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Over(shooting) the limit

Why we need to keep within planetary boundaries

Demand for fuel and raw materials is decimating the natural world, making extreme climate effects more likely. So, what might the world be like for people and investors as we go beyond planetary boundaries?

Read this article to understand:

  • Why unsustainable resource use is testing Earth’s ability to regenerate and self-regulate
  • How failing to meet Paris Agreement goals will alter zones suitable for human settlement, agriculture and fisheries
  • How investing in companies whose operations, products or services can reduce nature impacts can help preserve the planet and potentially generate solid returns

It is beyond dispute that the rate at which we are using natural resources and creating waste is faster than the environment’s ability to restore and regenerate.

Without a meaningful change of direction, an acute resource squeeze and much hotter planet are likely, where the zones suitable for human habitation shift and shrink. Impacts will increase with “every increment” of global warming, according to the Intergovernmental Panel on Climate Change (IPCC). But the precise effects are difficult to anticipate, as physical processes interact in non-linear ways and social outcomes will depend on the actions taken now to transition to a more regenerative economy and how society adapts.1

So, to highlight Earth Overshoot Day – the date when human demand for ecological resources and services reaches beyond what the planet can regenerate that year – we present five charts showing what the current path could lead to. Alongside them, we have insights from our climate pillar lead and investment teams.

This article is based on recent analysis that tries to capture the scenario today and possible outcomes in a world where the average temperature is around three degrees higher. This is not an unrealistic, catastrophic projection; it reflects where current policy action is pointing.2

Nature’s resources: Using too much

The natural world delivers essential services for human survival, including clean air, water and food. But renewable resources need time to renew; if usage is faster than regeneration, the quality of the environment deteriorates. Earth Overshoot Day falls this year on August 2.

Figure 1: Earth Overshoot Day, 1971-2023

Earth Overshoot Day

Source: Earth Overshoot, 2023.3

Testing planetary boundaries

Many human activities have already moved beyond “safe” zones, according to analysis led by the Stockholm Resilience Centre.

Figure 2: Beyond the safe operating space for humanity

Beyond the safe operating space for humanity
  1. Novel entities (chemical and plastic pollution): Potentially toxic, long-lasting artificial substances (heavy metals, pesticides, detergents, radioactive materials, microplastics) introduced into ecosystems. Living, invasive species may also be harmful.
  2. Biogeochemical flows: The flow of nutrients needed for healthy plant growth, including nitrogen and phosphorus. Both compounds used in fertilisers can cause water pollution and excessive algal growth.
  3. Land-system change: Driven by the human population impacting the natural environment, mostly from converting intact natural landscapes to farmland.
  4. Biosphere integrity: Biodiversity loss. Boundary set at ten times the average background extinction rate, ten extinctions per million species per year. Biodiversity Intactness Index (BII): Metric showing how well biodiversity has been maintained. In well-functioning ecosystems, BII is over 90 per cent; in at risk ecosystems, BII is less than 30 per cent.
  5. Climate change

Source: Stockholm Resilience Centre, 2022.4

Altering the climate niche

For thousands of years, humans have lived in zones (human climate niches) where the mean annual temperature is around 13°C.5 In a business-as-usual scenario, average temperatures are expected to increase dramatically. Around one third of the world’s population could experience a mean temperature over 29°C by 2070, with extreme hot zones covering most of the tropics. In those areas, heat could be life-threatening for more than ten months each year.6 Forecasts suggest each additional degree of warming could push one billion people out of the niche, potentially forcing them to migrate, with dramatic geopolitical and social impacts.7

Figure 3: Business-as-usual: Extreme hot zones expand dramatically by 2070 

Extreme hot zones expand dramatically by 2070

Source: GLOBAÏA, 2023.8

The struggle for food on the plate

Although higher concentrations of carbon dioxide encourage plant growth, yields of many important sources of food tend to diminish at higher temperatures, compounded by shifting rainfall patterns.9 Maize yields could drop 25 to 35 per cent if temperatures increase by 3.3 degrees or more, while wheat could be less impacted. The catch potential of fisheries around the equator could also fall sharply (Figure 4).10

Figure 4: Anticipated decline in productivity at higher temperatures (per cent)

Anticipated decline in productivity at higher temperatures

Note: Graphic adapted from The CAT Thermometer.11
Source: Aviva Investors, 2023; IPCC, 2023; iScience, 2022; Climate Action Tracker, 2022.12,13,14

Facing multiple tipping points

As we peer into the future, it is impossible to anticipate what could happen as abrupt phase changes could set off unexpected reactions. Researchers believe the world already faces several climate tipping points (self-sustaining shifts in the climate system that once started are almost impossible to stop, locking in substantial impacts like ice sheet collapse or coral reef die-off). At higher temperatures, more momentous events may follow. 

