Vision: a world in which finance serves a just, resilient, and sustainable economic system.Reform and Transform the financial systemMission: A think-tank committed to stimulating the interaction and action of leaders, scholars, and society by raising awareness of the need to harness the power of capital and markets to advance a just, resilient, and sustainable economic system that will improve lives and preserve our planet’s life support systems.
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Redesigning Finance:Pathways to a Resilient Future San Francisco, CA August 9, 2012 http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg
1. Context:Not your grandmother’s SRI/ESG talk2. Long View Implications for Investors:This time IS different3. Public Policy Implications:Not for today
Anyone who believesexponential growth can go onforever in a finite world is eithera madman or an economist. - Kenneth Boulding , Economist, Quaker, Co-Creator of General Systems Theor y
The most powerful force in theuniverse is compound interest. - AlbertEinstein*
Stranded Assets: our $20 T “Big Choice” • 2 degree warming limit: 565 GtC02 • “Proved Reserves” have 5X this amount • 74% owned by States, 24% by companies At current market value, $20 trillion choiceSource: Potsdam Institute and “Unburnable Carbon”, Carbon Tracker Report
Ecological overshoot = Financial Overshoot What’s the off balance sheet ecological debt? What’s the P/E of a “steady state” economy? What’s the debt capacity of the steady state? What’s the unfunded pension liability of a SS? The sustainable payout of a SS endowment?
Financial reform: Rearranging deckchairs May 26, 2011
1. Context:Not your grandmother’s SRI/ESG talk2. Long View Implications for Investors:This time IS different
Towards a Regenerative Economy• Holistic frame: nature as model• Redefine wealth: natural/social capital• The humble retreat of finance• Public interest in capital investment: All investment has IMPACT
What’s different this time • Schumpeter’s “creative destruction” on steroids • MPT built on flawed assumptions • Index benchmarking and tracking strategies exposed • Diversification often a mirage
Investment principles for theAnthropocene • Long run versus trading • Reassert owner responsibility: Active concentrated ownership of resilient cash flow/dividends • Diversify systemic risks across asset classes
5 Investment themes for the Anthropocene 1. Low carbon energy infrastructure - $100 Trillion over 20 years 2. Regenerative enterprise 3. Technology 4. Emerging markets 5. Distress/opportunistic
“It’s all a question of story. We are in trouble nowbecause we do not have a good story.” - Thomas Berry
Investment is the bridge to the economywe need. And the steering wheel. We are called to be the architects of the future, not its victims. - R. Buckminster Fuller