This Time is Different - I hope beyond hope. Black Lives Matter

Mmmm – Doughnuts

“This time is different” is such a famous warning phrase for investment thinkers ... I just dusted down my copy of Reinhart and Rogoff’s 2009 data packed tome of the same name ( with sub-title -Eight Centuries of Financial Folly) which ‘successfully’ sets out to prove the title premise wrong. Published in the jaws of the GFC in 2009 you might think its shelf life was assured for a good while but maybe look at global debt today , and then with some extrapolation to go for a post pandemic landscape? Is that different? (no don’t go there ....its a trap ! ). 

Classic economic analysis is however not the subject of this thought-piece. There’s plenty of that around by folk who , unlike me , are properly deeply qualified to talk about it . But I will irritatingly and persistently suggest that despite their venerability and their awards if they are not using ESG lenses then they are missing some of the most important and biggest issues that will impact markets.

Anyone familiar with my views and opinions will know that I yearn for more 21st century economic thinking of the kind espoused in one of my favourite go to books “Doughnut Economics” by Kate Raworth and the like where planetary and social boundaries are part of the deal. Honestly , despite appearances , it wasn’t just the idea of doughnuts that I was attracted too.

Bad politics – better outcomes? 

Erm – didn’t the article title indicate this was about Black Lives Matter? Yes that's my intention – please bear with. There are many reasons why I personally find so much of the last few years worth of geo-political developments deeply unsettling and sometimes I even find my voice to publicly express those concerns and offer an opinion, For example here from last Summer :

https://www.dhirubhai.net/pulse/do-we-just-get-what-deserve-john-belgrove/

Could it be that when politics turns so bad (wide-ranging personal taste and beliefs understood) that somehow , gloriously, it tips the people over the edge to react and to say “no more!”. To where the otherwise silent majority that are obliviously complicit in societal unfairness , cannot take such institutionalised behaviour when it is flaunted in their faces rather than subtly sustained? Maybe there is an ironic benefit to terrible political leadership? (noting that many folk don’t think this is terrible political leadership)

Hoping beyond hope

 So it is with some trepidation and much vulnerability , my intention here is to offer a personal contribution “my story” about what we have all been witnessing and reflecting upon in recent days. The elevation of the Black Lives Matter movement into far greater societal consciousness than has been seen to date is touching multiple generations but possibly mostly the younger generations to speak up and challenge each other. Certainly true of my adult children. . 

 The potential that this represents a core societal movement for a strategic re-set rather than being yet another “moment” in a long history of institutionalised oppression is tantalisingly within reach perhaps. Especially for tomorrows voters etc. But also where older privileged wealthy white voices are joining in en-masse saying that’s enough “no justice , no peace!”. Standing up against racism , telling the politicians what they want to vote for , protesting in the streets and surely the numbers globally would’ve been even far greater were it not for the Covid-19 crisis.  .... (more reflections later on what our role as voters and as corporate citizens in financial institutions might be)

So is this time different? I hope beyond hope that it is. I intend to share some of my personal perspective through this old white guy’s lens on the subject of institutionalised racism. Could I be utterly irrelevant and ridiculously out of my depth? Quite possibly but following some fantastic and detailed personal exchanges this week with Dawid Konotey-Ahulu , co founder at Redington and Diversity Project leader for #talkaboutblack , I’ve been given the confidence that my voice can make a relevant contribution in our industry. Regardless , speaking up is part of the deal right?

Speaking up

I am not trying to conflate or misrepresent but social justice was also at the heart of #MeToo movement and I recall similarly looking to validate and offer my personal perspective with someone like Dawid , appropriately qualified to comment on the relevant issue at the time. In fact that person I went to then was financial journalist Elizabeth Pfeuti who was writing a series of articles on office gender discrimination and worse. What I shared in private with her , I did not subsequently “speak up” in print though and she respected that shyness. Yes I do and did regularly speak up privately with individuals – calling out what I see if I see it in the moment etc but not going to print is something I think I now regret. So this time I am (but not in an #IAM format way!).

I will find out in time if it’s something to regret or not. 

I appreciate it is the brand I represent rather than myself that gives me (many) privileges to potentially influence others. Sure I may offer personal views ,and my big brand is supportive of me to do so (so far) , but do I really offer my personal vulnerable, worrying self too? Here I attempt to do both. You can decide on the extent of its relevance or authenticity. I realise that I’m confident in myself however of where my values sit and where my small day to day actions land.

Are markets bothered?

