Patrick Jenkins (Financial Times) attended a debate held by the FT City Network, a panel of more than 50 senior figures from across the City of London, during which ‘two of the world’s biggest fund management bosses’ pleaded for reform.
He reported that these pleas were made in response to an address by Gail Bradbrook, co-founder of Extinction Rebellion, in which she called for wholesale reform of the current economic system to avert global disaster.
Recent protests have focussed in part on the City of London and the role that banks, asset managers and insurers play in financing and sustaining some of the world’s most environmentally damaging industries, from oil extraction to vehicle manufacture.
Several participants praised the part that UK-based climate change activist group Extinction Rebellion has played — alongside others, including Swedish teenager Greta Thunberg and film-maker David Attenborough.
Anne Richards, chief executive of Fidelity International, said the world must end “our obsession with ever-increasing GDP” and the “primacy of shareholders” to foster the kind of long-term thinking that would help protect the environment and “pivot [away] from the Milton Friedman concept of capitalism and the primacy of shareholders, who may have a very short-term involvement with an individual company, towards a wider stakeholder approach”.
Andreas Utermann, CEO of Allianz Global Investors, said that the world’s growth mania — “nominal GDP growth, supported by population growth, [and profit] growth” — was clearly unsustainable, and suggested that capitalism in its current form is “borrowing from the future while destroying the environment . . . A more holistic approach to ‘growth’ needs to evolve, looking to capture societal and environmental benefits and costs . . . More sophisticated measures than GDP per capita are required to determine whether capitalism is delivering to all stakeholders without borrowing from the future while destroying the environment. It was self-evident that this is not sustainable”.
A number of City Network contributors said that, while it was impossible to blacklist climate unfriendly firms instantly, it was vital that companies set tough environmental targets, measure whether they were met and reward managers on their performance, rather than on short-term profit. Other interventions showed that a wider range of contributors to the debate believe that business and government must urgently improve their response to the growing evidence of environmental catastrophe.