In late September 2019, the largest climate strike in history was held in locales around the world – it is estimated that at least 2,500 events were scheduled in over 163 countries. While impressive in numbers (an estimated 5,000 people gathered in South Africa), perhaps what stands out most about these demonstrations is the large number of young people in attendance, having been inspired by the actions of teenage Swedish environmental activist and Time Person of the Year in 2019, Greta Thunberg.
"Today, young climate activists around the world are galvanised around the United Nations' Sustainable Development Goals (UNSDGs) and are demanding decisive action against climate change," says Elize Botha, managing director, Old Mutual Unit Trusts.
"Young people are often disregarded as excessively idealistic, but their organising around the climate action movement proves that they do care deeply and are willing to act, suggesting to me that politicians, decision-makers and the community at large need to start paying attention."
Young South African environmental activists such as Ayakhe Melithafa, who delivered an address at the Tutu lecture, have joined the chorus. Melithafa, who had been invited to participate in a panel at the World Economic Forum earlier this year, was one of 16 youngsters alongside Thunberg to file a complaint to the United Nations Committee on the Rights of the Child in protest of government inaction concerning the climate crisis.
“I want to make every single person aware of climate change, especially people of colour who are suffering and the poor and the vulnerable, and make sure they are climate aware and climate literate,” says Melithafa
"It is incredibly inspiring and heart-warming to see the likes of Melithafa looking at their local problems from a global perspective. As adults – we ought to be doing the same," says Botha
Research shows that global warming has increased global economic inequality by way of several natural disasters. Despite historical disparities in the consumption of fossil fuels, the study indicates that populations in the poorest and most vulnerable countries will be the hardest hit by food insecurity and climate disasters such as water scarcity, wildfires and floods.
She says that even though government and the private sector are making commendable strides, they need to accelerate their efforts to focus on the environmental, social and governance (ESG) issues their companies and countries face in order to not lose out. "More leaders are committing to building their sustainability credentials today and this may help them attract capital in the future. They need to increasingly play their part to shift the economy towards carbon neutrality, otherwise brands and markets will soon lose out."
Research by Morgan Stanley reveals that over the next few decades, USD 30 trillion in wealth will transfer from baby boomers to millennials. "We are already starting to see that generation z and their millennial parents think differently about how they spend, save and invest their money," says Botha.
To illustrate, investment research company Morningstar revealed in March 2020 that 95% of millennials are interested in sustainable investment, and 90% want their investments tailored to match their values.
"ESG funds are playing an increasingly important role in delivering sustainable adjusted long-term returns for clients. This is because research shows that companies with high ESG scores tend to outperform their conventional peers over time, says Botha.
"ESG equity funds are proving to be remarkably resilient amid the Covid-19 pandemic threat on global growth in numerous sectors. Morningstar reported that amid the pandemic, 24 out of 26 index funds that focus on companies with the highest ESG scores had outperformed their closest conventional counterparts."
"The power of this mounting social movement emphasises that it's no longer an option for decision-makers to look the other way. Investors, too, would be wise not to be left behind," Botha says.
