At long last our investment markets are being dragged, kicking and screaming, into a place where a wider picture has to get considered.
- The “Triple” bottom line (Social and environmental as well as financial)
- “Stakeholders” vs only shareholders
- King III
Why shouldn’t this matter? As written in places such as the Investors Monthly supplement to Business Day, there are people who believe that admitting only the sovereignty of shareholder interests is fine, maybe better. This line of thinking suggests that the pursuit of wealth takes so wise a view that the best outcome for all will be arrived at by prioritizing only the self-interest of shareholders.
And this line of thought may be correct – its just that few shareholders today take the sort of view espoused in 1855 by Seathl “….You may think that you own the land. But you cannot…” in his passionate plea to the United States government. After all, if you believe in double entry bookkeeping, and in provenance (only buying things whose ownership in both traceable and just), you will know that land can never be “owned” in the same way as a man-made piece of value.
Imagine fostering a culture of decision-making based on what you believe will be best, not for you, not for your children, but for the seventh generation hence!
Now the investment industry has for decades been very adroit at accounting, accurately and on a double-entry basis. So why should it then squeal at adding transactions with the environmental balance sheet. A few book entries, and bingo. All that is needed is to account, fairly, for charges against environmental balance sheets.
If this all seems pie in the sky to you, read this book:-
There are some good titbits about the recent market to plant spekboom as an intensive dryland rainforest to capture carbon, and trade that against the output of heavy burners.
The book also carries a far-seeing 1877 quote from Peter MacOwan, botanist and first curator of the Albany Museum Herbarium:- to the effect that nature "is inconvertible capital, demanding as much sharpness of observation and skill to devise a remedy, as is requisite in manipulating convertible capital on the money market”
Perhaps this sort of clarity is required now, to complement the wizards of modern finance.