This month’s Conscious Capitalism In The News: EU approves single-use plastic ban, 6 Quick reads to increase your understanding of conscious capitalism, Transparency in tracking impact needed to grow impact investing, and more…
The End of Capitalism is Already Starting – “Americans are getting closer and closer to understanding that they live in an economic system that is not working for them, and will not work for their kids.”
Greed vs Green – Can We Ever Get Along? – “Is it possible to run a capitalist economy without threatening the future of the planet?”
What is Conscious Capitalism? – “Conscious Capitalism is the emerging integration between awareness and capitalism.”
After Over a Decade of Conscious Capitalism, What Have We Learned? – “CEOs must learn that focusing only on the self-interest benefits they provide too often fails to gain them legitimacy and doesn’t win over the hearts of their customers and employees.”
Conscious Capitalists Will Win the Long Game – “Is conscious capitalism profitable? In a simple answer, yes.”
Singapore Strikes the Balance Between Capitalism and Welfare – “Singapore in the second freest economy in the world…but Singapore still considers itself a welfare state, which means the state’s top priority in the socio-economic wellbeing of the people.”
The European Commission had proposed a ban in May after a surge of public support, perhaps attributed to documentaries such as David Attenborough’s BBC Blue Planet series. The measure is expected to go through once it clears some procedural hurdles. The EU hopes it will go into effect by 2021.
What’s In The Ban?
- Single-use plastic items (which make up over 70% of marine litter) such as plates, cutlery, straws, balloon sticks or cotton buds.
- Products made of oxo-degradable plastics, such as bags or packaging and fast-food containers made of expanded polystyrene.
Reduction Targets for Non-Banned Plastics
Plastics for which no alternative exists, will have to be reduced by member states by at least 25% by 2025.
- Single-use burger boxes, sandwich boxes or food containers for fruits, vegetables, desserts or ice creams.
- Beverage bottles will have to be collected separately and recycled at a rate of 90% by 2025.
- Cigarette filters containing plastic would have to be reduced by 50% by 2025 and 80% by 2030. Tobacco companies must cover the costs of collection including transport and treatment.
- Fishing gear containing plastic which is lost or abandoned must be reduced by 50% each year with a recycling target of at least 15% by 2025. Fishing gear companies must cover the costs of collection including transport and treatment.
We have adopted the most ambitious legislation against single-use plastics. It is up to us now to stay the course in the upcoming negotiations with the Council, due to start as early as November. – Frédérique Ries (ALDE, BE), Rapporteur.
5 Founding Sustainable Stock Exchanges Receive Groundbreaking Award – United Nations Conference on Trade and Development
At the 2012 Global Dialogue meeting in Rio De Janeiro, five stock exchanges made a public commitment to the United Nations to promote sustainable investment, and improved ESG disclosure and performance among companies listed in their markets over the long-term..
These 5 became the founding 5 partner exchanges of the Sustainable Stock Exchanges (SSE) initiative – B3 (Brazil), The Egyptian Exchange, Johannesburg Stock Exchange, Borsa Istanbul and Nasdaq. On October 23, at the World Investment Forum in Geneva, these 5 founding exchanges were awarded with the first-ever SSE Ground-Breaker Award for their commitment to sustainable development.
James Zhan, Director of Investment and Enterprise of UNCTAD said that when he walked into the meeting room that day in Rio in 2012, where these first five exchanges were about to announce their commitment, he turned to colleagues, and asked:
Do you think any other exchanges will commit after these five?”
Zahn says that, today, most of the world’s exchanges are SSE Partner Exchanges, 78 and counting.
The impact investing market expanded fivefold between 2013 and 2017, reaching $228 billion globally last year. But asset managers make-up only about 25% of the market today. The rest is made up of development financial institutions and specialist fund managers. Meanwhile, institutional investors hold around $100 trillion in assets under management. The impact investing market needs more institutional investors to be able to grow.
How can asset managers draw institutional investors in?
Asset managers are at a disadvantage because there isn’t a set of guiding principles defining exactly what is and what is not an “impact” investment in order to draw these investors into the marketplace. There needs to be more transparency defining impact investing in order to give institutional investors more of a reason to invest for impact.
To address this challenge, the International Finance Corporation ( IFC) has been developing Investing for Impact: Operating Principles for Impact Management to establish a common discipline and market consensus around the management of investments for impact.
Bringing impact investing further into the mainstream would accelerate the achievement of the UN’s the Sustainable Development Goals (SDGs) to make sure we leave a better planet for future generations.
IFC is calling on institutional investors, asset managers, companies, governments and civil society to join them in shaping a credible set of principles. IFC is inviting additional reviews of Investing for Impact: Operating Principles for Impact Management through the end of December 2018.
You can access their review form here to participate.
Citizens, pension holders, and shareholders can demand that their assets are managed for their future as well as for society’s benefit.
In 2017, almost half of investor households reported preferring an environmental and socially responsible approach to investing. This figure jumps to 64% for investors ages 30 to 39, and 67% for those under 30.
But according to Ed Louis, a senior analyst at Cerulli, while asset managers are actively working to develop and launch environmental, social, and governance (ESG) products for client portfolios, advisors are dragging their feet.
- Advisors fear that ESG factors will negatively affect performance.
- Advisors fear that ESG and SRI factors do not provide necessary performance.
Asset managers recognize that increasing advisor adoption is a long-term project. They also see the need for continued education that extends beyond the advisor to the end-investors.
Providing advisors with materials that can be used to educate clients about a firm’s approach to ESG is crucial in increasing advisor adoption. – Ed Louis, Senior analyst at Cerulli.
Socialsuite, a global leader in Impact Measurement Software, has recently announced the launch of its Impact Investing Solution. The software will allow banks, superannuation/pension funds, foundations, governments and impact investors to design their own impact measurement framework, or leverage established evidence-based metrics from renown sources such as GIIN, MSCI ESG and United Nations’ Sustainable Development Goals (SDGs.)
Socialsuite claims that its technology can:
- Provide visibility to fund managers and key stakeholders on how their impact investments are tracking
- Help to target a fund’s investments to areas with maximum social impact
- Provide asset managers and investors with access to reliable impact data and reporting at all times
- Provide investors with a standardized way of measuring their impact, using accepted metrics
- Streamline the way impact is analyzed – filtered by geography, grantee sector and type
- Provide Boards and investors with full visibility on the social impact achieved
Investors can align their portfolio investment areas with their impact reporting goals, and start collecting impact data that feeds into these goals. They can also generate a Social Return on Investment score to find out how much social value has been generated based on their dollar inputs. This information can then be shared on dashboards with investors, stakeholders and fund managers as part of a broader portfolio reporting.
Our vision is a future where organisations use technology to report impact as effectively as financial performance. We see the launch of the impact investing solution as an important step in our vision – Brad Gurrie, CEO Socialsuite.