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The fate of American democracy hinges on preserving the legitimacy of November’s election. As CEO of The Leadership Now Project, a membership organization of business leaders committed to protecting democracy, I know business leaders play a vital role in restoring faith in the upcoming election. A few weeks ago, amid the emerging risks in the upcoming election, we saw the need for business voices to join experts and election officials of both parties who were already speaking out.

Americans agree: According to a recent poll, 3 in 4 Americans say that large companies have a role in preserving and protecting democracy. Last week we launched our statement, “America Has Held Successful Elections Amid Crises Before. We Can and Must Do So Again,” which compels business leaders to support a legitimate election and use their voices and influence to call for civility as we count every vote.

The truth is we are in the midst of a crisis for our democracy, and the stakes couldn’t be higher. Even before the pandemic and this chaotic election cycle, democracy was in peril. In 2017, we started digging into what was happening in American democracy, and what we found was deeply worrying. Trust in government was at an all-time low. Indicators of democratic functioning which we analyzed, such as money in politics, weak civic culture and distrust in our elections, led us to be concerned early on about the state of the 2020 election.

The pandemic and uncertainty around the election has exacerbated the strain to our democracy which we anticipated. We face significant operational challenges that make it difficult to vote: long lines, closed voting locations and a general collapse of voting infrastructure. In addition to these very real challenges, we’ve seen countless false narratives about the legitimacy of mail-in ballots and election fraud. This misinformation — combined with the reality that it will take days, weeks, or even longer to confirm the results of the election — has caused experts to worry that Americans will not trust these results.

Doubt about election integrity, combined with fears about a contested transfer of power, has left our country anxious about what will happen in November and afterward. Experts, like those at the National Task Force on Election Crises, are preparing resources to counter these many threats we face.

Business leaders have skin in the game, and we must step up to the plate. Premature or inaccurate election results — and the resulting long-term harm to democracy — would be detrimental to the stability of our economy and markets. Political dysfunction is, according to research by the Harvard Business School, the single greatest obstacle to U.S. economic growth. The health of the economy and of markets is directly tied to the strength of our democracy and election integrity.

But the business community does not have to accept this fate. Business leaders have the power to strengthen democracy, and, according to our polling, the majority of business leaders agree our system needs reform. Business leaders have the power to inspire their communities, employees, customers and networks. Business leaders have the responsibility to use their voices in this election.

Signatories of our statement, which include more than 200 business leaders in every industry from media to finance, call for patience and civility until every vote is counted. These business leaders affirm that they will not accept election results that are presented too early or that are based on insufficient data. As these leaders know, America has held secure elections in past crises like the Civil War, World Wars I and II, and the 1918 flu pandemic. We can and must do so again.

In this last push until Nov. 3, the business community must do its part to reassure Americans that every vote will be counted. But our engagement can’t end in November. Fixing democracy is a long-term project. Although this critical moment demands all hands on deck to protect our democracy, the seeds of dysfunction were planted before 2020. And the business community must be involved with the efforts to reform our system and secure election integrity as we move toward a more inclusive and fair country for all.

Image credit: Wiki Commons

Amazon CEO Jeff Bezos has an oft-repeated mantra that “it’s always day one” at his company. On that point, sustainable packaging at the e-commerce giant has been on the radar for some time.

As far back as 2008, the question of how to improve packaging was on the Bezos’ mind. Trying to unwrap heavily packaged Christmas presents with his kids was one reason he understood the need to transform Amazon’s packaging and get rid of what many have called “wrap rage.”

The result was what Amazon now calls “frustration-free packaging.” This means packaging that is easier to open, fully recyclable and avoids hybrid materials. More recently Amazon has turned to artificial intelligence (AI) to help make a dent in the company’s packaging waste, an equally compelling problem for the company given its large environmental impact.

Over the last five years, AI applications have helped Amazon achieve a 33 percent reduction in packaging requirements. That’s a saving of more than 915,000 tons of packaging material, which equates to the elimination of 1.6 billion shipping boxes. This was achieved through a partnership between its packaging experience team and its Amazon Web Services business to create a machine learning system for packaging requirements. The team used SageMaker, a cloud-based machine learning app, to automatically optimize packaging choices at fulfillment centers. What this has ultimately enabled is a greater flexibility in how every order is packaged for delivery.

