Earth Overshoot Day: How Companies Can Lead the Journey Towards Sustainability

The Earth Overshoot Day marks a sobering milestone by highlighting the alarming rate humanity is exhausting the Earth’s natural resources and serving as a wake-up call to the urgent need for more sustainable businesses and practices. 

Each year, our planet reaches a symbolic milestone called Earth Overshoot Day, marking the date when humanity's demand for ecological resources exceeds what the Earth can regenerate in a single year. It is determined by the Global Footprint Network, an organization that measures and promotes sustainable resource management. The concept helps illustrate our global society’s ecological deficit, highlighting the need for urgent action.

The Global Footprint Network calculates Earth Overshoot Day by comparing the sum of individual, governmental, and business contributions to the ecological footprint — carbon emissions, forest degradation, food production, and other factors — with the Earth's biocapacity. Biocapacity refers to our planet's capacity to generate renewable resources and absorb carbon dioxide emissions, while the ecological footprint measures the balance between the resources we have and the resources we consume.

The Global Footprint Network utilizes data from various sources, including United Nations reports, national statistics, and scientific studies, to estimate the ecological footprint of different countries. This data is then aggregated to determine the global ecological footprint and its comparison with the Earth’s biocapacity.

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Understanding the Ecological Imbalance 

According to the Global Footprint Network, our planet first went into global overshoot in the early 1970s. In 2023, Earth Overshoot Day falls on August 2^nd, with the implication that it would currently take about 1.75 Earths to meet the demands we impose on nature. 

Individuals and companies can play a significant role in addressing this ecological imbalance by understanding and reducing their ecological footprint. The Global Footprint Network offers online calculators that enable individuals to assess their impact on the planet based on their lifestyle choices, energy consumption, and waste generation. Similarly, corporations can calculate their footprint by evaluating their supply chains, energy consumption, and waste management practices. 

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Sustainable Strategies for a Regenerative Planet 

The good news is that a substantial number of stakeholders — including society at large, the financial system, companies, and policymakers — worldwide have grasped the importance of proactively addressing sustainability issues, as they recognize the existence of tangible economic and material risks, and realize the long-term benefits of acting now.

According to a PwC report, since 2020, there has been an unprecedented rise of sustainable-orientated investments, which have the potential to significantly impact Earth Overshoot Day by promoting practices that mitigate resource depletion, reduce carbon emissions, and encourage conservation efforts. The report states that asset managers worldwide expect substantial growth in their assets under management related to ESG (Environmental, Social, and Governance), reaching an estimated value of $33.9 trillion by 2026 — a significant increase from the $18.4 trillion recorded in 2021.

The rationale for sustainable development and investing is already well-established; it unlocks new opportunities and significant efficiency gains; fosters a culture of innovation; and elevates reputations within the business landscape, all of which help mitigate the ecological debt Earth Overshoot Day represents.

Several initiatives can play a significant role in working towards a more sustainable future:

• Supporting Circular Economy: Circular economy aims to eliminate waste, maximize resource efficiency, and promote the reuse, recycling, and repurposing of materials. Prioritizing circularity in production and consumption processes contributes to reducing resource depletion and waste generation, thus extending the lifespan of valuable resources. According to the World Resources Institute, implementing circular economy strategies has the potential to cut global greenhouse gas emissions by 39% (22.8 billion tons), which could play a vital role in mitigating the impacts of climate change. Additionally, Accenture’s research highlights the circular economy’s potential to generate an additional $4.5 trillion of economic output by 2030;
• Accelerating the Adoption of Green Technologies: Green technology startups are at the forefront of developing innovative solutions to address environmental challenges and promote minimal resource usage, including renewable energy generation, carbon capture and storage, green waste management strategies, clean transportation, green data centers, smart mining processes, and sustainable agriculture and aquaculture. A report by BCG reveals that cumulative investments in green technology doubled from 2016 to 2018 to reach $10 billion, and the sector is expected to grow at an annual rate of 25-30%, which could make it a $45-55 billion market by 2027;
• Influencing Corporate Behavior Through Shareholder Activism: shareholders can use their voting rights and influence to advocate for sustainability-related changes within companies. This can include supporting resolutions for enhanced environmental disclosure, setting greenhouse-gas emission-reduction targets, strengthening supply chain sustainability practices, or joining corporate sustainability initiatives like the UN Global Compact. 

Earth Overshoot Day serves as a poignant reminder of mankind’s unsustainable trajectory and the need for urgent action. To address this global challenge, our society must collectively embrace sustainable practices and invest in innovative solutions to navigate our course toward a balanced and harmonious relationship with our planet.

To learn more about sustainable investing, check our article on Challenges and Opportunities to ESG Investing.