Rethink° January
Our January's rethinking on growth, shareholder activism and more. Let's get going.
Dear all,
The economy is based on the idea that it needs to keep growing to sustain itself. But is that narrative worthwhile? A recent publication in Nature has a different take, and that’s how we get started with this issue.
Degrowth can work — here’s how science can help
📰 Teaser: The global economy is structured around growth — the idea that firms, industries and nations must increase production every year, regardless of whether it is needed. This dynamic is driving climate change and ecological breakdown. High-income economies, and the corporations and wealthy classes that dominate them, are mainly responsible for this problem and consume energy and materials at unsustainable rate… → continue reading (12 min) …
Moritz’s two cents: Degrowth, for me, is getting our priorities right. Why have more stuff if we can enjoy life instead? I was very happy to find this article by some of the most renowned scientists in the field of Nature and enjoyed reading it.
Will shareholder activism change the mining giant Glencore?
📰 Teaser: Glencore investors have moved to force greater disclosure on its coal production plans, as the world’s most profitable miner of the fossil fuel faces questions over its climate impact. A group of shareholders, including Legal & General Investment Management and HSBC Asset Management, has filed a resolution calling for detail on the matter, which will go to vote at Glencore’s annual meeting in May.→ continue reading (3 min) …
Linking to the Google Search so that the paywall won’t stop you 😉
Moritz’s two cents: Glencore is the largest global mining company mining all kinds of materials, including coal. So they are, by their business model, a laggard when it comes to climate change mitigation. It is good to see that their owners are now at least starting to take action through their voices as shareholders. Let’s hope it will not be the last time they raised their voice.
ESG Is Not Impact Investing and Impact Investing Is Not ESG
📰 Teaser: If you find yourself using the terms ESG and impact investing interchangeably, you’re not alone. It is common to conflate the two terms even among finance professionals. However, clear and commonly shared definitions of ESG and impact investing are required to enable informed discussions and to help channel funds appropriately toward achieving the SDGs and climate transition. → continue reading (6 min) …
Max’s two cents: ESG is a risk management framework developed to broaden the scope of systematically-considered, financially material risk factors in an investment decision. Impact investing is an investment strategy with some form of a non-financial impact as its primary objective and financial return only as an enabling factor. Let’s be specific and not conflate different concepts for the sake of simplistic marketing speak!
Can we rewrite the rules of green finance quickly enough?
📰 Teaser: The use of ESG analysis in investment decision-making is still routinely conflated with the measurement of sustainable outcomes. We need a sharper lens. → continue reading (3 min) …
Max’s two cents: We ought to remember the fundamental purpose of financial systems is to enable optimal resource allocation across space and time for human well-being, if not flourishing. The transition toward alignment of financial flows with achieving a climate-positive and socially inclusive future relies on mainstreaming an impact investing lens. It is based on values, rigorous impact measurements, positive visions, and narratives about the future.
Ecuador Tried to Curb Drilling and Protect the Amazon. The Opposite Happened.
📰 Teaser: A novel idea to leave the country’s vast oil reserves in the ground fizzled for lack of international support. Now, struggling under painful debt, the government wants to expand drilling in the rainforest. → continue reading (8 min) …
Max’s two cents: Aside from the yet-to-be-launched facility on climate reparations, as agreed on during COP26 in Egypt, there are easier, less political, and yet effective methods to support less carbon-intensive development in low- and medium-income countries, such as Ecuador. Let’s hope the idea is picked up again, as we currently see a new bonanza of oil and gas explorations from the artic to western and central Africa.
Not yet enough? Here are some evergreens and recent content we came across:
🪙 Moritz analysis how sustainable crypto is in this article on coindex (in German)
🤑 This TED talk presents a good argument for a better redistribution of wealth
🗞️ The ESG on a Sunday newsletter is for everyone who wants to keep up with developments in sustainable finance
🌍 Planet Critical is an excellent podcast for everyone who is into changing the world
🐼 The WWF and S&P Global presented a biodiversity risk management tool for corporations and financial institutions
🪆 The Financial Times published an investigation on the role of prominent legal firms that help the Wagner Group evade sanctions
👀 The Economist has an article on open-source intelligence and how it changes the war in Ukraine and beyond
🤖 A16Z, a renowned venture capital firm in the U.S., analyzed the economics of generative AI business models, such as ChatGPT
Leaving you with a quote at the end of the first issue:
You came across something we might want to read/listen/watch? Send it to us or leave a comment.
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All the best, and keep rethinking