AI quietly leads the way on sustainable packaging

AI has enabled Amazon to make more sustainable packaging decisions instantly. To have a human manually sort out the right packaging for every order at Amazon would simply be unworkable. This is because of the sheer size and variability of its product catalogue, which changes by the day, Kim Houchens, director of customer packaging at Amazon, told Fast Company.

Matthew Bales, a research science manager in Amazon’s customer packaging team, expressed similar sentiments in his interview with FastCo — remarking that it would take a human “greater than the time we have here on Earth” to do what AI algorithms can achieve effortlessly. With deliveries in July of this year estimated to have been over 415 million packages, it’s easy to see why AI is a compelling tool for Amazon to improve its sustainable packaging performance. Simply put, AI leads to more packaging innovation, which can handle the sheer volume and complexity of shipping requirements that Amazon’s business model demands.

According to the company, AI algorithms optimize Amazon’s packaging in numerous ways. For instance, the algorithms can specify padded mailers instead of boxes for certain items or deliveries, making packages lighter. This means more packages can fit on every truck, thereby reducing the amount of packaging that will ultimately need to be recycled. In turn, this decreases the overall carbon footprint per item while slashing delivery costs, a triple bottom line success story.

The algorithms also make decisions using real-world customer complaints data. This helps Amazon identify items that are usually overpackaged, as identified by customers. The algorithms can also suggest items in the cart that can be packaged together. Flexible items that can be packed around rigid items, for instance, help eliminate extra deliveries, boxes and mailers. The algorithms also feed into Amazon Prime Day, an annual sale for Amazon Prime subscribers.

Amazon’s climate pledge and how sustainable packaging fits in

This all fits into Amazon’s Climate Pledge Friendly program. This pledge is part of the company’s commitment to reach the Paris Agreement a decade early, with a target of being net-zero carbon by 2040. By introducing a climate friendly labelling system, Amazon says it hopes to steer shoppers toward more sustainable purchases. Incentives are now in place to encourage selling partners to invest in lower carbon products and to create more compact products that will need less packaging.

In addition, there is the company’s new partnership with the Cradle to Cradle Products Innovation Institute. The partnership is designed to help encourage more sustainable products and procurement practices, which can help boost the circular economy.

Barriers to circular packaging

Depending on the source cited, Americans recycle 60 to 70 percent of cardboard, but that percentage is dropping — largely due to the surge in online orders, USA Today reports. Brick-and-mortar retailers and grocers, which could easily bale used cardboard boxes and sell them to recyclers, have been a large part of this recycling success story in the past.

Amazon, however, lacks physical stores where packaging could be returned for recycling or reuse. Meanwhile, Walmart, which says it is striving to lead on packaging waste, has recently been expanding on-site recycling facilities and hosting events at stores to educate consumers about recycling.

Amazon’s progress on AI, while successful, still faces huge challenges in improving its recycling and circularity performance. For example, the Washington Post, which Bezos owns, has noted that while Amazon's lightweight plastic mailers lead to a boost in shipping efficiency, they aren’t sortable in most recycling waste streams. The company continues to innovate and says it will do its part to improve both its sustainable packaging and recycling performance, but much work lies ahead.

Image credit: Unsplash

It’s clear that healthcare systems are a vital part of, and will have to adapt to, a changing climate. How that adaptation occurs depends largely on location. Healthcare systems in wealthier countries will undoubtedly focus on energy efficiency, carbon neutrality and finding new treatments for diseases that could develop from a warming plant. For poorer nations, however, the challenge will be providing access to healthcare services in the first place for those who need it the most.

Such access could make a difference, according to a new study that a group of Stanford University researchers released today. And the means of delivery includes one of the oldest types of transactions known to humans: barter.

This isn’t exactly a new idea — here in the states, reports surfaced of patients bartering goods and services for expensive health care services during and after the 2008-2009 financial crisis. Barter was also thrust into the spotlight during the 2010 U.S. midterm elections when a Senate candidate in Nevada suggested patients could pay for healthcare costs with chickens.

