Originally posted March 9, 2021

Humans have suspected climate cycles ebb and flow since classical antiquity, and over time, as with most things, our once rudimentary understanding has become increasingly sophisticated. Nonetheless, it wasn’t until the early 20th century that we even hypothesised humans had the ability to materially alter the composition of the Earth’s atmosphere – and only in in 1995 with the Intergovernmental Panel on Climate Change’s (IPCC) Second Assessment Report did we know with certainty that humans were responsible. Evidence since then has continued to build, and whilst the path has been fraught with difficulty, we now find ourselves reshaping much of what we do and how we live, in an effort to manage global warming to (ideally) 1.5 degrees Celsius above pre-industrial levels.

Fantastic progress is happening at this very moment to create much needed structural change. In the financial sector alone, issuance for sustainability and sustainability-linked bonds surpassed USD600b in 2020 (USD326b in 2019), innovative products continue to be rapidly developed, and the rate of adoption is truly unprecedented. I have long been a fervent believer in the ability for the financial system to create positive, lasting change through the strategic deployment of capital, and it is heartening to see that unfold.

That however brings me to why I decided to write this piece. The greatest catalyst to my own development has long been to contemplate the uncomfortable questions, to identify where I fall short so I may then set a path towards growth and betterment. Applying that approach to sustainability, I find myself coming back to the same question – are we really doing enough to reframe our approach of boundless consumption to one of greater moderation? Whether I’m in Melbourne or in Hong Kong, talking to friends, family or colleagues, the answer (for me at least) right now is no – but there’s definitely marked progress.

How then do we create positive, behavioural change in a world that incentivises the accumulation of capital? Two things come to mind: communication and innovation, both skills have helped us thrive for ~70,000 years. Communication allows us to convey a message and, unlike any other species, unite under a shared belief. Over time, human ingenuity has allowed us to propagate these beliefs and whilst that ability comes with a multitude of complications, it also provides us with a mechanism to facilitate change. People are asking questions now that a decade ago were almost unimaginable, that curiosity leads to innovation, all of which sets us on a path towards reconnecting ourselves with the physical environment. Delve further into the topic and you quickly realise social and environmental issues are typically intertwined, sharing a cause and effect relationship. As we look beyond just emissions to biodiversity and natural capital, it is no longer adequate to adopt a myopic view that favours convenience and the status quo over impact and equality.

The Dasgupta Review at last puts biodiversity at its core and provides the compass that we urgently need. In doing so, it shows us how, by bringing economics and ecology together, we can help save the natural world at what may be the last minute – and in doing so, save ourselves. – Sir David Attenborough

Released in early 2021, the Dasgupta Review is a 600-page tome encapsulating the economics of biodiversity, reflecting on the path that led us here and offering solutions to take us forward. At its core, the Review emphasises the need for Nature to be recognised as an asset, highlighting the fundamental contribution Nature makes to societal well-being. We now find ourselves in a situation where ignoring Nature’s intrinsic value has created an imbalance between supply (goods and services the biosphere has to offer) and demand (goods and services we extract and deposit), our ecological footprint. That message in and of itself is nothing new, we’ve known this for decades, but we have historically assumed biodiversity was external to the human economy.

The Review goes on to provide us with various options for change that seeks to address these imbalances, housed under three key banners:

Balance the impact equation and increase Nature’s supply

• Improve access to community-based family planning. Directing a greater level of funding towards women empowerment (improving access to education, family planning, reproductive health services) creates resilience and shifts behaviours.
• Shifting our consumption and production patterns by placing less reliance on diets rich in animal products, optimising farming practices through technological innovation to enhance agricultural yield.
• Natural asset conservation and restoration recognising the importance of our ecological footprint, the Nature’s regenerative capacity, and biodiversity. Restoration is costlier than conservation.
• Improve efficiency of extraction and reduce waste (circularity) that focuses on the entire life cycle of a product in an effort to reduce per capita consumption.

Change our measures of economic success

• Adopt inclusive wealth as a measure of success to protect and promote well-being across generations.
• Improve productivity measures by ensuring they account for Nature.
• Improve decision-making through natural capital accounting to disincentivise financial flows that lead to environmental degradation.

Transform our institutions and systems

• Effective institutions are polycentric and layered, they pool knowledge from all levels of the organisation. They also recognise Nature’s true value to correct inefficient economic distortions such as the removal of perverse subsidies.
• A financial system that supports Nature and deploys capital strategically to promote sustainable development.
• Reform education and economics to reflect the role of Nature that in turn transforms our reasoning, influences our thought processes, and impacts public policy.
• Empower citizens to make informed choices and implement change.

We continue to make progress each and every day, and whilst there is much to do, we find ourselves at the tipping point. The coming years present us with a monumental challenge but a far greater opportunity that will require a deep level of introspection, foresight, and innovation. The Dasgupta Review provides us with some of that guidance urging us to reframe our approach and tackle these systemic issues with unwavering commitment in order to find equilibrium.