To speak on environmental sustainability is now becoming a commonplace. Not only because in Paris, in December 2015, a climate agreement was signed that, starting in 2020, for the first time, commits the signatory countries (Trump's US has called off for now) to contain the earth warming below 1.5 degrees Celsius. But also, because the mercury columns continue to challenge new highs compared to the historical data. The phenomenon is no longer just a matter of intellectual talks between scientists and columnists. It is a problem we experience every day. The Magic has come out of the lamp and is threatening the consciences of people and, above all, of young generations. the days are gone in which to deal with environmental issues was just a small environmental movement, that in the 1960s resulted in the “Rapporto sui limiti dello sviluppo del Club di Roma (1972)”. That document allowed a first awareness of the dangers of reckless use of national resources. Moreover, it is no longer an expression solely connected to the state of health and poverty of developing countries. The UN Brundtland Commission took two years to try to resolve the conflict between environmental protection and development, defining, in 1987, sustainability as a "balance between meeting existing needs without compromising the ability of future generations to compensate for own ". Around this definition, the interventions of the UN have moved, especially since the 1990s, when "sustainability" gradually became the word of globalization that followed the fall of the Berlin Wall.
Within the asset management business, Centro Studi Monte SA, almost since its birth ten years ago, has focused its attention on the concept of sustainability. It is the link between the geopolitical and the financial analysis that led us to identify the protection of the environment as a consolidate path for the transformation of society in a long-term perspective. We are getting into a new era that has all the requirements for becoming a Sustainable Era: we have chosen to give this name to our magazine (www.centrostudimonte.com) as a hope, but also as a stimulus for a globally better future. The framework of analysis comes to us in large part from the UN through also the multiple organizations and initiatives that it has provoked. The magazine is in fact organized around sustainable development goals.
More specifically, it is within the framework of the path opened in 2005 by the then United Nations Secretary-General, Kofi Annan, that our operations and the contents of the magazine are structured. Annan had invited a group of large institutional investors from all over the world to develop concepts for responsible investments. Their mediation has produced six principles, presented in April 2006 on the New York Stock Exchange, which revolve around the defense of the environment, social relations and corporate governance, terms now generally incorporated in the acronym ESG (Environment, Social and corporate Governance). It is this combination of incentives coming from public and private companies, ready to accept new challenges in a long-term perspective, which seems to us to be the basis of the path that this new era must take urgently. Countries struggle to get out of their electorate's field of competence, while international organizations are easily perceived as far from common sentiment. Companies are forced to global competition, often distorted by incorrect behavior in dealing with environmental protection issues, respect for social issues in the framework of transparent and reliable governance that gives security to the shareholder. Of course, the role of civil society and the commitment that each of us must assume shouldn’t be underestimate, perhaps pulled by young people, like Greta, who remind us that we must also work for future generations. Or morally shaken by the warning of personalities from the great global charism such as Pope Francesco, who dedicated his second encyclical to the health of the planet taking up the verses of Saint Francesco: “Laudato si’, mi signore, per sora nostra matre Terra., la quale ne sustenta et governa, et produce diversi fructi con coloriti fiori et herba”. But this sister - the Pope writes: "She protests for the evil we cause her, because of the irresponsible use and abuse of the goods that God has placed in her. (...)Climate change is a global problem with serious environmental, social, economic, distributive and political implications, and is one of the main current challenges for humanity. (...) The urgent challenge of protecting our common home includes the concern to unite the whole humanity in the search for sustainable and integral development ".
The global warming and the financial crisis, which then became economic and social, which broke out in 2007 in the United States, are at the center not only of the debates that will lead to a new reorganization of the world and of geopolitics, but to new paradigms of conceptual reference.
As Jeffrey Sachs wrote: "Each era has its dominant themes in global politics. The nineteenth century was centered on industrialization and the empire. The first part of the following century was one of the World Wars and the financial depression started in 1929. Then the Cold War took over. Our era, I believe, will be dominated by the geopolitics of sustainability ".
The asset manager must anticipate where the financial flows will be allocated. A vision of the geopolitics of sustainability lead to investing in those companies that have a cutting-edge environmental policy, an attention to the well-being of the human realities in which they operate and a transparent governance. The approach may not always be profitable in the short term, but it will certainly be in the long run: a manufacturer that beats the competition because it dumps waste into the sea, so without disposal costs, will generate more profits in the short term. But the market will get used to considering this behavior as an extreme risk, penalizing the share price. Institutional investors, pension funds, family offices and private savers will increasingly look at the companies with high ESG ratings. With Sustainable Era we want to monitor the changes taking place and to give a direction towards high-performance investments from a financial point of view, but also environmental, social and fundamentally human.
Free translation from the original article Sostenibili per forza.