But in nations that are in the locus of the global climate action debate, a barter-based system could be part of a solution to addressing healthcare needs and fighting climate change.

For example, researchers at the Stanford Woods Institute for the Environment evaluated the impact of a healthcare clinic close to the island of Kalimantan in Indonesia. In the 10 years after the clinic opened within this small Indonesian community in 2007, Stanford’s researchers looked at both the clinic’s healthcare records and satellite imagery of the surrounding area during the same period. What they found was a 70 percent decrease in deforestation, equivalent to 6,700 acres (10.6 square miles) saved. In contrast, between 1985 and 2001, this specific region lost 60 percent of its forests to illegal logging.

The reason for this turnaround? During that 10-year span, the clinic, with support of the local government and nonprofits, accepted payments for healthcare services through a variety of means, including handicrafts, labor and tree seedlings. The clinic also offered discounts to village residents where it could be verified that there was a decline in illegal logging. Further, the clinic worked with other groups to provide training in sustainable agriculture tactics as well as the sponsoring of a chainsaw buyback program.

“We didn’t know what to expect when we started evaluating the program’s health and conservation impacts, but were continually amazed that the data suggested such a strong link between improvements in health care access and tropical forest conservation,” said Isabel Jones, the study’s lead author, who recently completed her biology Ph.D. at Stanford.

Researchers also concluded that the largest drop in illegal logging occurred near villages with the highest rate of healthcare access due to this same clinic.

This study is more than another example of linking climate change risks to healthcare access. A plan exactly the same as what unfolded in Indonesia may not necessarily work in a different region or a different country. But what was learned in Indonesia can spark new ideas for how to expand access to healthcare services. For companies within the healthcare industry’s value chain — whether they make medical devices, supplies or pharmaceuticals — the Stanford study provides new ideas on how to deploy their goods and services worldwide for the greater good.

What occurred at this clinic in Indonesia also demonstrates the power of partnerships: Companies have the products and checkbooks, while NGOs have the capacity to deliver due to their knowledge of the lay of the land.

The healthcare industry has proven it has the chops to work together on delivering better healthcare across the globe. Other industries, such as the automakers, have also harnessed their products in the push to end poverty. This latest research from Stanford should germinate new ways to tackle both poverty and climate change, two challenges that can’t be solved in silos.

Image credit: Reynardo Etenia Wongso/Unsplash

As of press time, well over 50 million Americans have already cast their ballots for next week's presidential election. But despite that impressive number, Election Day could still become Election Week, based on voter turnout. To that end, a next-gen startup has been partnering with an old-school industry to get out the vote.

Based in Washington, D.C., theCut says it is doing its part to boost voter turnout. The mobile barbering app has been working with barber shops as well as the coalition Shape Up the Vote by sending voter registration kits to barbers across the states to make the voter registration process simple.

The effort makes sense — after all, barber shops have long been community gathering places to catch up and banter about the latest shenanigans in sports, entertainment and, of course, politics. The founders of theCut realized they had a captive audience, with more than 70,000 barbers, 2 million-plus users and 15 million or so appointments made through the app. In addition, such attempts to boost voter turnout can help counter ongoing voter suppression tactics that continue to fester across the U.S.

"Voting is incredibly important. Black people haven't always had the right to vote, so everyone who is capable should go out and exercise that right as often as they can,” said Obi Omile Jr., co-founder and CEO of theCut, who himself is Black. “I'm excited and proud that we're able to work with Shape Up the Vote to get more people of color registered to vote."

At least one of the candidates realized barber shops show promise as venues to harvest votes during an election that could tighten as Nov. 3 nears. Last month, Joe Biden’s presidential campaign signed on for three ads that were filmed in a Durham, N.C. barber shop.

"We partnered with Shape Up the Vote because barbershops have always been trusted spaces of conversations for people of color. At the same time, barbers are trusted leaders in black and brown communities and barbershops are places where people from all walks of life will eventually come visit,” added Omile.

Neighborhood barber shops have long served as pillars of local communities, but this year they have provided a safe space allowing citizens to exercise a right continually under attack — gaining access to the ballot box.

