The world’s greatest sustainability challenges: Problems and solutions

Where are we now?

The global landscape for sustainability is rapidly evolving, driven by urgent environmental and social challenges. The key areas of concern include biodiversity loss; climate change and forced displacement of people. These issues already affect billions of people and countless ecosystems worldwide, which has led to raised awareness around the need for increased resilience.

Biodiversity and natural capital

Companies are increasingly recognising the importance of biodiversity. Biodiversity impacts are diverse and context-specific, necessitating tailored approaches for each organisation. While some businesses are beginning to address these issues, the general momentum is still building and significant work will need to be undertaken to meet the EU’s Corporate Sustainable Reporting Directive reporting requirements.

Climate change and forced displacement

Forced displacement due to climate change is a growing crisis. Last year, a record 110 million people were forcibly displaced^[1] due to the increase in conflicts and the devastating impact of climate change and other natural disasters. Projections from the Institute for Economics and Peace suggest that if natural disasters occur at the same rate seen in the last few decades, 1.2 billion people could be displaced globally by 2050^[2]. This displacement primarily affects the Global South, where most of these individuals reside. Around 75% of the 110 million are actually internally displaced within their countries, and 80% of refugees are living in low or middle income countries where they have settled.

Pictured L-R: Lindsay Camacho and Chip Cunliffe

Increasing awareness of environmental resilience

This is crucial due to the growing impacts of climate change including rising sea levels and increased frequency of extreme weather events which threaten vulnerable ecosystems such as coastal areas. The approach to enhancing coastal resilience involves a combination of strategies, including investing in natural infrastructure like mangroves and coral reefs, which provide natural barriers against storms and flooding. Additionally, developing financial instruments such as parametric insurance^[3] for small-scale fishing operations builds economic resilience and discourages internal migration.

What could the future look like?

The future of sustainability hinges on several critical developments:

Systemic change

For change to be successful, businesses need to fundamentally alter their operations to minimise negative externalities. This means enhancing positive contributions and ensuring that business activities and interests are balanced with biodiversity, water considerations and societal impacts as a whole. Businesses also need to be able to evidence the impact of their work and how it is benefitting people and planet. Small incremental changes and lip service are no longer sufficient.

New metrics for success

Traditional economic metrics like GDP are being re-evaluated as it becomes clearer that continued and unfettered growth is not compatible with a sustainable planet. Concepts such as Kate Raworth’s ‘Donut Economics’^[4] propose measuring success based on sustainable planetary boundaries and include social well-being and ecological safety rather than mere economic growth.

Pictured L-R: Kevin Gundle, Dr Sam Sinclair, Lindsay Camacho and Chip Cunliffe

Expanded use of technology and data

Effective innovation in sustainability requires the collection and processing of diverse data sets, which are crucial for understanding complex issues such as biodiversity impacts. However, existing global datasets are often inadequate, highlighting the need for context-specific information and solutions. This enhanced data will drive systemic changes in business operations, ensuring long-term viability and alignment with sustainability goals.

How do we get to where we need to be?

To achieve a sustainable future, stakeholders should consider undertaking specific actions such as those below:

1. Recalibrating investment strategies

Investors should carefully consider how to integrate nature-based solutions into their portfolios, recognising natural infrastructure’s role in resilience and future cost avoidance. This shift involves redefining risk and return models to include the benefits of healthy ecosystems. This approach will help to ensure sufficient attention is paid to the need to transition and help to drive innovation.

2. Blended finance and innovative funding

Blended finance models – which combine philanthropic, concessional, and private sector capital – are vital for driving investment in high-risk, high-impact areas. For example, in Pakistan, the first adaptation-focused blended finance facility aims to invest in agribusinesses that help rural communities to become more resilient to climate change. This initiative, supported by the Green Climate Fund with $28 million in commitments, exemplifies how layered capital structures can encourage investments in challenging environments, driving both social and environmental impact.

3. Investment in resilience-based strategies

Various initiatives are focusing on driving significant investment into nature-based solutions and resilience-building for vulnerable communities. These efforts aim to mobilise private capital for impactful projects but face challenges in identifying scalable and replicable initiatives. An example of this is the Refugee Investment Network^[5] who are able to pair up technologically skilled displaced people with employers who are struggling to recruit in these specialised areas. This fills a significant skills gap for the employer and also provides displaced employees with decent work.

By recalibrating investment strategies to include nature-based solutions and resilience-building initiatives, stakeholders can foster a more sustainable future that balances economic growth with ecological and social well-being.