Why Impact Investors Must Come To Terms With the Biological Bottom Line
By Paul R. Ehrlich and M. C. Tobias, co-authors of “Hope on Earth”
When Nicholas Stern released the ‘Stern Review on the Economics of Climate Change’ (October 30, 2006) for the British government, it was already clear that global warming, weather anomalies and the consequences of unheeded business-as-usual greenhouse gas emission syndromes represented a huge challenge for portfolio management that had unambiguously put governments on notice. Despite continuing havoc amongst the participating nations to the United Nations Framework Convention on Climate Change, it had become clear that they should prepare for accelerating depletion of every major life-support system, and the corresponding societal chaos and economic loss which would result from escalating global temperatures and their impacts on climatic patterns and thus on biodiversity. Climate disruption presented new, but sobering opportunities; epiphanies regarding the true capacity of taxation to collectively cap the shadow now cast upon every financial market worldwide and on the future of civilization itself.
More recently, in her essay for GreenMoney, “Building a Sustainable Global Economy,” Mindy Lubber, President of CERES, wrote, “This should alarm every investor looking for long-term value creation, because climate regulatory risks alone could cost investment funds $8 trillion by 2030, according to the international consultancy Mercer.”
While the SEC and several European investor groups have now come of age to the extent of mandating environmental audits at some level of stringency, requiring a degree of transparency that should shed light on the risks to investors of new weather patterns generated by new concentrations of GHGs (greenhouse gases). Meanwhile, biodiversity itself remains enmeshed in a seemingly impossible double-bind: there is simply no way as yet to accurately reflect true economic value of an individual, let along an entire species, or mosaic of interacting populations. All we know is that society is completely dependent on the mosaic of other organisms for its very existence.
In our book “Hope On Earth: A Conversation” (University of Chicago Press, May, 2014) we engaged in a discussion hinging upon the various ethical and pragmatic components of the one versus the many and of the future prospects of humanity.
Read the Full Article here-