GETTING PEOPLE ON DECK

Getting people on deck after governments agreed to focus on climate change is crucial in these times of fake news.

Yelena Novikova was named “G20 Young Global Changer-2017” as well as “G20 Young Global Changer-2018” for two consecutive years thanks to her advocacy and research work on integration of financially material Environmental, Social & Governance (ESG) factors into corporate and investing strategies. In September 2018, “Global Solutions Journal” published her article entitled “On Pension Savings and Recoupling Needs” alongside contributions by the likes of German Chancellor Angela Merkel and Nobel Laureate Edmund Phelps. 

Yelena is an avid public speaker and magazine contributor, who takes international stages to speak about various aspects of ESG /SDG Integration and public policy. She writes today about how “Fake News” and misinformation affect us and prevent value from becoming fully public.

Nothing for the People without People?

The old axiom of “People, Planet, Profit” is probably one of the first things future ESG professionals learn about. Yet, [even for us] it becomes increasingly easier to forget that “people” constitute 1/3 of the “Triple Bottom Line” and take it for granted, as we fall down the rabbit hole of particulars.

As a community, we’ve spent decades debating financial materiality of Environmental, Social and Governance (ESG) factors. We argued about the usefulness of positive and negative screening, discussed pros and cons of different benchmarks, and adjusted various valuation models for ESG integration needs. Compared to this “rocket science”, showing the general public that it’s all for their own good should have never been that difficult, right?

After all, no rational mind could ever assume that people would be against achieving such Sustainable Development Goals as “Good Health and Wellbeing” or “Clean Water and Sanitation”. Yet, in times of “fake news”, “alternative facts” and unprecedented deficit of public trust, misinformation and self-harming assumptions can easily win over enlightened self-interest. That is why some organisations are now in business of assessing portfolio exposure to fake news.

Not All Exposure to “Fake News” Is the Same

Yet, in doing so organisations like Sustainalytics are primarily looking at how solid content governance policies of social media companies are. The logic here is that if you invest in social media giants like Facebook and Twitter, you need to watch their financially material reputational risk factors as well as their potential exposure to litigation. For example, Liontrust has completely removed Facebook stock from its portfolio in Q1 2018 because of privacy and fake news concerns only to see Facebook stock further drop by 20% by July 2018.

Unfortunately, ESG relationship to “fake news” is not limited to either investing or divesting from social media companies. As recent conservative outrage to Greta Thunberg’s speech at the UN General Assembly reminded us, significant portion of the public still remains misinformed about Global Warming and Climate Change.

People, who are intentionally misled about Climate Change are constantly told about the money that Al Gore is supposedly making. (Without ever being educated on all the benefits of ESG investing strategies that Mister Gore’s “Generation Management” is pursuing).

Climate Change Denial Is Business

People are bombarded with the notion that Green Economy is a business, to which those sufficiently informed could only ever say: “Yes, it is and rightfully so!” For instance, the World Economic Forum (WEF) estimated that by 2020, USD 5.7 tn will need to be invested in green infrastructure projects, mostly in developing countries. This money won’t just magically appear as the gift from other high. Naturally, some USD 5 tn will need to be diverted from business-as-usual brownfield projects.

Which is why climate change denial becomes an increasingly more aggressive business. And, unlike its tree-hugging do-gooder counterpart, organised climate change denial fights for its survival now, so it’s a business, where all bets seem to be off. Conservatives worldwide, be it an American pundit Michael Knowles or a Russian TV host Vladimir Solovyov even go as far as to make mental health comments instead of making intellectually valid arguments. As they launch an open season on a passionate young activist, undecided members of the public risk losing track on whether it was the climate change science itself that got discredited or the personality of the messenger.

It should be noted that while Fox News apologised for Michael Knowles’ comments, Russia 1 TV channel never apologised for identical comments made by Solovyov and his guests. Another more moderate tactic used by the NTV channel’s Central Television is running a report on unprecedented agricultural gains caused by an especially rainy Russian summer immediately after the video on Greta and global climate activism. Even those Russians, who would otherwise be alarmed, were essentially lulled into another tale of agricultural economic growth that Greta has warned us about in her UNGA speech.

Moving Beyond the Government Buy-In

So why “fake news” around Greta herself and climate change in general are of primary importance for us as ESG and sustainability professionals now? As much as we talk about getting governments on board with the agenda, most governments are on board. At least, officially. Most have ratified the Paris Agreement. Some are doing a lot more than that.

I’ve had yet another awakening about that as I was visiting Nur-Sultan (Kazakhstan) earlier this year. I picked up Astana Times, on my way out of the hotel. Nearly half of the articles in this local English newspaper, were dedicated to sustainability and green economy. As I’ve arrived to the newly built state-of -the-art “Astana International Financial Centre” (AIFC), western-educated experts were talking about Centre’s potential as a future regional hub of Green Finance and FinTech. The very reason this AIFC even exists, is because of tremendous interest of the country’s first president Nursultan Nazarbayev (a.k.a. Elbasy) in green finance.

Much like with the recent conservative outrage against Greta Thunberg, my euphoria about future sustainable paradise got cut short then. Not by the Governments, not even by the lack of available capital or expertise, but by the guests from various post-Soviet countries, who couldn’t stop asking rhetorically: “This country has enough coal to burn for another 300 years! Why would they build this?”

We’ve might have gotten [most] governments on board, now let’s drag the masses on deck and make these values truly public!

You can follow Yelena Novikova on Twitter at @NovikovaYelena – Your Public Value opens its columns to all experts willing to share their thoughts on what public value means to them. Please be in touch and let us know what public value means to you.

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