As we launch the latest edition of the S&P Global Sustainability Quarterly, stakeholders are increasingly recognizing that the sustainability challenges facing the world are interconnected: You can’t effectively talk climate transition without considering the implications for nature and biodiversity. A robust energy transition strategy will also weigh the impacts on energy affordability and energy security.
This theme of interconnectedness was on display at the summits that S&P Global Sustainable1 hosted in Paris and Singapore in May, where attendees discussed themes ranging from physical climate risks to net-zero to the energy transition to nature. Throughout these discussions, we heard about the importance of taking a holistic approach to sustainability issues and not treating them in silos.
The research that follows shows how these connections are playing out around the globe and across borders. We look at how rising water stress could have a long-term impact on economic growth in Mexico, and how the world’s major food and beverage companies are approaching water stress and conservation. We also examine the economic and political environment of Chile and Peru, which will play a key role in supplying commodities needed for the energy transition and gauge the risks and opportunities of industrial decarbonization efforts, from the global trade impact of carbon pricing in the EU to the carbon capture, removal and credit solutions.
And underlying it all is the growing understanding of the global economy’s reliance on biodiversity and ecosystem services— a topic we explore in research based on a new S&P Global Sustainable1 dataset.
Events like the wildfires now raging in Canada, which blanketed major US cities on the East Coast in smoke for several days, drive home the point that what happens in one part of the world can have knock-on effects for the sustainability of other industries and jurisdictions.
S&P Global Sustainable1
The global economy is benefiting from nature even as it is driving nature loss, which is reducing nature’s ability to sustain ecosystem services.
Cropland faces growing water stress around the world. Is sustainable agriculture a priority for food producers?
Without adaptation to climate change, as many as 20 of Mexico's 32 states face high exposure to water-related stress by 2050 under S&P Global Ratings’ scenario analysis, up from about 11 today.
Chile and Peru are likely to play an important role in adjusting commodity supply chains, given the increased demand for minerals for the energy transition alongside the US and European countries seeking to diversify mineral sources.
Companies pursuing carbon capture, removal or credits could face potential financial costs, technical challenges and risks relating to still-evolving regulatory and voluntary guidance.
The EU’s Carbon Border Adjustment Mechanism aims to prompt industries to decarbonize without being undercut by imports from geographies with no carbon cost.
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