HSBC: Earth is running out of the resources to sustain life

Here’s what is truly remarkable – One of the world’s largest banks, HSBC, a British multinational banking and financial services holding company, headquartered in London, England, says the planet is running out of resources and warns that neither governments nor companies are prepared for climate change.

A group of analysts at HSBC said in a note that cited research from the Global Footprint Network (GFN) that the world spent its entire natural resource budget for the year by August 1, Basically, this means that people have used up all the planet’s resources for the year in just seven months.

Earth Overshoot Day
As of August 1, 2018, we have used more resources than the Earth can regenerate in a year, and we continue to maintain this deficit by liquidating stocks of ecological resources and accumulating waste, primarily carbon dioxide in the atmosphere.

Seagulls search for food near a sewage discharge area next to piles of plastic bottles and gallons washed away by the water on the seaside of Ouzai, south of Beirut on July 19, 2018

JOSEPH EID, AFP/File

It is significant that every minute past overshoot day, in this case, August 1, is the equivalent of drawing down capital rather than living off interest. “One year is no longer enough to regenerate humanity’s annual demand on the planet, even using conservative data sets,” states GFN.

And every year, Earth Overshoot Day has been steadily moving forward in time since GFN first started tracking it in 1970. In that year, we overshot Earth’s resource budget by only two days. Overshoot Day fell on December 29, according to HSBC. That date has been pushed up by almost five months since then.

Factoring in climate risks
According to HSBC, ignoring climate risks is likened to turning one’s back to a crisis staring us in the face. There is a need for businesses, big and small, to disclose information about their exposures to climate-related risks, including the company’s relationship between financial variables and climate change impacts.

“In our view, adaptation will move further up the agenda with a growing focus on the social consequences,” the HSBC analysts said.

This is why more and more businesses are preparing climate-related financial disclosures that would help investors and other stakeholders in understanding material risks, focusing on four key elements: corporate governance, strategy, risk management, and climate-related metrics and targets.