Posted on 15 November 2019 by Juan Ocampo
The views expressed in this publication are those of the authors and do not necessarily represent those of the Agenda 2030 Graduate School or Lund University. The present document is being issued without formal editing.
Last week I attended the event: “Collaboration for sustainability – how to move forward?” hosted by the Sustainability Forum and the Sustainable Future Hub at Lund University. Since my last post I have been thinking about how to govern complex processes of financial inclusion, so I came to this event in hopes for the final “answer”. Spoiler, I didn’t find a final answer, but a very good one I must admit.
In my last week’s post I finished by pointing at three important discussions. Two of which I want to bring back today. As part of my quest to understand the ruling paradigms and powers around financial inclusion and alternative monetary models I found myself immersed in Financial Markets. Here, I believe, is where the “BIG players” are taking the decisions that define our future through the investments they make. As you might know, monetary policy in many countries is influenced by how “Wall Street” acts (or reacts) to different policies or events. To make this a little more tangible, imagine how much influence organizations such as Japan’s Government Pension Investment Fund (GPIF), which manages assets of around USD $159,215 billion (as of 2018) or Goldman Sachs, which managed around USD 933 Billion (as of 2018), could have if they decided to move relevant amount of their investments to companies that comply to high standards of sustainability. Some could question if they really have the power to influence policy making, and I will recommend you to watch the movie “Too Big To Fail” so you get an idea of how much power and influence Banks have.
Some of the most important actors in investment banking were in the Bloomberg Business Forum talking about climate change and sustainability. Even though I have been following these conversations just recently, for what I understand having this topic (i.e. sustainability) on the agenda is definitely an advance in getting sustainability in the “Game”. There are many interesting takeaways of this forum, but I want to highlight one point of a panel in which Denis Duverne (AXA), David Solomon (Goldman Sachs), and Hiro Mizuno (GPIF) participated. Through their discussion, they reflected on the need for more transparent information about their asset’s environmental impacts. Solomon’s answer: “we are working on it…. but the answer is we are working on it”. However, he later suggested the need for a clearer government climate policy framework that sets the guidelines and standards for the data companies as well as disclosing their climate impact.
So, I want to come back again to my initial question and its relation to the event “Collaboration for sustainability – how to move forward?”. As the title of the event hints, the discussion focused on collaboration and how to achieve this by including different stakeholders. The key speakers came from The International Institute for Industrial Environmental Economics (IIIEE), Sustainable Plastics and Transition Pathways and Venture Lab. Per Mickwitz from IIIEE gave an interesting perspective on how different agendas need to include small actors if they want to have relevant and impactful collaborations. It was a perfect moment to find the answer to my governance reflections, so I asked him: “How can we get citizens’ points of view in discussions where the interests of the big and smaller actors are not necessarily aligned? Well, he gave a good answer to quite a complex question. Transparency and communication. This might seem quite obvious, and that is why I brought the Bloomberg Business Forum to the discussion. How much transparency can actors (e.g Goldman Sachs) immersed in the current economic paradigm allow? What are the incentives for organizations that are locked in a system they created to transform into a more sustainable paradigm and allow small actors into the conversation? I still don’t have the answer but if like me you find these question relevant there is going to be an interesting workshop about “The capital market – a driving force in the transformation towards sustainable businesses?” hosted by the Sustainability Hub at LUSEM that I hope will bring some interesting perspectives.
Let’s wrap up. Governance of complex processes (e.g. monetary policy) includes many stakeholders, all of them with different and even conflicting interests. The incentives for some of the big players to “buy into” the sustainability paradigm are not very clear, and thus governments might need to develop adequate accountability frameworks to re-frame the current incentives. But then how can people that are not at this level of conversation get heard? It is not clear yet, but transparency and communication together might be a way to go. Perhaps complementary currencies could be useful to explore this idea of transparency and communication. But can money have agency? This is a relevant question to look at and believe me, I am working on it.
Inspired by these reflections, in my next post I will get a little bit more into the topic of financial inclusion and try to connect some of the thoughts I have been working on lately, specifically in regard to digital money and blockchain. By the way, if you find my posts interesting I have a personal blog in which I get a little more into complementary currencies from an organizational perspective and other topics I feel relevant to reflect on, so feel free to join the conversation there as well!