Figure 5: Risks escalate above 1.5°C warming (°C)

Source: Science, September 9, 2022.15

The environmental view: Rick Stathers, climate lead, Aviva Investors

Climate, biodiversity and human health are interdependent, but we face a temperature and resource-use overshoot that will impact our collective ability to thrive. Major threats range from life-threatening heat and floods to land degradation and challenges to food and water supply. These are material issues, with powerful social consequences. 

Climate risks do not increase linearly; in a three-degrees world we will face much greater challenges than a 1.5-degrees world. The prospect of climate tipping points is real, but not well understood. The latest IPCC report suggests they could occur at lower temperatures than previously forecast, which may accelerate global heating and push ecosystems and species to limits at which they cannot adapt. These radical ecosystem changes and associated extinctions raise serious questions about what it means to live sustainably.

We need to ensure the equitable use of planetary resources for tomorrow’s generations to thrive. Investors also need to be mindful that overconsumption presents specific risks for those seeking returns over long timescales. Are the companies in which we invest today, and the economies on which they depend, going to remain viable in a more hostile, less-abundant future?

Radical policy action is needed to ensure mindful resource use and align finance to a sustainable future. This is going to be an enormous challenge – how will we decouple resource consumption from economic growth at the pace and scale needed? Will we be able to regenerate depleted natural systems while continuing to “grow”?

We believe investing in companies that reduce human impacts on nature presents opportunities to enhance the environment and reap solid returns. There are also ways investors can enhance resilience by investing in companies whose products and services will help communities prepare for the future (read more in Climate adaptation and resilience: Preparing for a warmer, wilder world).16 But being effective requires a complete change in mindset. Linear thinking will not deliver over the long term; circular, regenerative, sufficiency thinking will.

Figure 6: From degenerative to regenerative design

From degenerative to regenerative design

Source: Beyond Social, 2020.17

The natural capital view: Jonathan Toub, portfolio manager on the Aviva Investors Natural Capital Transition Global Equity strategy

Governments, companies, media, investors – everyone has a role to play in helping people understand how much we are overconsuming resources. It seems unlikely society will voluntarily push for a reduction in consumption, which is what we need. Failing that, the next best option is to provide a framework to limit the damage caused to the environment by our society’s desire to consume, encouraging the re-use, recycling and recovery of finite resources.

Unfortunately, I doubt the stabilisation of resource use (Figure 1) reflects a step-change in behaviour. While more people appreciate the need for a circular economy, and incentives to encourage the shift towards greener alternatives are increasing, it is still far more likely to be the result of the current economic slowdown.

Nevertheless, making that shift from linear to cyclical consumption requires a radical change in approach to supply-chain management. It tilts us towards companies like aluminium can manufacturers. The great thing about aluminium is that it is infinitely recyclable. Producing cans from recycled materials uses only five per cent of the energy required to manufacture from virgin bauxite, and we can also avoid many of the collection, sorting and depolymerisation issues involved in recycling common plastics. We see a structural benefit that will drive increased penetration as a packaging solution and strong long-term growth in demand.

Addressing our overreliance on plastics is a huge challenge. We want to invest in companies that can address the issue with a longer-term perspective, rather than recycling plastic into short-life, non-circular products. For example, we are not positive on fashion companies recycling PET (polyethylene terephthalate) bottles to make garments; this converts the plastic into an even harder-to-recycle product, merely offering a short-term delay its inevitable journey to landfill.

We prefer solutions like those offered by US company Trex, the largest collector of waste plastic film, bags and wraps gathered through a network of more than 32,000 stores and retail partners in North America, which it converts into composite decking using 95 per cent reclaimed and recycled materials. This results in a superior, more durable, lower maintenance and recyclable product that lasts 20 to 30 years, compared to around ten years for traditional wooden decking.

Global opportunities around waste collection and management are significant. Many of the large fast-moving consumer goods companies (FMCGs) have ambitious targets around plastic recycling and use of recycled materials, and they will need to find solutions across their global footprint. This is not easy in many developing markets where the infrastructure is immature or absent. We see this in Brazil, where this situation is creating opportunities for innovators like Ambipar. It specialises in partnering with these companies to provide solutions to local difficulties. 

Other areas that need to be addressed urgently are food and water security, as we expect populations to continue to grow in the face of global warming-driven environmental stress points and natural disasters. Combine this with evidence of significant soil degradation, and one must question our ability to grow enough protein to support the world without material dietary changes or innovative solutions. The other factor is that global food chains are not efficient; around 30 per cent of the food produced globally goes to waste, which is not sustainable.  

