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Finance for Sustainability Bard MBA in Sustainability Launch Event January 24, 2012. http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg. - PowerPoint PPT PresentationTRANSCRIPT
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Finance for SustainabilityBard MBA in Sustainability Launch Event
January 24, 2012
1. Our UNSUSTAINABLE economic system 1. Our UNSUSTAINABLE economic system
“Safe Operating Space” -- The world is full
“Safe Operating Space” - National Center for Ecological Analysis and Synthesis
Symptom: Increasing Wealth Inequality
http://www.inhabitat.com/2010/10/14/worlds-largest-and-most-expensive-family-home-completed/
Wealth Disparity:•2% of population Controls > ½ the World’s Wealth•50% of population controls < 1% of World’s Wealth•Income gaps between rich and poor > 2X in last 50 years Spain
Denmark
Norway
Finland
Sweden
Netherlands
SwitzerlandBelgium
Germany
Austria France
Canada Italy
Australia
Ireland
Greece
New Zealand
UK
Portugal
Japan
USA
Better
Low Wealth Gap
Wel
lbei
ng
Worse
High
Wilkinson & Pickett, The Spirit Level (2009)
Wealth Gap vs. Wellbeing
2. How we got here 2. How we got here
Our economy has become an anti-economy, a financial system without a sound economic basis and without economic virtues.
- Wendell
Berry
Economic Efficiency
Economy
Finance
What’s wrong with this picture?Desired Outcome
PlanetPlanet
The most important chart
in the world…
Sustainability Optimum
Efficiency
100%
0%
Resilience
Source: Lietaer, Ulanowicz, Goerner 2008
Sustainability in Natural Systems
Collapse of Financial System
Collapse of Financial System
3. Finance: Critical acupuncture point 3. Finance: Critical acupuncture point
Sustainable finance: bottoms up Sustainable finance: bottoms up
• Internalize externalities - CSR, ESG
• New tools - Integrated
reporting• New (and old) ideas
- Impact investment
Sustainable finance: top down (systemic) Sustainable finance: top down (systemic)
We are lost in finance…
• What is an “IRR” when we know everything is connected
• What will replace MPT which sees risk as historical SD in a world facing “phase shift” uncertainty?
Stranded Assets: our $20 T “Big Choice” 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 choice
Source: “Unburnable Carbon”, Carbon Tracker Report
Resiliency: Driving financial capital upstream
http://3.bp.blogspot.com
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upstream.jpg