Image credits: theCut

You might not be familiar with VF Corporation, but you certainly know many of its leading outdoor gear and apparel brands: EastPak, JansSport, Napapijri, The North Face and Timberland are only the start. Now, the company is taking on a project that is certainly timely during the ongoing COVID-19 crisis: expanding access to city parks.

According to the nonprofit The Trust for Public Land, almost 1 in 3 Americans – or about 100 million people – lack access to any city parks within a 10-minute walk of their homes. That eye-popping figure includes 28 million children.

To that end, VF is working with The Trust for Public Land to chip away at that disturbing statistic, starting with a $500,000 grant to the nonprofit VF funded through its foundation. The four projects to benefit from this program are for parks and other open spaces in Atlanta (a rendering of which is shown above), Dallas, Denver and Los Angeles. The grants will accomplish a variety of goals, including, of course, the building and expansion of new city parks, expanding greenbelts or commissioning public art. Further, all four of these projects are predominantly located near or in communities of color.  

“Over the last several months, we have seen just how valuable parks are to a healthy, livable, and equitable community,” said Diane Regas, president and CEO of The Trust for Public Land, in a public statement. “We know, though, that not all parks are created equal and more must be done to create high-quality parks where they’re needed most. The work these communities are doing across the country is demonstrative of what happens when people are united for a common cause to improve their neighborhoods. We’re grateful for the partnerships that make change happen, including from The VF Foundation.”

According to the City Parks Alliance, the benefits of city parks are more than a place to walk during self-imposed quarantine or for having a picnic outside. The long-term payoffs include the encouragement of more active lifestyles, which can result in lower healthcare costs; a boost to local economies; lower temperatures in surrounding neighborhoods; and cleaner air, which of course is a boost for public health. And now, city parks are a way for cities to improve equity: Historically, while city planners built parks for the benefit of white communities, they also built many of America’s highways through once-thriving Black neighborhoods.

Image credit: The Trust for Public Land

Within its industry, Bacardi has long stood out on the social responsibility front, going above and beyond “drink responsibly” campaigns. Now the Bermuda-based company says it has more than a little skin in the game when it comes to taking on plastic pollution and will launch compostable bottles by 2023.

If these plans come to fruition, the global spirits company said these compostable bottles could replace 80 million bottles, or 3,000 tons of plastic, annually.

The secret? Technology courtesy of Georgia-based Danimer Scientific, which has developed a polymer based on plant seeds of canola, palm and soy, will skirt the environmental problems fossil-fuel based plastics. Danimer Scientific and Bacardi claim these new compostable bottles will decompose in 18 months, whether they are composted, left in soil, or end up in freshwater or the ocean. In contrast, depending on the source cited, conventional plastic bottles take 400 to 500 years to decompose — and then there is that pesky microplastics problem.

Further, the use of this polymer will help Bacardi sidestep one of the wider beverage industry’s larger challenges: the plastic linings found in bottle closures. “It may sound small,” said Jean-Marc Lambert, the company’s senior vice president of global operations, “but add that up across every bottle produced globally, and we’re talking many tons of plastic every day. Once we’ve fixed the problem, we’ll be open sourcing the solution for the entire industry to use.”

Bacardi says it’s also working on a paper-based sustainable bottle, similar to one that a competitor, Diageo, has announced it will roll out next year.

Additional causes that Bacardi has taken on in recent years include helping small businesses recover after hurricanes in the Gulf of Mexico and Caribbean; ocean cleanup efforts including pushing back against the use of plastic straws through a partnership with the NGO Lonely Whale; and supporting job training programs designed to help young people find employment.

In the long run, Bacardi says it has goals to become plastic-free within the next 10 years. That work, in addition to these compostable bottles, include the elimination of single-use plastics within its products, plastic gift box materials, and any plastic items within the point-of-sale materials the company provides to merchants and retailers.

Image credit: Bacardi

At the beginning of this tumultuous 2020, the global count of those forcibly displaced by conflict and violence, persecution and human rights violations had increased to a record high of affecting 79.5 million individuals, a population roughly the size of the entire German population. About one-third of them have become refugees.

