Values are back...

...and don’t just take my word for it.

Stephen Haddrill of the ABI highlighted this to investors.

An appeal to values is heard in the wider debates about the crisis and the way forward. Prime Ministers Brown and Rudd debated, in the words of the former, ‘a world of shared global rules founded on shared global values’ on the eve of the London Summit.

The disjuncture caused by the current crisis has forced many to reflect critically on the values which underpin the system and form the basis of trust.

Values clearly matter – our judgements and decisions on how to act and live are based on them. Our economic and social systems require them as a foundation stone for building trust and confidence.

These themes are discussed in an excellent piece by Amartya Sen, ‘Capitalism Beyond the Crisis’ in which he challenges the proponents of a ‘New Capitalism’ such as Sarkozy and demands a new understanding of older ideas. He invokes the work of Adam Smith to explain how the crisis is partly generated by an overestimation of the wisdom of market processes and exacerbated by anxiety and lack of trust (see also ‘Adam Smith’s market never stood alone’).

I am hopeful that we can, in Sen’s words, ‘go beyond short-term solutions and contribute to producing a more decent economic world’ with greater regard given to the long term social and environmental impacts of our action.

Did the London Summit do enough to deliver a sustainable recovery?

NGO responses vary. Oxfam's Duncan Green is “unusually optimistic” but Friends of the Earth are not. The ‘Put People First’ coalition reflects that mix of views.

Personally, I homed in on paragraphs 21 and 27 of the G20 communiqué.

First, Paragraph 27. It reads “We agreed to make the best possible use of investment funded by fiscal stimulus programmes towards the goal of building a resilient, sustainable, and green recovery. We will make the transition towards clean, innovative, resource efficient, low carbon technologies and infrastructure. We encourage the MDBs to contribute fully to the achievement of this objective. We will identify and work together on further measures to build sustainable economies.”.

While short on specifics, this sets a collective goal against which the G20 can be judged when it meets again later in the year. It gives a good basis for investors to engage further with governments and development banks in the coming weeks.

Paragraph 21 is more intriguing. It says “..we agreed on the desirability of a new global consensus on the key values and principles that will promote sustainable economic activity. We support discussion on such a charter for sustainable economic activity with a view to further discussion at our next meeting. We take note of the work started in other fora in this regard and look forward to further discussion of this charter for sustainable economic activity.”

Could this be the start of a genuine debate?

Is it the first step of a global transition from GDP towards new measures of prosperity? And towards the new approach to incentives, rules and policies that would follow this shift?

So, overall, I would say – “the jury’s still out”. The direction of travel is positive, but there is still much to do. Policy makers need to deliver not just an effective global banking system but also a major economic transition, including sustainable capital markets for long-term responsible investment. The G20 has only started the process of delivering a sustainable recovery and, by their next summit later in the year, further major milestones need to have been reached.

Investors call for 'green' focus in economic recovery measures

A group of major investors, representing over £400bn in funds under management, has today written to Gordon Brown, as Chair of the London Summit, supporting a strong ‘green’ element in programmes of fiscal stimulus undertaken by government.

The initiative was convened by UKSIF and Tomorrow’s Company.

UKSIF joins with global partners to demand green action from G20

UKSIF has joined with our sister organisations across the globe to send a message to world leaders meeting in London tomorrow to address the global financial and economic crisis.

Our statement outlines measures that world leaders can take to drive the transition to a low-carbon, resource efficient and socially sustainable economy.

This is the first time since the Earth Summit in 1992 that the global network of sustainable and responsible finance organisations has issued a collective statement.

Put People First - the role of sustainable finance

Over the weekend, I read the policy platform produced by Put People First – the civil society coalition formed in advance of the London Summit.

I was really struck by its strong focus on sustainable investment and finance.

In seeking greater ‘democratic governance of the economy’, the platform calls for financial regulation that promotes long term sustainable investment over ‘damaging’ investment and for investors to sign up to the UNPRI. It recommends to the UK government that environmental, social and governance impacts be included in stock market listing and corporate reporting requirements.

In making the case for a ‘green new deal’, Put People First identifies green financing as an area for job creation and recognises the need to incentivise ‘private savings and pensions…to be at the heart of funding a green new deal’.

The prominence given to sustainable finance is significant, whether or not you agree with the analysis and recommendations.

It reflects an increasing focus on capital markets amongst NGO and trade union campaigners (something that I suspect is here to stay). It also, perhaps, shows that civil society groups are developing a better understanding of capital markets, the role of investors and of the enabling possibilities of sustainable finance.

To my mind this is to be welcomed. If the interaction between civil society and the City is constructive, albeit critical, and built on common understanding, the possibility grows that tomorrow’s financial services regime will enable the transition to a low carbon economy and address the looming climate and resources crunch.

Can we transform our economy from a forward-moving aeroplane to a hovering helicopter without crashing?

This question is from a series of articles about the troubles that lie ahead for the global economy published in the New Scientist last October. The graphic image it conjures up seems to capture the challenge humanity faces this century. Avoiding a crash will be tricky!

The New Scientist elegantly shows that despite technological advances we’re rapidly overshooting our planet’s carrying capacity: the average person is still consuming more of the planet’s resources every decade and we are currently increasing our global population by over 200,000 people a day. Ecologists know that if this continues our population will collapse.

However, the New Scientist offers its readers an optimistic scenario for 2020 based on a "steady-state" economy that is thriving within ecological and political limits set by science and society. There are clues in the scenario about how we’ll get from here to there, but not about how the social and political will to change developed so quickly.

Will the leaders of the G20 nations focus on patching up and redesigning the aeroplane? Or will they take the opportunity the current crisis provides and create genuinely sustainable recovery? As Prince Charles said recently "any difficulties which the world faces today will be as nothing compared to the full effects which global warming will have on the world-wide economy".