Today’s post is by our Founder, Dr. Domenico Lepore.
So, BlackRock decides that Climate Change is a threat to their portfolio (See ‘BlackRock Shakes Up Business to Focus on Sustainable Business’ (Blackrock has $7 trillion in assets under management), HBR goes Gaga about it and, all of sudden, the name of the game becomes Sustainability: let’s start investing in anything that promises a reduction of carbon footprint, that helps us lead a more environmentally conscious life, that frees us from the danger of polypropylene.
Yes, moving to renewables, reducing CO2 emissions, limiting plastic and driving electric vehicles is mandatory. Nobody would argue with that. But my question is: what makes something “sustainable”, exactly? Do we necessarily need to throw billions at anything that looks potentially capable of saving the planet? Should the stock exchange go wild at rewarding lavishly anybody that triggers expectations (and we know who really profits from these expectations, right?)
Can billionaires be the solution?
Climate Change is real and I do believe that something that looks like doom is around the corner. Nations should act fast to put a stop to the nonsense of political puppets that act on behalf of a bunch of angry old white men, likely candidates to become soon the richest men in the graveyard. Governments must heed what scientists (and youngsters) all over the world are screaming and put in place draconian measures to reduce pollution to manageable levels. Anybody with any sign of electric activity in the brain should second that.
What I don’t buy is that it will be billionaires and their “investment wisdom” to save the world; that it will be their new “greed for green” to make the world more “sustainable”.
Indeed, I welcome any investment in better technologies but what is blatantly evident is that these investments are not motivated by any real vision other than good old shareholder’s profit (indeed, camouflaged by some ill-measured “global stakeholder’s” return. Harvard, I am sure, is already at work developing new metrics). Simply, I do not believe that Larry Fink and his peers truly understand what it means to invest for the betterment of society. They lack not just a moral compass, they lack the intelligence, emotional and otherwise, to think outside the framework that made them financially successful. If the likes of BlackRock were minimally capable of grasping what is at stake today, they would have the means to create immediately the foundation for a truly sustainable world.
All the answers…
If 2-3% of the dozen of trillions of dollars that a few financial institutions pour every day into speculative investments were to be channeled, wisely and competently, towards a drastic improvement of the management of education, healthcare, research and manufacturing, we would create in very few years the long-term answers to sustainability (with gigantic returns for all the stakeholders). We would really understand how we can all live better and more meaningfully on this planet of ours.
A few months before his demise, Dr. Deming published ‘The New Economics’ with the three-letter trade school across the river from Harvard. All the answers are in there. Time to read it.