Ethical investors can’t ignore Black Friday’s dirty footprint

by | Nov 25, 2022

Written by Miranda Beacham, Head of ESG for Equities and Multi Asset at Aegon Asset Management

Black Friday has created an annual consumer purchasing frenzy, with people trying to snap up bargains ahead of Christmas. But what is the environmental impact of this mass consumerism?

A study by University of Leeds and the Green Alliance in 2019 discovered that 80% of products purchased end up in Landfill, incinerated or recycled poorly, sometimes after only a couple of uses – and in fact only around 20% of electronic waste is recycled at all. This is an obvious negative for the environment.

This doesn’t take into account the resources used in the manufacturing of these goods and the fuel/emissions in the shipping. Estimations based on the number of purchases in 2021 and size of delivery boxes led to the conclusion that the 2021 Black Friday generated 386,243 tonnes of carbon into the atmosphere on delivery alone. That is roughly equivalent to the same amount of carbon as driving an average petrol car for 958,734,522 miles.

If the environmental impact is not enough to give pause for thought when you are hovering with your credit card, how about the Which? report that has been released recently that monitored over 200 deals on leading UK sites and discovered that not only were 98% of the discounts advertised available at the same price or cheaper in the 6 months following Black Friday, 86% were actually the same price or cheaper in the 6 months before as well. So maybe not such good deals after all!

So why should care about this as investors?

By managing our sustainable range of funds, we are looking for ways to solve some of these sustainable challenges facing the planet today. We can’t do much to influence consumer spending, but we can invest in solutions that will tackle the issues of more sustainable manufacturing, packaging, transporting and waste management. We have an array of these kinds of companies in the portfolios – from manufacturers concentrating on reducing water usage and using recycled fibres to a packaging company that has achieved 100% reusable or recyclable products and waste management solutions that have efficient recycling rates.

We don’t believe there must be a trade-off between returns and ensuring that our planet survives. A more circular economy can work on behalf of more than just shareholders, it can hugely benefit the bottom line too. The ability to use resources more efficiently allows us not only to address resource scarcity, waste issues and the associated negative impacts, but it will incentivise innovation and modernisation.

So, if you must spend on Black Friday – take a pause and think of the impact on your pocket and the environment.

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