Sustainability is not a new concept, but now it has become prevalent. It has become a word used in every industry and by many companies. In this article, we will explore the numbers that influence sustainability on an international scale, with a lot of emphases on China, Europe, and the United States.
Why China, Europe, and the US? Well, that is because these three economic territories are responsible for 45 percent of the world’s emissions. China is by far the largest responsible for 27% of global emissions, followed closely by the United States with 11%, and Europe (which contains 27 countries) is responsible for 6.4%. Each of these territories spends billions of dollars to become sustainable, carry out ESG investments, and fund sustainable alternatives for various sectors of their industries. In this article, we highlight how much these nations spend in donations yearly, alongside ESG assets under management and budgets towards environmental protection and sustainability. We juxtapose these numbers with the population of these territories to find the average cost of sustainability in these nations.
Breakdown of how much China, Europe, and the United States spend on sustainability.
The word “sustainability” is one that has been around for a while, but it has recently been used more often in the context of business and marketing. It is important to recognize that sustainability is not just about the environment, but also about social and economic aspects. Sustainability requires a lot of resources to achieve at different levels, for individuals, small and large businesses, and even nations. All of them have to contribute a fair amount of their money and other resources, where applicable, to attain a net neutral balance with the environment, socially and economically.
There are many different ways to measure sustainability, including environmental impact, economic performance, and social responsibility. However, the most tangible way to measure sustainability is to look at how much money individuals, organizations, and businesses from these nations spend on sustainable activities, with a focus on donations, ESG investments in sustainable alternatives. Let’s examine these numbers by starting first with China.
China — 113 dollars per person
According to statistics published in 2022, charity organizations in China had received donations worth a total of almost 209 billion yuan ($29 billion), most of which went into medicine and health, education, and poverty alleviation schemes, among other causes. In 2021, China has over 100 billion yuan ($15 billion) pour in for charities around china.
Since the beginning of 2021, China’s assets under management have doubled to around $50 billion, with a direct focus on the steel, aerospace/defense, tobacco/alcohol, and coal industries. China saw nearly 80 ESG funds created in 2021, with over 170 ESG funds created since 2017.
China reportedly spent 553.6 billion yuan ($81 billion) on environmental protection in 2021, a 34% decrease from 2019, which saw 744.4 billion yuan expended on environmental protection.
Taking into account these figures, it is possible to deduce that an average of $160 billion has been invested in the sustainability of China, which provides an estimate of 113 dollars per person as China records a population of 1.412 billion Chinese citizens.
Europe- 26 thousand dollars per person
According to 2017 research by the European Research Network on Philanthropy (ERNOP), an estimated 87.5 billion euros ($91.9 billion) is donated annually by countries in Europe, with a majority coming from philanthropic contributions (53%, EUR 46 billion), followed by corporate contributions (25%, EUR 21.7 billion), foundations (19%, EUR 16 billion), and lotteries (3%, EUR 3 billion). These numbers reflect the lower bound estimate of the entire year’s philanthropic contributions.
According to PwC’s base case in Europe, the value of ESG AUM is estimated at $12.8 trillion and is projected to rise to $19.6 trillion. A truly astonishing rise in sustainability-related investments, which was just over $1 trillion in 2015.
In 2021, the EU spent €292 billion ($306.7 billion) on environmental protection programs, the highest on record, according to statistics from the EU’s statistics agency Eurostat
Europe and its 27 countries have an estimated population of 746.4 million people, putting the average sustainability cost of a European at 26 thousand dollars per person.
United States — 15 thousand dollars per person
According to the annual philanthropic report prepared by Giving USA for the year 2021, an estimated $484.85 billion was donated, growing by 4% over the previous year and coming in at $466.23 billion. Most of these donations were for the global pandemic, economic recovery, environmental-focused projects, and so on.
According to the PwC’s base case in the United States, the value of ESG AUM is estimated at $4.5 trillion, with reported domiciled sustainably invested assets for both institutions and retails growing by 42% from $12 trillion to 17.1 trillion dollars in the year 2020.
The environmental protection agency of the United States has a budgetary resource of $76.49 billion, an over 400% increase from the previous year’s budget of $17.7 billion.
The United States has a population of 332 million people, putting the average sustainability cost of an American person at 15 thousand dollars per person.
Sustainability as a concept has seen a massive reception as various nations, businesses, and individuals realize that for too long, we have been living unsustainably. This general acceptance of the concept can easily be seen when observing the influx of resources over the last decade. ESG as a concept has taken a foothold in the business world and has seen millions of investors as well as nations make deliberate efforts towards being ESG compliant. Effectively changing the way nations and industries interact with the environment. Sustainability is not cheap, and as we have seen, it demands trillions of dollars to transition to alternatives that do significantly less damage to the environment. Regardless of how costly it may be, it is still necessary for the longevity of our home, planet Earth!
Compared to the US and Europe, China indeed needs to devote more resources, efforts, and attention to the planet, considering that they are the biggest GHG emitter, contributing 27% as earlier stated. A 2022 World Bank press release stated that China would require between $14–17 trillion to go green by 2060, so it certainly has a fair amount of catching up to do on its climate obligations.