But perhaps the only professional relevance is to offer opinion about investment consequences (ie thinking ahead about financial markets). Isn’t this issue outside of that brief? I suggest not , but the evidence here is a bit of a head scratchy one .

One of my professional contacts Tina Fordham (Avonhurst) is one of those rare beasts (if she can forgive the expression) who specialises in political analysis for financial markets. You might think it was 101 for any financial analysis right? Wrong. It’s amazing how “immune” financial markets can seem to what’s actually going on around them politically in the world and to meaningful physical and social shocks. For the majority of financial crises, it is the sentiment driven irrationality that is causing the effects we talk of when volatility turns-up and “￡￡bns are wiped off stock market valuations”. Remedies are focused always on restoring investor confidence . A hard to pin down behaviour that collectively can appear pretty unfazed by social (eg inequality) and physical (eg climate) shocks and risks. 

So equity markets are not reacting to the protests .. not yet anyway. Although there are few nationwide US protests of similar scale to compare (1968 civil rights and anti-Vietnam; 1992 Rodney King), a muted reaction from markets is pretty consistent.  Protests in wider developed market countries rarely move the needle either , even if there are disruptive elements , as investors expect rule of law will prevail.

Also markets are pricing in a faster recovery than the economic reality post-COVID would suggest etc. And Climate related risks or transition to a lower carbon economy consequences are surely not priced in to markets either. Well I guess that path of outcomes doesn’t necessarily follow for sure.

Now I comment often on Climate related risk with respect to institutional investment so I won’t dwell much longer here. But I would make the link that people of colour disproportionately bear climate impacts, from storms to heat waves to pollution. Fossil-fueled power plants and refineries are disproportionately located in black neighbourhoods, leading to poor air quality and putting people at higher risk for coronavirus. ( Source Katharine Heyhoe , climate scientist)

Let me return later and conclude with some thoughts on actions for investors at the end of my article. In the meantime , I said I wanted to share something of the personal.

My formative years ....

I was educated in 1970s Britain at a state grammar school in Kent. I’m guessing it was 99% white pupils and I know it was 100% boys. As a teenager my far greater curiosity and support for the Rock Against Racism movement and a love of the Punk movement more than of my studies was not particularly well informed (what did I know of non white cultures) nor recommended (studies first , music second) . But somehow it mattered the most to me at the time and my studies were abandoned in favour of teenage kicks. 

After my unsurprising ‘disappointing’ spell at school I could start to make a few more of my own choices and despite naturally very bad exam outcomes (two Es at A Level , I am still embarrassed) I still nonetheless incredibly had the privilege of a college degree place offered , sponsored by the Govt / taxpayer.

They say a picture paints a 1000 words. (and apologies that you get both and then some!)

Although in itself it proves nothing , this picture taken getting on for 40 years ago (I’m soo old). It is of my housemates ,including me, at college (third year) outside of our rented accommodation. Nine of us in a three-story house , with one kitchen , one bathroom plus one WC and a common set of objectives and budgets and a lot of lively chat. You should be able to guess which one I am.  These were the friends who I wanted to live with and who wanted to live with me , many of us having also previously spent the second year living together in digs. Friends who didn’t have my grammar school advantages but who taught me how I was wasting my potential and therefore , like them , I studied better and got the good results to match.

Being located in a Naval port (Plymouth) in early 80s UK , racism was an everyday occurrence and this student community (our house) experience allowed me to witness the best and the worst of our national culture and the amazing potential of multi-cultural diversity first hand. Despite being a white boy I felt the racism too , sometimes it was directed at me because of the company I chose. It was pretty formative times for me but it was nothing , absolutely nothing compared to actually being black and being on the receiving end whether directly and aggressively or subtly and more perniciously.

My first Job

My first job after graduating took me to leafy conservative Reigate in insurance. I left that good job within just a few months of starting because of the racist banter of a couple of colleagues which I spoke up about. This principled white boy new graduate would not stand for that – but I had entered a new white world of work , not like the temporary equality of University life.

Acclimatising to white privilege?

Such awful scenes haven’t been witnessed by me in my 4 employers over 35 years since but the unconscious biases have always been there in corporate life , occasionally surfacing where I would typically go on the attack. More awkward if it were a client. But who knows possibly such casual bias tended not to crop up in front of me because of my reactions or because of the company I kept. So it can be easy for white men to be oblivious to the institutionalised racism and sexism around them eh? It can be easy to make unintended mistakes. Yes I felt as though my university experience had equipped me with a better radar for that than many white male peers and would call it out but because of my learned experiences but I could also not see what I was not exposed to.  

