In my first lesson of economics nine years ago, we read a tale that conveyed Adam Smith’s underlying ideas behind the “Invisible Hand.” The morale of the story, as you probably know, is that free markets can make everyone better off. At Rio+20 the story is often told differently. Markets need to be tamed, incentives need to be rectified, and policy makers need to establish legislation that internalizes the negative environmental externalities. Hence, free markets are more often regarded as the problem, rather than as the solution. So what’s the right version of the tale when it comes to saving the environment?
When I meet up with David Zetland, he’s chatting up two Forum attendees over complimentary drinks and light hors d’ouvres from the Brazilian Pavilion at Parc Chanot’s Palais Phoceen. Usually the center of attention by virtue of a lightning quick wit and polymathic knowledge, Zetland is skewering a newly-formed NGO designed to help investment banks and other financiers assess risks associated with climate change… “Which makes perfect sense,” proclaims a sardonic Zetland, “because NGO’s are so adept at evaluating investment risks and investment banks have no idea.” (more…)
Corporate reporting and assessment frameworks are powerful tools to help investors and consumers choose their investments and products wisely. In the wake of the World Resources Forum 2011, corporate sustainability assessments are an important tool to help consumers and investors drive change towards a less-resource-intensive world. One of the oldest, the Dow Jones Sustainability Indexes (DJSI) started in 1999 as a way to list the top 10 percent of sustainable global companies for investors. SAM, a boutique sustainable investing fund, invites the largest 2500 companies each year to submit sustainability data for DSJI scoring; companies are added and dropped from the list based on their performance. The process is third-party reviewed by Deloitte Consulting. Two companies that attended the World Resources Forum 2011 are ranked on the DJSI; Kraft Foods and Syngenta.
Free market economy is often blamed to be the scapegoat these days, especially in discussions on sustainability and resources efficiency. Enterprises are accused for using resources irresponsibly. Some experts demand for stronger regulations, others claim that adapted economic models and even command economy are needed to solve the resources problem. In my opinion, the implementation of measures that go against free market economy does not make any sense. Why?