It is day 2 of our Alternative UN SDGs Advent, where each day until December 24, one expert talks about investing to meet one of the UN Global Goals. Today’s post is from James Perry, social impact investor, co-founder and co-chair of B Lab UK, discussing the global goal “Partnerships for the Global Goals”.
As we look forward to a World Cup year, the English will again have to face that decision. Despite all the years of hurt, do you ignore reason and dare to hope again? Or do you just save yourself the inevitable, maddening frustration and emotionally disengage from the start? And why oh why are we unable to get it together like the Germans?
The challenge of winning a World Cup is, at least in one respect, a bit like the challenge of changing a global system.
It is becoming increasingly obvious that the dystopian worlds of Government, Business and Charity are unable to achieve their goals alone. Not whilst they work separately from, and so often at odds with, one another. Individuals and institutions are increasingly realising that systems change is required.
If you realise this and are an individual saver (whether the widows mite or a family office), or a social investment bank with £500m of assets, you might want to know what the social impact of your endowment is – as it is invested in the capital markets for you by asset managers.
By knowing this you might be able to orientate your portfolio to achieve a more positive social impact, and fewer negative externalities. Except that the asset management industry cannot tell you what the social impact of your investments is at present. Are you likely to get an answer by asking this question alone? Even with £500m?
If you are the same individual saver with an interest in health outcomes, or indeed if you are a £15bn foundation interested in health outcomes, then you might want to know how your investments – and capital markets more generally – affect health outcomes in society.
To what extent, say, might investments be contributing to bad health outcomes such as obesity and type 2 diabetes? After all, good financial returns can be made by selling 99p tubs of donuts to low income families. And might there be an opportunity to intentionally use your investments to deliver positive health outcomes such as exercise and healthy diets? Unfortunately, the asset management industry has no systematic way to process these questions. And, in the context of global health and global investments, how well placed is £15bn to get these answers – and so affect the markets?
You are likely to be a saver whose interests are managed by a (say) £250bn insurance company, or a pension fund using a £100+bn asset manager. You will be interested in the long term outlook for policy holders and pension savers, including what sort of world the capital markets are creating for us to live in when your pension is finally paid to you.
The financial markets are making daily allocations of capital that shape our world, our jobs and our way of life. How much of a voice does a £250bn insurance company really have in how these global capital markets work? Realistically, even at that scale, are they alone able to stop negative externalities such as climate change, which are obviously not in the interests of their policy holders? Can they even understand these externalities when capital markets do not have this information?
So, back at the World Cup, why is it that England’s richly endowed players, who have as much talent and wealth as anyone, cannot change their world?
Perhaps there is a problem with becoming a star player, whether in football or in financial markets. Both inhabit grand, glass-and-steel cathedrals and operate in the world’s biggest league. Each week you are feted and coddled as you turn out for a respected and revered institution, living a swish life far away from that of ordinary civilians, with the very best facilities and global expertise on tap.
When one is a star player for a leading club, it can become hard to leave the ground, mix with the public and experience the broader world. With the pressure, it is natural instead to become caught up in one’s own smaller world. One’s personal brand, and the brand of the Club, becomes an overriding concern. And the bigger the club, the more difficult it is to see beyond its glass & steel cathedral.
Could it be that there is something in the culture of English football, and the media that surrounds it, that promotes the idea of our players, on the national stage at least, as individuals, as icons, Galacticos – and not as team players, sacrificing self for the greater good of the team?
Systems change is about changing the world. It is a team game. It requires every individual institution irrespective of their wealth and talent, to see beyond the glass walls of their own building. It requires them to see that they only really have any value to the team when they are in position, contributing what they are uniquely placed to contribute, in the context of everyone else’s unique and valued contributions.
An assembly of great individual institutions is a good start. But it will not win a World Cup. Rather, as the Germans repeatedly show us, worlds are won when the individual surrenders himself to the greater good of the team.
This year, I’m letting the irrational hope take me over. I believe that the ever increasing numbers of individual savers and institutions that have seen the acute and obvious need for systems change will start to play as a team. Together, we have everything that’s needed. If we surrender self, and work together as a team, we might just win our World Cup.
And the football? Well, I suppose – at the end of the day – it’s a funny old game.
Sign up to our weekly newsletter
Get better with money, in every way.