Although the United States has historically led the world in resettled refugees, recent years have seen dramatic decreases in refugee admission caps. Nearly 85,000 of these displaced citizens were admitted in 2016. That number was cut in 2018 to 45,000 and slashed to 18,000 for 2020. The country currently settles less than one percent of the globe’s displaced people.

Taking to Twitter to advocate for refugees

The pandemic has heightened the need to care for displaced populations. In August, Ben & Jerry’s spoke against the actions of the United Kingdom’s Home Secretary Priti Patel, who attempted to prevent refugees from crossing the English Channel.

The U.K. branch of the ice cream brand tweeted, “Hey @PritiPatel we think the real crisis is our lack of humanity for people fleeing war, climate change and torture. People wouldn't make dangerous journeys if they had any other choice. The U.K. hasn't resettled any refugees since March, but wars and violence continue.”

Ben & Jerry’s represents just one example of how business is stepping up to advocate for refugees. Championing, especially hiring, refugees benefits businesses and energizes the national economy.

Recognizing the economic value of refugees' work

The downward trend of refugee acceptance in the U.S. carries with it an implication that immigrants don’t benefit the country - a claim that couldn’t be further from the truth. The Brookings Institute highlights some ways immigrants contribute to this country, two of which are becoming productive members of a community, often in ways complementary to the native workforce, and successfully engaging in entrepreneurship.

 A 2017 study from the bipartisan immigration research and advocacy organization New American Economy revealed that refugee entrepreneurship exceeds that of other groups, including other immigrants and the native-born population. In 2015, 13 percent of refugees were entrepreneurs; that’s 1.5 percent higher than non-refugee immigrants and four percent higher than the U.S. born population.

Hiring refugees is the best business can do

Employers that make the effort to integrate these new citizens into their workforce see higher retention rates in that group of employees than overall, found a study from The New Humanitarian. The study also uncovered how managers learn and grow as refugees are invited to the fold — they become more capable of accommodating the needs of a diverse workforce, gaining open-mindedness and making adjustments like adding flexible time off.

“We’ve had more success looking for character attributes – drive, ambition, integrity – and then training people with those attributes to learn the skills we need,” noted one employer from the study. When that’s the way you approach hiring, “then you can look at anyone,” he said.

Another glimmer of hope in the American landscape comes from the nonprofit We Hire Refugees, which now partners with Atlanta-based refugee-focused staffing agency Amplio Recruiting to increase business support for refugee-centered state and federal policies. Amplio Recruiting reaches to the Raleigh-Durham, North Carolina, and Houston and Dallas-Fort Worth regions in Texas as well. The partnership elevates We Hire Refugees’ mission to inspire businesses to use their expertise, networks and capital to assist, and especially, hire refugees. The nonprofit has a Welcome Pledge for businesses to sign in support of that purpose.

“Refugees are hard working, loyal colleagues,” Sam Pardue of Indow, a window insert manufacturer in Portland, Oregon, who helped create We Hire Refugees, said in a press statement. “Admitting refugees helps people in desperate need and will help us rebuild a robust economy. We need to be letting in more refugees, not fewer.”

Companies like Chobani have already been going out of their way to hire refugees. Founder Hamdi Ulukaya (shown above) has said the best not only businesses but nations can do with increasing refugee populations is to create jobs for them. For his own part, Ulukaya actively recruits immigrants, including refugees, and pays them a living wage.

There is so much more businesses can do. A 2019 study by the Georgetown Institute for Women, Peace and Security found that refugees could contribute an additional $3.2 billion to the U.S. GDP if they were extended the same employment opportunities and wages as native-born Americans. These billions of dollars represent a growth opportunity for the U.S. as a whole, as well as a chance for every single business to step to the plate and step up its bottom line.

Image credit: Julie Ricard/Unsplash; Hamdi Ulukaya/Facebook

As COVID-19 swept across the globe, a small silver lining emerged: the realization that our planet could begin to heal. With people sheltering at home, changes to Earth’s atmosphere became so significant they were visible from space. City skylines - from New Delhi to Los Angeles to Seoul - cleared for the first time in recent history.

