Читать книгу ESG Investing For Dummies - Brendan Bradley - Страница 65

Pollutant emissions are a major risk for both air and water supplies. Healthy ecosystems rely on a complex web of elements that interact, directly or indirectly, with each other. Damage to any of these elements can create a chain reaction, endangering all kinds of environments due to the air and water pollution created. An unintended benefit of the COVID-19 pandemic is the slowdown in global economic activity, which has led to reduced air and water pollution. However, when the U.S. Environmental Protection Agency (EPA) suspended enforcement of environmental laws during the outbreak, stating that polluting the air or water will be allowable as long as the violations are “caused by” the pandemic, there may be unintended drawbacks as well.

Human behavior has been stressed as the major cause of air pollution, especially in cities. Beijing’s smog cloud has been “clear” for many years, but there have been important developments in air- and water-quality metrics more recently due to social and government attention. Nonetheless, air pollution has caused damage to crops, forests, and waterways. Moreover, the effect of air pollution leads to the formation of acid rain, which harms trees, soils, rivers, and wildlife.

Similarly, human behavior is also to blame for the major cause of water pollution: microplastics. Primary microplastics are tiny particles found in cosmetics or as microfibers shed from clothing and other textiles, such as fishing nets. These microplastics have been specifically produced for commercial use, while secondary microplastics result from the breakdown of larger plastic items, such as water bottles. These microplastics find their way into our rivers, from where they become a major source of plastic waste flowing into the oceans. Estimates suggest that over 1,000 rivers are accountable for 80 percent of global annual emissions, which range between 0.8 and 2.7 million metric tons per year, with small urban rivers being among the most polluted.

These are examples where, to reduce the problems of air and water pollution, companies should be more aware of their impact in these environmental areas. Transition risks can include new regulatory restrictions that increase costs for the most polluting factories, or the withdrawal of licenses to operate due to pollution or poor environmental standards.

In addition, World Bank data suggests that most countries have explicit regulations on water and sanitation companies, yet not all countries accept or follow basic conditions defined by the World Health Organization. Consequently, several companies that are obligated to offer sustainable water and sanitation services embrace voluntary certifications to achieve their sustainable and responsible goals. However, this isn’t true for the entire industry, particularly in emerging markets and developing countries, where greater adoption is required. For example, Asia (excluding Japan) produces over ten times more water pollutants than the rest of the world combined! Companies may implement procedures that offer access to water but at an increased cost to customers, including low-income groups. As a result, when evaluating industries in this field, it’s essential to clarify whether companies observe national and international principles. For example, companies that score highly on the Carbon Disclosure Project (CDP), which runs a global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts, can be found here: www.cdp.net/en/companies/companies-scores.