For the past three years, Corporate Knights has teamed up with Innovest Strategic Value Advisors (now RiskMetrics Group) to table innovative ideas for a more sustainable economy as part of its Annual Global 100 Executive Roundtable Dinner in Davos during the World Economic Forum.
In 2007, the topic was how investors can help push regulators to put a price on carbon; the dinner featured the heads of the world’s largest investment banks and Nobel laureate economists. The discussions helped catalyze US investment banks to play a key lobbying role in moving carbon legislation through US Congress. In 2008, sovereign wealth fund chief investment officers grappled with how they could seize sustainable investment opportunities. Shortly after the meeting, several funds, including the China Investment Corporation, stepped up sustainable investment policies.
In 2009, the discussion focused on powering our way out of the recession and beyond on a foundation that will not crumble. Lord Stern noted the current crossroads presents “a Schumpeterian growth opportunity” across the economy for dirty inefficient elements to be replaced by greener leaner infrastructure, new rail transit, and retrofits. He called for global green stimulus of $400 billion invested over each of the next two years.
George Soros said the indebted US consumer could no longer be depended upon to power the global economy. At the same time, dirty energy from politically corrupt sources is harmful in many ways. The two ways to fix this? Pushing forward with alternative energy sources, and reducing energy consumption. This will require a large investment and investors who choose prudently will be rewarded handsomely.
Nobel Laureate economist Joseph Stiglitz outlined the policy toolkit to reinforce Lord Stern and Mr. Soros’ efficiency themes: carbon tax to initiate a fiscal overhaul where we tax bads and relax taxes on goods like labour. Prof. Stiglitz also raised the spectre of protectionism on the horizon: “If industries perceive an un-level playing field with respect to carbon pricing, there is a real risk for this to get out hand and to close up our trading system.”
Shortly after the dinner, Stern and Stiglitz published an op-ed in Financial Times on the topic. Cumulative global green stimulus announcements have reached $0.5 trillion as of March 2009.
See a list of this year's Global 100 here.