Nature is showing us the direct impact our daily actions have on the earth. More importantly, our clearer skies indicate that we have the power to slow, stop or even reverse the trajectory of climate change if we urgently and collectively reshape how we live and work. Technology is central to this transformation, and it, too, must be managed with an urgent and collective commitment to mitigate its impacts. As the chief commercial officer of HP Inc., I am very aware of the role our company plays in leading this transformation, the responsibilities it requires and the opportunities it creates.

Alone or in isolation, decades-long commitments are insufficient - especially by the tech industry, whose devices and data centers play a significant role in the use of electricity and consumption of fossil fuels. Aspiration is important, but we must also recognize the imminent need to set short-term, achievable goals in a sea of future-looking sameness.

We can’t wait for 2030 or 2040 - the planet needs saving now. COVID-19 has revealed an unmissable opportunity for the tech industry to be part of the solution. There are several ways the tech industry can have an immediate impact, including reducing or eliminating single-use plastics, building sustainable and transparent supply chains, and using innovative resources to build long-term solutions. Here’s how:

Making recycling truly circular

For decades, the onus was on individuals to make recycling mainstream. Campaigns like “Keep America Beautiful,” which began in the 1960s, encouraged people to confront their own disposal habits. But in focusing on consumer action, we began to overlook the private sector’s role in waste production. In the past decade, however, the business community and consumers alike have begun to question how organizations are addressing waste. It’s imperative, because right now, there are more than 150 million metric tons of plastic in our oceans, with eight million more tons entering it annually - that’s equivalent to dumping a garbage truck full of plastic into the ocean every minute of every day for an entire year.

Consumers already grasp what it means to place a plastic bottle in a bin or replace plastic shopping bags with reusable totes. These actions are critical for minimizing waste and ocean-bound plastics and must be matched by business investment in circular economies. This is the concept that replaces the traditional “take, make, dispose” process with a “make, use, reuse” model—such as using recycled plastics in the production of our everyday devices and establishing systems to recycle those devices at the end of their life.

HP, for instance, has sourced more than 60 million ocean-bound plastic bottles for use in our products and has committed to eliminate 75 percent of single-use plastic packaging in the near term - by 2025. A true circular economy is not just one that feeds plastics back into the loop but reduces the total amount of materials used to limit additional waste. And once that practice is put in place, its long-term results prove easy to maintain.

This is the next step that the technology industry needs to take: commit to a substantial reduction of materials, aggressively reduce carbon emissions, and create a circular means of production.

Building a transparent and sustainable supply chain

Another residual effect of COVID-19: it has spurred a fundamental reconsideration of global supply chains. As businesses restructure for resiliency, now is the perfect moment to address other issues such as supply chain transparency, human rights and fair trade.

Organizations cannot be blind to the practices of their supply chains, and human rights are fundamental to building a safe supply chain. If global suppliers violate fundamental human rights, safe working environments, and promote wasteful and dangerous sourcing practices, partners must walk away and restructure their pipeline. The technology sector contributes trillions of dollars to global economies and therefore needs to lead the compliance of health, safety and environmental impact; with that purchasing power, we must be careful not to perpetuate – knowingly or not – the very issues of ethics we seek to overcome.

To do so, technology leaders should determine the guiding principles that will govern their strategy, like the UN Universal Declaration of Human Rights (UDHR) and OECD Guidelines for Multinational Enterprises, and ensure that suppliers and partners are held to these same standards. It is no small feat, but the only way progress will be made is by looking inside our own organizations and honestly assessing how we can action these strategies in everyday practice.  

COVID-19 has provided an urgent call to action for the tech industry

Our industry must be better at leveraging our own solutions to connect with communities and build an inclusive digital world in which everyone can participate.

For instance, rapid advancements in internet, mobile, artificial intelligence (AI), data management and 5G - when applied strategically in emerging economies - have the ability to lift people out of poverty and nudge countries closer to achieving their Sustainable Development Goals (SDGs). According to the World Bank, increasing internet penetration to 75 percent in a developing country creates the potential to boost the country’s GDP by $2 trillion. PwC found that implementing AI across agriculture, energy, transportation and water could boost global GDP four percent by 2030, while simultaneously reducing greenhouse gases by four percent. UNESCO also cites lack of access to education as the one of the biggest obstacles to social mobility, leaving an opportunity for tech companies to bridge the education gap with sustainable hardware and software solutions.

