ROB LAKE: FOR A VALUE-DRIVEN ECONOMY

Rob Lake, responsible investment advisor, describes a value-driven economy, where leaders connect with their ecosystem and better resonate.

Public value is about considering the human factor at the centre of the economy. It is a human-centred approach in which inter-connectedness and inter-dependence are key. If all decisions, not just from board members or senior people in companies, but from all citizens, reflected their impact on nature and other human beings, we would be in a very different world.
Business cases are important, but equally important is what constitutes a business case, i.e. what constitutes the argument that leads people working in a company or an investment institution. Too often we consider that the only kind of business that is possible is one based on numbers. In fact decisions made in organisations are driven and motivated not just by numbers and technical arguments, but also by the sense of morality of the people who make the business. People often deny that emotions have a part to play in what they do. But it’s simply a human reality.
To pursue comparability at the expense of meaningfulness implies that we are pursuing the wrong objective. We should sometimes accept that comparability is not an appropriate objective if the only way to compare is putting numbers on things and if numbers are not meaningful, particularly in social and societal issues.

We are noticing a broader acceptance of the notion of shared responsibility. The basic assumptions that are now made in society about what constitutes appropriate behaviour are shifting (see, for example, the “flying less” movement on Twitter). There is still a long way to go before our global economy becomes value-driven, but people increasingly reflect about their personal choices in relation to climate change. Government intervention is essential to make it easier for people to change their behaviour. Yet, there is a tendency for governments to give responsibility to companies or investors. Unless some very fundamental changes, such a the introduction of a serious carbon tax, are made investors will have to continue to operate within the existing framework.
Changing the investment structures should not be a substitute for government intervention on multiple fronts to ensure that prices in the economy reflect sustainability through appropriate taxation and through regulation in areas where prices don’t exist or are not appropriate.