In 1833 Great Britain adopted it Slavery Abolition Act. It was the result of a political and social awareness of the monstrosity of slavery. Not much happened. Slavery was defeated only when the British banks refused to finance the voyages of the slave ships that brought slaves from Africa to America.
Few in Italy - the usual insiders - have given prominence to what appears to be a gigantic revolution in world finance: I am referring to the letter that Laurence D. Fink, the head of BlackRock - the most important American pension fund - addressed to the administrators of the companies it finances. A pension fund, as many know, collects the shares of people who want to create a pension fund, and invests the money in the stocks and other securities of productive companies around the world.
His incredible letter is worth reading, which should be a shocking warning for finance and business around the planet.
Fink says that “climate risk means investment risk”, and explain that “What will happen to XNUMX-year mortgages – a key piece of finance – if lenders are unable to estimate the impact of climate risk over such a long period of time, and if there are no market opportunities for fire insurance or flooding in affected areas? What will happen to inflation, and consequently to interest rates, if the cost of food rises due to droughts and floods?”.
This is not a scientist, a philosopher, nor an environmentalist, but the man who governs one of the most important entities in world finance. Attention: what he says does not only concern new businesses, new infrastructures, future initiatives, but even current economic activities. Fink talks about “exit investments with high sustainability risks, as in the case of thermal coal producers”: what would you say about what is happening at ILVA in Taranto? Or the Italian company that managed our motorways so well that the Genoa bridge collapsed?
In 2009 I promoted a research on banks and human rights whose results were collected in the study 'Banks and Human Right: pathways to compliance' , based on the analysis of around 400 cases of banks involved, worldwide, in initiatives that had resulted in damage to the environment or violations of human rights. None of the official scientific collections agreed to publish it: I had to resort to self-publishing. I tried to speak to the ABI, but was kindly sent down a dead-end track. The problem was not of interest to them.
But already in 2008, prof. John Ruggie, of Harvard, had developed the now famous 'Framework, Respect, Protect and Remedy', the report which finally recognized the direct responsibility of companies for the respect of human rights (subsequently approved unanimously by the UN Human Rights Council) and which today represents a global consensus on the subject. It goes without saying that this approach to corporate responsibility was later endorsed by the OECD and the European Union.
The most important global financial institutions had since then begun to deal with the problem of the liability of the banks, which are always - or almost always - behind the scenes. They have worked to date within a group called Thun group, from the name of the small Swiss town where they met. At their most recent meeting in July 2019, they adopted the OECD document 'Due diligence for responsible business conduct in general corporate lending and securities underwriting'.
The document represents the extension of the OECD strategies on finance to the world of finance 'Responsible, Business Conduct'. At the same time, and before Fink's letter, many of the most important world banks had adhered to the 'Financial Initiative' of the UN Environmental Program, and within that framework they adopted, in September 2019, the 'Principles for Responsible Banking, a set of six principles aimed at aligning the behavior of banks with respect for sustainable development in environmental matters.
These fundamental steps forward clearly demonstrate today how the defense of the environment and the rights and dignity of human communities are no longer just an ethical requirement, but represent a fundamental criterion for being able to finance all economic operations and business activities.
Will Trump and all those brilliant politicians who think that the defense of the environment and human society are concerns that concern small elites of leftist intellectuals will notice? Many newspapers have published the news, but it certainly deserves greater investigation. In my opinion, few, except insiders, realize the incredible effects of these new responsibilities on the global financial system.