In these ways, if our industry doesn’t act in the next two to three years to curb waste, reduce greenhouse emissions, make our consumption models more circular and deploy our own solutions within the communities that need them most, we’ll largely be in the same spot come decade’s-end. And that can’t happen. During this pandemic, we’ve already witnessed the power of technology — its ability to provide access to education, give parents with at-home schooling support and bridge the resource gap for underserved communities. Amid the global challenges we currently face, we must lean into this momentum and continue seeking out opportunity.

The COVID-19 pandemic has shone a spotlight on how our actions impact our planet, its people and our communities. As we slowly emerge from this crisis, let us all consider what actions we can take as consumers and companies to have a positive, lasting impact on our planet.

Image credit: Jürgen Jester/Pixabay

Recent analysis of the renewables landscape by BloombergNEF has determined that solar and wind power are on the verge of a tipping point: In five years, it will be more expensive to operate existing coal or natural gas plants than to build new solar or wind farms. This comes on the heels of earlier data from the International Renewable Energy Agency (IRENA), which found that, in many cases, solar and wind are already the cheapest option.

In fact, IRENA concluded that investment dollars go further now than they did a decade ago: More than twice the renewable power generation capacity was commissioned in 2019 than in 2010, but it only required 18 percent more investment.

It’s no surprise: Renewables are now cheaper to deploy

The economics of renewables have been headed toward parity for several years, but this new data now shows renewable energy’s efficiency surpassing existing fossil fuels. Coal has always been an inefficient fuel source (about 65 percent of its energy is lost in the process of burning it to generate electricity), but it was cheap. That is no longer the case, and solar and wind power have become the better investment bet, with benefits beyond economics.

Some economists note that renewables will reach a saturation point in the future. With current technologies, renewable energy may only be able to generate 70 to 80 percent of electricity across the globe, depending on regional conditions. However, the technology continues to advance. For example, electric vehicles use three times less energy compared to combustion engine vehicles (and are even cleaner when the electric source for charging is solar or wind), and battery storage technology continues to improve. Further, energy efficiency — advances in more efficient technologies in everything from data centers to washing machines — reduces demand. Improving end-use efficiency means we need less energy to generate the same amount of electricity.

In addition to being cost-effective because of its return on investment through reduced energy demand, energy efficiency is also the cleanest energy resource. You can’t emit what you don’t use.

Energy efficiency, solar and wind power all have water benefits as well, as they use little to no water. In contrast, fossils fuels use copious amounts of water to generate electricity — coal being the thirstiest of all. This is a serious consideration for countries around the world, including the U.S., that are facing increased drought and heat waves due to climate change. Reducing the use of thirsty, expensive coal in favor of water-efficient, cheaper renewables makes simple economic sense.

Opportunities to invest in renewables keep increasing

As discussions continue around how to recover from the economic stress of the COVID-19 crisis, renewable energy offers an attractive investment opportunity. Investing in long-term, sustainable solutions can both help economies recover and tackle climate change and also address resilience issues by driving a faster than business-as-usual transition to a cleaner energy mix. Many clean energy jobs cannot be outsourced and help to fuel local economies: IRENA estimates that an accelerated energy transition could mean 42 million clean energy jobs worldwide by 2050.

Some industries may experience a tighter transition in the short term; such sectors include shipping, which transports fossil fuels, machinery and pipelines around the world, as well as utilities.

Nevertheless, strategic planning and investments can help those companies move to a more sustainable and resilient business model that takes advantage of the economic shift in the energy market. Further, the lower cost of renewable energy makes it an optimal time for companies to take serious action on diversifying their supply chains, transforming their business models and ramping up sustainability goals.

Finally, with targeted investing, companies and governments can ensure communities typically left out of economic growth — in particular, communities of color and low-income communities — can be included in the solution to a more resilient, cleaner economy on the other side of this pandemic.

Image credit: Martijn Baudoin/Unsplash