When Earth Day was first celebrated, on 22 April 1970, it was the brainchild of a handful of peace activists, principally John McConnell and Dennis Hayes, along with Senator Gaylord Nelson. The two of them made an instant impact, and that first Earth Day saw 20 million people pour out on to the streets of the US in what is still the largest single-day protest in human history.
One of the catalysts of the first Earth Day was the 1969 environmental disaster off the coast of Santa Barbara, California, that saw a well leak out more than three million gallons of oil into the Pacific Ocean, killing in excess of 10,000 seabirds, dolphins, seals and sea lions. The images of the dead animals, combined with the environmental activism that had become so prevalent in the 1960s, meant that Earth Day was able to sweep the US, and by the 1990s it had become a global event.
The aims of the day have been to highlight the damage done by pollution, encourage acts such as recycling, push for renewable energy and publicise the dangers of global warming. Each of these causes was met with cynicism at first, by offending large businesses, by politicians with places on the boards of said businesses, and by sections of the general public who resist being shaken out of their comfort zones. These battles with cynics and those with vested interests in polluting the Earth continue to this day. Don’t believe me? Do a Twitter search on Greta Thunberg’s name. In 2020, more than 100 million people took action in almost 200 countries to honour Earth Day’s 50th anniversary, but its quest to highlight the damage being done to the environment remains as important as ever.
Putting the E in ESG
In 2021, it is almost unthinkable that a company of any size won’t have some sort of environmental, social and corporate governance (ESG) strategy. Politicians, too, tend to need an environmental message as part of their armoury. In the UK, Prime Minister Boris Johnson has been talking up his Green Industrial Revolution, but so far there has been much more talk than there has been action (see chart below). Foreign direct investment (FDI) can come to the rescue here, which is just as well given how few renewable energy companies have come out of the UK, and how the likes of Munich-based Siemens are at the forefront of this national revolution.
Some of the most innovative work in the UK with regards to cutting carbon emissions is being done by lesser-known companies. Gridserve is at the cutting edge of electric vehicle charging forecourts, and the company has ambitions to take its expertise all over the world. At the other end of the scale, the UK is embarking upon many renewable infrastructure projects such as the HS2 train line. This development has been carried out against a background of high-profile environmental protests at London’s Euston Station, but won’t the finished product take fume-spewing cars off the roads? The moral of the story here may be an uncomfortable one for some: you can’t save the world without cutting down some trees.
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Over in the US, President Joe Biden has chosen Earth Day 2021 to pledge to cut the country’s greenhouse gases to half of 2005 levels by 2030. Biden’s focus on ESG pledges stood in stark contrast to his predecessor Donald Trump in the 2020 election campaign, who had removed the US from the Paris Climate Agreement. Some doubted if Biden would come through with his green promises upon entering the White House, but the early signs – including rejoining the Paris Agreement – look promising.
The first Earth Day in 1970 was inspired by an oil leak, and the black stuff has retained its bogeyman status to campaigners throughout the subsequent 51 years. No region is more synonymous with hydrocarbons than the Middle East, so how are the Gulf states in particular coping with a world that is moving towards renewable energy? Well there is much talk, and companies such as UAE-based Masdar and Saudi Arabia’s Acwa Power are spearheading the region’s move towards renewables, but cutting such a lucrative pipeline will never be easy. There are geopolitics at play in this move too, given that Saudi Arabia in particular is tipping slightly from its traditional alliance with the US and increasingly flirting with China. Will Beijing see the Middle East’s energy transition as an opportunity to boost its influence in the region through FDI?
The SDGs and beyond
Intergovernmental organisations such as the UN have been at the coal face (sorry, wind turbine face) when it comes to tackling environmental issues. Indeed, tackling climate change is an issue that runs across many of the UN’s Sustainable Development Goals (SDGs). While it is most prominent in SDG7 (access to affordable, reliable, sustainable and modern energy for all), environmental concerns also play a role in hitting the 2030 targets for SDG6 (access to clean water and sanitation for all), SDG2 (achieving zero hunger by 2030) and SDG1 (end poverty in all its forms everywhere). Covid-19 has been a setback for many of these goals, but there is optimism that the pandemic has highlighted both the fragile nature of the Earth’s ecosystem and how only truly global action can tackle the planet’s biggest problems.
If, as mentioned above, oil is the bogeyman of the environmentalists, then renewable energy is often portrayed as the saviour. Here we have some good news. Investment in renewable energy companies soared in 2020, while the reverse happened to those in oil and gas, as the chart below shows. Indeed, oil and gas companies have been among the biggest losers of the pandemic when it comes to dips in revenues.
All companies will pay some heed to Earth Day. For some that will mean a nice sounding tweet from a corporate account stating: “Go beyond posting a nice sounding tweet. Take concrete action.” The public are becoming more savvy, however. Shareholders are becoming more demanding when it comes to ESG targets. Earth Day is a symbolic day on the calendar, but no business large or small can afford to take their eye off this particular ball all year round – and that is how it should be.