The future is sustainable. But we have to act now to make it happen.
It’s increasingly obvious that we need to do something differently. We have consumed at a rate that is simply unsustainable and the consequences are increasingly apparent. Our air is polluted, so is our water, our natural resources are rapidly depleting, biodiversity is under threat. According to NASA data, 2016 was the warmest on record.
And yet at the same time, 836 million people still live in extreme poverty with about one in five people in the developing world living on less than $1.25 per day.
Something has to change.
But Here’s the Good News …
We are almost at a turning point in history. Why? Because our sustainability crusaders are no longer sitting on the sidelines. These crusaders are driving change in the mainstream.
We know this because 2016 was a big year in many positive ways. The Paris Agreement and launch of the Sustainable Development Goals gave strong signals to the world because the right people are now at the table and making the commitments many have been waiting for. I believe the future is sustainable. But we have to act now to make it happen. So what are you waiting for?
Where You Put Your Money Matters
People — like us — are realizing that the decisions we make on where we put our savings can transform the world and the societies in which we live. The power of our wallets is huge — and I am not simply talking about the choices we make as a consumer. I am talking about the very powerful choices we make as an investor, to keep the pressure on and move towards long-term thinking.
How do investment decisions come into play? Because where we put our money makes a difference — not just to us as individuals but to the world around us. Because we have the ability to use our money to drive fundamental change: by investing in the kind of companies that understand their role in society, by investing in companies that drive societal gain. And that’s a really powerful thing.
In it for the Long Haul
So, why is thinking about the long-term important when it comes to our investments? Because we want to know that the next generation will inherit the world that they deserve. And that means we need to take a long-term perspective when thinking about the companies we invest in. The way that these companies act today — from production methods to environmental management techniques, from supply chain structures to energy sourcing strategies — will impact on the world that future generations inherit.
The good news is that it turns out that companies that are in it for the long haul are also better performers. McKinsey research, hot off the press, provides systematic evidence that a long-term approach can lead to superior performance: for revenue and earnings, for investment, for market capitalization, and for job creation. This is important stuff because it validates what many people have been saying for many years — short-termism genuinely detracts from company performance.
The Revolution Will Not be Televised: In Fact it Will be Digital
And do you know why I really sense that we are reaching that critical turning point over the longer term (and most of us are investing for the longer term!)? Because the WAY we can invest has the potential to dramatically change.
For several years, markets have been abuzz with talk of how fintech will transform the provision of financial services. For sure, the disruptive technology start-up scene is throwing curveballs at traditional models — from mobile payments to loan provision, from fundraising to money transfers.
And instinct tells us that fintech can also be a game changer in the mainstreaming of responsible investment. For sure it will change the way that companies do business. But it can also change the way we invest and then ultimately the way we live as society.
Let’s use digital solutions to:
- Democratize the way that individuals access investment information, opportunities and products. Imagine being able to invest your cash directly into companies aligned with your beliefs and values?
- Shake up the investment landscape by circumventing the traditional financial advisory model. Financial advisors who ‘get’ responsible investment can be hard to come by but fintech solutions could change this.
- Showcase to the masses what responsible investment looks like in practice — from pooling of resources on getting started and finding the investment products you want, to sharing of hands-on experiences and know-how.
- Support financial innovation through new funding mechanisms such as equity crowd funding platforms for sustainable companies and funds. Critically financial innovation could support entrepreneurial innovation for sustainable growth.
- Develop and promote tools to measure and monitor impacts and returns beyond just the financials. This could include using real-time data to support our understanding of these impacts and then using that understanding to forecast for future investment decisions. It’s about finding solutions that are simple, easy and efficient.
All of this can mean big things for building a sustainable future — IF we recognize the opportunities and start taking action now.
Originally published at moxiefuture.com on February 21, 2017.