We expect significant opportunities in sustainable agriculture. These range from solutions around precision agriculture, allowing farmers to reduce excessive use of expensive and damaging pesticides and fertilisers, supported by better mapping and monitoring equipment and software. It also extends to environmentally friendly, yield-enhancing soil nutrients, as well as indoor vertical farming and land-based aquaculture. These solutions result in produce close to end markets and protect fragile ecosystems by extension. We also expect greater focus on product from waste, as companies like Darling Ingredients recycle cow carcases into biodiesel and pet food. We are even starting to see the emergence of biodiversity credits generated from land restoration and preservation.

The fact we consume around 1.7 times what our planet can sustainably provide each year should be an important call for action, but this predicament is not universally understood. Changing that quickly is in everyone’s interest.

The climate transition view: Andrea Carzana, senior portfolio manager on the Aviva Investors Climate Transition Global Equity strategy

A belief persists resources are unlimited; that we will unlock untapped resources or develop new ways to make resources stretch. Our view is different.

There is a danger we collectively run resources down to such a point certain companies will find their businesses models compromised or even completely broken. We are investing in companies that appreciate the risks and intend to improve productivity. Understanding this should underpin their ability to generate long-term returns.

The areas where there is obvious scope for productivity and earnings improvement include materials, industrials and IT. In materials, we seek companies that will deliver the raw materials and services to achieve net zero. Commodities like copper and other rare earths will be particularly important.

We know the volume of materials needed to electrify the world is vast. Clearly there is a productivity issue for mining companies; the depletion of each seam of ore means the miner is likely to get less raw material for each unit it mines.

We know the value of the inputs, and now see electric-vehicle companies trying to insource and create vertically integrated companies, buying their own mines to access the materials needed to make batteries. These companies are thinking: “If we want to survive and materials are scarce, we may need to access those commodities directly.”

We also see opportunities in industrials. Companies like Linde, which supplies industrial gases to end-users from heavy industry to hospitals, are heavy energy users but have the potential to improve the environmental performance of many of their customers. It supplies established industries but is also venturing into green hydrogen and carbon capture.

Another area consuming a vast amount of resource is IT. We need more chips, we need water to make them, we need energy to run the infrastructure, we need everything to digitalise. Whatever gets digitalised gets dematerialised, which means you need fewer resources overall, but digitalisation is intensive as a process. It could be the next big lever to pull, given how large that sector is becoming.

The big unknown is the human population. Global growth is beginning to slow, and two thirds of the world’s population now live in low fertility zones. This does not detract from the fact humanity is collectively drawing down resources too fast, with detrimental impacts.


  1. “The Sustainable Development Agenda”, United Nations Sustainable Development Goals, 2023.
  2. Current policy trajectory (“Real World Action”) estimated by Carbon Action Tracker (2022) at +2.2 degrees C to +3.4 degrees C by 2100. Carbon data excludes emissions from military sources. See “Massive gas expansion risks overtaking positive climate policies”, Climate Action Tracker, November 10, 2022.
  3. “Earth Overshoot Day 1971 – 2023”, Earth Overshoot, 2023
  4. “Planetary boundaries”, Stockholm Resilience Centre, 2022. Based on analysis in Persson, et al., 2022 and Steffen, et al., 2015.
  5. “A tale of humanity and habitability”, GLOBAÏA, 2023.
  6. Hoesung Lee, et al., “Synthesis report of the IPCC Sixth Assessment Report (AR6)”, IPCC, 2023.
  7. Chi Xu, et al., “Future of the human climate niche”, PNAS, Vol. 117, No. 21, May 4, 2020.
  8. “A tale of humanity and habitability”, GLOBAÏA, 2023.
  9. Paolo Agnolucci, “Impacts of rising temperatures and farm management practices on global yields of 18 crops”, Nature Food, 1, 562-571, September 15, 2020.
  10. Hoesung Lee, et al., “Synthesis report of the IPCC Sixth Assessment Report (AR6)”, IPCC, 2023.
  11. “The CAT Thermometer”, Climate Action Tracker, November 2022.
  12. Hoesung Lee, et al., “Synthesis report of the IPCC Sixth Assessment Report (AR6)”, IPCC, 2023.
  13. Ralf Seppelt, et al., “Agriculture and food security under a changing climate: An underestimated challenge”, iScience, November 10, 2022, 25(12), 105551.
  14. “The CAT Thermometer”, Climate Action Tracker, November 2022.
  15. David Armstrong McKay, et al., “Exceeding 1.5°C global warming could trigger multiple climate tipping points”, Science, Vol. 377, No. 6611, September 9, 2022.
  16. “Climate adaptation and resilience: Preparing for a warmer, wilder world”, Aviva Investors, March 22, 2023. 
  17. “Regenerative economy”, Beyond Social, November 17, 2020.

Related views

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