Economic pathways
I’ve written before about the monetary system, the implications of placing the economy far above the two other pillars of sustainable thinking, society and the environment. Reshaping our economic thinking, one fit for the complexity of our present challenges, is a huge opportunity. It is an opportunity like no other — galvanising global wealth to support a rapid transitional phase, one centred around a common output that ensures the life-carrying capabilities of our planetary systems.
At the cusp of this current thinking new economic models are being offered as options, Doughnut Economics, Circular Economies and Degrowth pathways for example. Whether you agree with these models or not, the importance of them lies not solely with their potential, but also in the space that they create for wider discussion. Our present system, extractive and explotative, can no longer sustain humanity for the future. Change is inevitable.
The fact that international financial institutions are still investing in fossil fuel projects and infrastructure, show how little portfolio managers understand the enormity of the risks and challenges faced by humanity. Driving the increase of carbon emissions through these investments does nothing to align institutional goals to the Paris Agreement. In an open letter, three climate ministers have asked for better alignment, linking banking investments to climate action in return for ensuring the retention of their creditor status and rating.
To achieve these ambitions, fund managers, investors, and everyone in international financial institutions, must be empowered to understand the risks, current severity, future projections and possible pathways forwards. I browse through LinkedIn and read the comments from those sharing the image below, still not seen or understood by so many professionals, across so many different sectors. This is the greatest current risk. It has not been factored in, an inertia across the system caused by the difference between an individuals’ knowledge and our present shared trajectory.
According to this recent report by McKinsey Sustainability, investment in a green transition is increasing rapidly, and to some degree weathering macro-economic pressures. My conversations with others though continues to present a mixed-bag when delivering on the transition. For example, a recent conversation with a ‘transformational finance’ consultant from one of the big-four consultancies, showed a big disconnect in their work and our present needs. Their work collected data applicable to climate targets, yet the client need for this data is not the driving force behind the changes. The data has no ‘home’ without any external reporting frameworks in place. The legislative reporting requirement is just not there for them to worry yet.
We are approaching climate change tipping points, places in our Earth-systems where either positive or negative feedback loops come into play. The risks associated with these, in economic or any other terms, are dramatic, potentially catastrophic for some parts of our planet, and we don’t fully understand how these will play out. Getting to grips with financing a green transition needs significant work, and a rapid increase in our collective efforts.
If you like this article, please give it a clap — you can clap up to 50 times! I write irregularly but around every couple of weeks or so, follow me to be notified when I do. I’m a artist, activist and sustainability guide, building a new life in Portugal and growing trees. See more of my sustainability work at https://futurecologic.co.uk/. To support my work as an artist, visit — https://www.patreon.com/Postcards_from_Portugal or buy me a coffee https://www.buymeacoffee.com/GClaws. Thanks for reading, hope you enjoy it, and get the conversation started below if you fancy.
