone on the planet. Ambitious targets have been set for each goal, which they hope to achieve by 2030.
That same year, in Paris, the world also committed to limiting global heating to 1.5 degrees above the pre-industrial age baseline temperature. Like the UN SDGs, the Paris-aligned climate commitments have also set ambitious targets for 2030.
Are we on track to meet these targets?
Currently, the world is not on track to meet any of its 17 SDGs by 2030, and rather than reducing emissions by 45% from 2010 levels, 2030 emissions are expected to be 9% higher.
In one recent engagement with a large global data provider, none of the listed companies that it tracks had emission-reduction plans that cover Scope 1-3 emissions compatible with a 1.5-degree world; and according to a recent poll, only 6% of scientists on the international climate change panel believe a 1.5-degree world is still attainable.
The 1.5-degree target was seen as the maximum we could tolerate without devastating consequences for humanity and ecosystems. The world today is already 1.2-degrees warmer, and we are experiencing significant negative consequences. It is difficult to imagine what a 3-degree warmer world would look like, but the consequences for less robust systems that have fallen far short of meeting the 17 UN SDGs are likely to be catastrophic.
More narrowly, even when we use traditional metrics – like economic growth – as a proxy for well-being, the world is expected to underperform to 2030. The International Monetary Fund (IMF), for example, sees below-trend global growth across its five-year forecast horizon – a situation which, even if there was nothing else going on, would leave millions more entrenched in poverty.
For South Africa, these failures are especially crippling, given our economy’s inability to perform at the level required to lift citizens out of poverty over the last fifteen years, as well as the social injustices that still scar us 30 years after Apartheid.
How to operate in this context?
So, what about 2030, then? That is just more than five years away. How should we operate in this context? And how should our members expect us to operate?
For more than 80 years the PPS Group has defined its purpose as looking after the financial interest and well-being of its members by allowing them to live the lives they want to live. By living this purpose, our organisation has been highly successful at protecting our members against perils and helping them be successful at growing wealth.
However, our purpose has been less successful in recognising the long game we need to play as a Mutual profoundly interested in the future education of professionals and supporting the communities our members serve. We should also address whether returns to members can come at any cost or if there are certain types of investments we should avoid.
Our renewed purpose as an inter-generational mutual
The evolution of our purpose as an inter-generational mutual will place education (UN SDG 4) and sustainability (UN SDG 12) at the core of how we operate. We will continue to focus on protecting and growing our professional members’ wealth, but not regardless of its societal cost or impact on future generations.
Excitingly, the emphasis on education will focus both on enabling our members and my colleagues to make more resilient decisions about our shared futures, as well as on how our organisation can support tertiary institutions and schools more effectively in helping to grow our professional membership base.
Similarly, our focus on sustainable production and consumption patterns talks to both our hiring and procurement policies in terms of transformation and gender, as well as mitigating negative environmental and inter-generational impacts on future members.
In my own space, in how we invest on behalf of our members, we are implementing ways we can invest with impact around UN SDG 4 (education), as well as how we can partly transition from fossil fuel companies in our global portfolios.
In summary, both PPS and the world are falling behind in terms of integrating sustainability into our operations. For too long, we have viewed 2030 as a distant goal that we do not need to worry about. The purposeful journey we are taking to protect our shared futures promises to be particularly rewarding, and I look forward to providing you with regular updates around our journey and how you can contribute.