Wednesday, April 22, 2009

Earth Day 2009 Environment vs Economy

"While one third think environmental choices will be tougher to make in these times, a significant majority think it will have no impact or even a positive impact – a surprising and important signal that fewer Canadians now believe there is always a forced choice between the economy and the environment." This was one of the conclusions from the Harris-Decima Earth Day poll released yesterday.

However, in the States, a Gallup poll which has been asking Americans about trade offs between the economy and the environment since 1984 is much less hopeful. The latest results show that “Americans are more willing than ever to forgo protection of the environment if needed in order to ensure economic growth or the production of energy.”

The false dichotomy of the environment or the economy has always been a problem for the SRI community. We face it constantly in a slightly different form when it’s posed to investors as ‘do you want to do good or do you want to make money?’ The companies we want to invest in must also address it as current economic models often make their socially responsible choices more financially expensive. Until desecration of our earth – air, water and resources - are adequately quantified and built into financial and economic analysis, it will continue to appear ‘cheaper’ to pollute and pass that cost on to taxpayers or simply to have it absorbed by the environment.

A ray of hope appears in a 2008 report from the OECD, Sustainable Development: Linking Economy, Society, Environment. In an attempt to nail down that amorphous and ever present word ‘sustainability’, it raises some interesting points and challenges.

One of the most useful of these is the idea that a society’s total capital base will encompass five types of capital.
• financial capital like stocks, bonds and currency deposits
• produced capital like machinery, buildings, telecommunications and other types of infrastructure
• natural capital in the form of natural resources, land and ecosystems providing services like waste absorption
• human capital in the form of an educated and healthy workforce
• social capital in the form of functioning social networks and institutions.

And three cheers for the OECDs statement that “economic growth alone is not enough to solve the world’s problems: the economic, social and environmental aspects of any action are interconnected.” That’s an insight that could lead the way to a happier Earth.

No comments:

Post a Comment