The SRI Conference, Part I
Grantham’s advice to kick off The SRI Conference: Vote!
I can’t think of a better way to kick off The SRI Conference last week in Colorado Springs than to consider where we are in what opening plenary speaker Jeremy Grantham calls, “the race of our lives”, the race to control global warming and environmental toxicity before we experience the many potentially devastating impacts.
Make that “the most sobering way to kick off” a conference. Grantham’s talk, with charts, is published as a GMO white paper and is definitely worth the read.
In his talk, Grantham lamented the passing of what he regarded as a more responsible capitalism. Back in the 1960s:
“CEOs were content with 40 times the income of their workers and not today’s 300 times. Corporations acted as if they really had obligations to the cities and state in which they operated. And, of course, to their country. This is true to a much smaller extent today. Corporations also acted as if they had real responsibility to their workers: to prove it they set about designing generous, i.e., expensive, well-managed defined benefit pension funds. Which they did not have to do. (emphasis in original) Today, they claim, despite much higher profit margins, that they cannot afford them. The U.S. as a whole also projected an idea of a global social contract — whenever the cold war would allow it — to promote the idea that ethical behavior had value (there were some miserable exceptions, but mostly it tried). It was always the U.S. leading the way in promoting cooperative international trade, to enormous beneficial effect globally.
“All this is anathema to the new regime of maximizing an individual country’s advantage and short-term corporate profits.”
What should we be doing about climate change?
Grantham takeaways: Investors should be using their voice (i.e., money) to help urge a new, more sustainable version of capitalism that helps solve problems rather than hide behind conservative orthodoxy. That happens when you invest in asset managers who actively engage with companies about climate change.
VOTE for green politicians. Grantham mentions that Republicans were behind much of the environmental laws implemented in the 20th Century.
Um-hmm. Well, that was then. So I’d amend that advice to say, right now, “Vote for Democrats”, because virtually all 21st Century Republican candidates continue to be climate change deniers although a number have gotten a little wishy-washy about it lately, which is progress. Rep. Ryan Costello (R-PA) even went on All In with Chris Hayes the other night and said:
“[T]he biggest threat in the last month was not — is not the caravan, all right, it`s the IPCC report that came out.
But Rep. Costello perhaps notwithstanding, the more Republicans in office, the more empowered the current administration is to continue to pursue its anti-climate change agenda.
And for God’s sake people, vote in this the most important midterm election ever! How many times have you scheduled a business trip or hosted meetings with out-of-town participants on an election day? It happens all the time, and the message it sends is that our everyday business activities are more important than the quaint notion of voting. It sends a terrible message to employees who otherwise tend to be politically efficacious people that voting is not important.
IF YOU ARE A CEO or EMPLOYER, make a note to urge everyone to vote and make it easy for them to do so! Support democracy. (And as I finish this, Morningstar employees just received such a note from our CEO Kunal Kapoor.)
More observations on The SRI Conference coming up this week.
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