Countryside Matters 2014 - page 28-29

Countryside
Matters
26
Countryside
Matters
27
INVESTING IN THE FUTURE
INVESTING IN THE FUTURE
Globalenvironmentalproblemsareoftentoocomplextosolvewithasimpletop-
downconceptanda ‘polycentric’approachoftenworksbest,withmultiplesmall
changesultimatelyaddinguptoa largerchangeoverall.
In exploring responsible investment, itmakes sense to go back to the origins
ofwhat isknownas“ethical investment”, asdefinedby theQuakers in the late
18th century. TheQuakers believed it wasmorallywrong to invest in slavery,
alcohol, tobacco,gambling,armamentsandpornography.Theseactivitiescould
beclearlydefinedandexcludedfroman investmentportfolio.
Anotherapproach is toaddadefinitionof theactivities investorsmaywant to
encourage as environmentally “sustainable”, as expressed by the Brundtland
definitionof sustainability. GroHarlemBrundtlandwas the formerNorwegian
PrimeMinister who chaired the sustainable developmentmeeting at the Rio
EarthSummit25yearsago.Shesaid;“Sustainabledevelopment isdevelopment
thatmeets theneedsof thepresentwithoutcompromising theabilityof future
generationstomeettheirownneeds”.
Thiswiderdefinitionofsustainabilityhelpsto incorporateenvironmental factors
into an overall responsible investment policy. Take, for instance, the issue of
biofuels.Aretheybenefitingtheplanet,asagreen fuel,orare theydoingmore
harm than good by taking away land that would otherwise be used to grow
food? Disquiet isgrowingoverthis,andtheEuropeanParliamenthas justvoted
to lower thecapon food-basedbiofuels inEurope from 10% to6%of the fuel
used in transport becauseofconcerns thatweareusing toomuchof the land
whichwouldotherwisebeusedforfeedingtheworld’sever-growingpopulation.
Another reallybigenvironmental issue is thatof deforestation throughout the
world,aserious issuebecauseforestsactasabigcarbonsink,convertingexcess
carbondioxideback intooxygen.Wewouldobviously like tohavemore forest,
but themost pressing issue is to stoppeoplecuttingdownwhatwehavegot,
particularly for crops likepalmoil. This isaparticularproblem inMalaysiaand
Indonesia– inBorneo–where theyhavecutdownvastswathesof rainforest to
growpalmoiltogo intomanymodernprocessedfoods. Investorsaregivenclear
guidelinesonwhereto investfrom initiatives liketheRoundtableonSustainable
PalmOil, which currently certifies 14%of all palmoil producedglobally. Such
initiatives are really helpful in enabling investors to differentiate between
companiesthataresupplyingpalmoilfromnewlycutdownrainforestandthose
thatareactuallydoing itfrom landthathasbeenestablishedforamuch longer
periodasfarmland.
However, this isadifficult issuebecauseprettymuchall farmlandwas cleared
from something at some point. This is the argument that a lot of developing
nations haveput forward; “You cut down all your forest years ago in theUK,
“TheQuakersbelieved itwasmorallywrong to invest inslavery,
alcohol, tobacco,gambling, armamentsandpornography.”
Theoriginsofsociallyresponsible investingarebelievedtodatebacktothe
ReligiousSocietyofFriends(Quakers). In1758,theQuakerPhiladelphia
YearlyMeetingprohibitedmembersfromparticipating intheslavetrade.
InOctober2013,Quakers inBritainannouncedtheywouldremove
investmentsfromcompaniesengaged inextractingfossil fuelsbecause
such investmentswere incompatiblewithQuakers’commitmenttobecome
asustainable low-carboncommunity.
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