Huge investor warns about Earth Overshoot Day

By Anders Lorenzen

Earth Overshoot Day is the day of the year when we have already used up all the resources the Earth can generate. It has been happening earlier and earlier each year since the 1970s. This year the day falls on the 2nd of August. 

It is estimated it would take 1.7 Earths to make up for humanity’s annual consumption habits.

It is important to underline that not all countries are the same. And if you were to calculate Earth Overshoot Day for each individual country, it varies greatly. In the UK it would occur already on the 19th of May, while in Qatar even earlier on the 10th of February. At the other end of the scale in Jamaica, it will not happen before the 20th of December.

Invest sustainably 

Hargreaves Lansdown, a financial services company based in Bristol, UK, is encouraging its clients to take more responsible and sustainable funds when choosing investments.

Its lead ESG (Environmental, Social and Governance) Analyst, Dominic Rowles, said that Earth Overshoot Day is a reminder of how unsustainable our consumption patterns are and of the strain they are putting on Earth’s ecosystems.

Hargreaves Lansdown has taken the opportunity to use Earth Overshoot Day to promote one of its more sustainable funds as well as urging its clients to scrutinise the sustainable practices and policies of the companies they invest in. They argue that this could be a suitable time to review your portfolio and consider how each company you invest in is preparing for the future. 

They explain that a good place to start could be their websites and annual reports. They offered the advice ‘If you invest in funds, you should make sure they’re considering the sustainability credentials of the companies they invest in.’ 

Invest in a sustainable fund

The company explained that you could go one step further and consider a fund that targets companies making a positive contribution to the environment and society, and it promotes one of its own funds, the ‘Ninety-One UK Sustainable Equity’. They argue that the fund excludes those companies whose activities result in significant negative impacts, such as companies that produce controversial weapons, tobacco, oil & gas and coal.  

Violators of the UN Global Compact principles (a UN pact on human rights, labour, the environment and anti-corruption) are also excluded. Through those principles, companies are assessed across three pillars – financial strength and sustainability, the impact of its operations, and its products or services. 

A highlight of current investments includes Agronomics, a company focused on cellular agriculture – the production of agricultural products (particularly cultivated meat) directly from cell cultures rather than via traditional agricultural methods. They argue this stock is particularly important due to the fact that the ‘production of meat globally will need to double by 2050, but this is unsustainable using today’s farming methods for a number of reasons – the land required, the emissions created, the quantity of pesticide and fertiliser needed. 

Although still a nascent technology, cellular meat production is much less damaging to the environment. The company’s success relies on global regulatory acceptance though, and the fund manager closely monitors developments here.

You can read out more about Earth Overshoot Day here.