In reality
“The Kibroth Forest was replaced with Preke Town, a beautiful, self-sustaining eco-town meant to feed, clothe, and educate itself without being disconnected from the rest of the island. Desalination plants, renewable sources of energy, ecofriendly waste treatment areas, and similar features were hallmarks of the new town. However, deep in those holes which were dug for centuries, deep beneath the beautiful self-sustaining Preke Town, Lucifer’s creatures lay in wait. Evil creatures, ready to do the devil’s bidding.” – An excerpt from the book “Preke Town”.
Preke Town was published by us in 2006 and then again in 2018. It represents a longstanding dream for environmentally friendly living that keeps us and our neighbors in good health while allowing us to meet our full economic potential. Preke Town is fiction. The United Nations Sustainability Development Goals (SDG) Report of 2024 gives us a snapshot of reality.
There is work to be done
The SDG Report of 2024 highlights that only 17 per cent of the SDG targets are on track. Many of the targets are showing minimal or moderate progress. In fact, more than a third of the goals have seen progress stalled and, in some cases, even regressed. “The scarring effects of the COVID-19 pandemic, escalating conflicts, geopolitical tensions, and growing climate chaos are hitting SDG progress hard. Furthermore, systemic deficiencies and inequities in the global economic and financial system leave developing countries to tackle enormous and growing challenges with only a fraction of the international support they need and deserve.” (Antonio Guterres, UN, 2024)
The Latin America and Caribbean (LAC) region is littered with developing countries that have to tackle enormous challenges. It is also a region that has shown the power of faith, hope and diligence. Investments may have slowed in recent times, but they have not stopped. Progress continues, because there is more work to be done. OTIB, JA. Limited’s Sustainability Development Fund (SDF) is an ESG impact investing fund that aims to address environmental and social challenges in Jamaica and the wider Caribbean.
The investment challenge
There is an estimated financial gap of 4.3 trillion United States Dollars in developing countries. That is the estimated investment needed to get us to the 2030 objectives. The SDF will place 100% of its ESG investments in the LAC region. The firms here in the LAC crave more ESG investments that encourage sustainable growth. The LAC does not have the strong SDG regulations of the European Union (EU) and the United States of America (USA). So sometimes from a micro economic perspective, it seems like an unnecessary burden, for some, to practice better environmental stewardship and make bigger positive impacts on communities and sharpen their governance practices. The SDF seeks to mitigate that by encouraging better ESG stewardship in commercial enterprises.
The environmental challenge
Countries within the LAC, such as Brazil and Jamaica, are making an effort to meet the environmental challenges. There are efforts, for instance, in the Amazon to sequester greenhouse gasses as supported by the sale of carbon credits. Similarly, Jamaica has committed to a further 17% increase in its reduction of greenhouse gas emissions by 2030. The region has also seen continued and increasing regional activism around collective environmental stewardship, which has helped move efforts forward. The challenge is to now lead increases in the use of low-carbon energy and green manufacturing and medium to high-tech industry development. This would further the regional GHG ambitions while providing for sustainable economic growth. This is one area in which the SDF will seek to make a positive impact.
The sectoral challenges
The SDF’s investment thesis is based on market trends and impact potential. Impact investments in food, energy and water have been increasing since 2020 and still require more investments for our 2030 goals to be attained. The SDF is focused, therefore, on food, energy, water, fisheries and ecotourism. These sectors are demonstrably attractive for sustainable and thematic impact.
Food: Globally, an estimated 1 billion meals of edible food are wasted every day. This is equivalent to a meal per day for the 783 million people who faced hunger in 2022. Even without such wastage, the world is far away from the 2030 objective of food security. Improvements in food costs and agricultural production are paramount. The LAC was doing comparatively well in agricultural production at the time of the 2024 SDG Report research but the impact of Hurricane Beryl on agriculture is yet to be fully assessed. The SDF will support strategic opportunities to move the region’s contribution to global food security and supply forward.
Energy: Globally, 2.1 billion people rely upon polluting fuels such as wood, charcoal, dung and crop waste, as their primary energy source for cooking. The LAC is not one such region. The LAC is instead in need of greater transition to renewable energy. This requires substantial investments and will hasten decarbonization. Regional use of renewable energy in small island states especially, lags in per capita rate. The SDF seeks to invest in suitable ventures that increase this rate.
Water: At the world’s current pace towards our goal of clean water for all, 2 billion people around the world will still live without safely managed drinking water in 2030. In fact, achieving universal coverage by 2030, will require a six-fold increase in current rates of progress. The LAC is not experiencing great water stress or significant regional issues with safely managed water. It is, however, experiencing losses of permanent water linked to droughts and rising water demand in some areas. This threatens progress and begs for an increased number of drought prevention initiatives, reservoirs and other permanent bodies. The SDF will support Caribbean improvements in permanent water bodies.
Fisheries: Several countries within the LAC that depend heavily on fisheries for livelihoods and food security, have seen positive developments since 2015. Small island developing States have shown promising growth which underscores the sector’s potential to drive economic development. Sustaining economic dividends from fisheries, requires judicious fish stock management practices that prevent overexploitation and depletion. This will indeed require investing support, which the SDF is willing to supply to suitable entities.
Ecotourism: National monitoring based on the Tourism Satellite Accounts and the System of Environmental Economic Accounts provides a good indication of a country’s capacity to measure the economic and environmental sustainability of tourism. Unfortunately, many countries around the globe are still not able to report. Nevertheless, the UN reports that tourism was only at 43 per cent of pre-pandemic levels in 2021 in small island developing states. An interlacing of the sustainability goals and tourism opportunities leaves room for SDF consideration therein.
SDF ESG goals
The challenges are many. For example, the region has high levels of inequality; 18 percent live on less than half the median income. Similarly, regional businesses want sustainable human management frameworks that move their human management practices forward and improve their social impact. Our ESG goals for decarbonization, economic development and the reduction of inequalities are uniquely defined by the challenges we face in the region. The SDF will make a positive impact by addressing these challenges.
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