It’s too easy to become acclimatised to white privilege over the years in the workplace while thinking that all around is functioning fairly.  

Something to hide

I never talked about college at work much , not because of this part wonderful , part eye-opening experience , but because of something essentially immaterial that to me felt like an huge embarrassing secret to hide. Since I was surrounded by and competing with top Oxbridge brains , often privately schooled , not only did I not go to the right University , it wasn’t even a University – it was a Poly. Urgh ! There can be no respect for going to the wrong school in the City and although it’s a less malevolent form of discrimination , it can still feel devastating. First world problems in my case and I’ve long overcome that bias of course , enjoying a successful career and peer respect at all levels. With hindsight I do also suspect my white-ness however gave me sufficient advantage that I needed for my “wrong college” status to not in fact become a deal-breaker. After all I still got a foot on a privileged career ladder. But it wasn’t straightforward either.

Diversity & Inclusion

I think I’ve been a gentle but persistent (too gentle perhaps) champion for driving diversity and inclusiveness in my workplace before it was a thing , ie before D&I was an identified corporate function . Some folk with the patience and willingness to read this will recall my work with Laura Liswood , (Speaker , author) for example and getting diversity training on the Hewitt B&W Partners agenda , finding our way to discuss taboo subjects etc and to call out bad behaviour. Most of those leaders then have long since left the business (not due to any D&I issues by the way!). For a time I was proud to lead possibly one of the most diverse consulting teams in London in the City at More London Place and Devonshire Square. And I hoped that it wasn’t even noticed as having such a label.

Fast forward to now , all the organisations , all the CEOS who have recently taken “pen to paper” to issue their Black Lives Matters support statements. They are usually also committing to change – yet all of these firms have dedicated D&I policies in place , all abide by legal equality requirements etc – so somethings still structurally very wrong eh?

Virtue Signalling

Incidentally if I look like I’m virtue signalling myself to be some moral benchmark of values that would be entirely misleading. I think , from a values / principles / beliefs perspective , I am basically the same person in terms of values today as I was in my formative college years.

The flaws that fired my rebellious anti-authoritarian thrill-seeking teens showed up large in the 1990s as I far too enthusiastically embraced the City drinking culture in fund management days for example. A habit that went on for too long but fortunately still didn’t quite derail my career or family life , it just applied some heavy bumps and cuts.

Shame is a powerful vulnerability – one which Brene Brown taught me about with her work many years ago. Yet a little voice in my head thinks now someone is out there reading this is and saying “Two Es at A Level – who is this guy?!” I thought he was smart ....

Own goal

I’m still scoring other own goals too. Here’s a different , pretty weird but relevant example. For context I actually believe Aon is right up there in terms of corporate culture and policy regarding fair and equal treatment in the workplace and in all our interactions with clients and business partners. It definitely matters , best practice codes of conduct are strongly enforced expectations but it doesn’t stop issues occasionally arising.

With Aon D&I in full swing a few years ago , I refused to add the recommended corporate footer to my email to say “ I’m in , I pledge to support inclusion at Aon every day”. Because free thinking me thought why the bloody hell wouldn’t I be that person ?! That was my attitude and it concerned me that a few folk , who to me obviously were just pretending to care, had no qualms about adding it to their emails. These are perhaps passive folk , not intent on doing harm per se but also just not really showing up in the way they could to be inclusive. But making such a stand (which I did and do) does no favours. Individualism isn’t a great corporate behaviour I appreciate. Being wrong about messaging and unaware of its possible wider impact it has isn’t smart. Perhaps the two Es do get justified!

Virus

Many are drawing the parallel that racism is a global virus without a vaccine , much more serious than Covid. As I illustrated above the human psyche seems so fond of “isms” and “ists” that we will all fall foul of one kind of discrimination or another in life and that perhaps keeps us in affinity groups too much rather than educating ourselves and embracing our differences. In investment diverseness in portfolio construction works without contention. Yet in people ?

What worse “ist” or “ism” is there than race? It’s got to be the most tiring and devastating of them all. This is not to except other important issues. As I indicated at the outset , I find so much of the recent years geo-political developments so unsettling. Even I as a privileged white man can see how race relations have palpably and upsettingly been going backwards with a surge of nationalism , some elements associated with Brexit and Trump etc. Ugly , ugly , ugly.

And not that we started in a happy place. Yes we are not 1980s Britain in attitudes and work practices anymore but issues remain deep and the symptoms of that virus can just “pop out” unexpectedly at any time.

A lens of darknesss

Take the recent case of Amy Cooper , New York central park dog owner , high flying global investment firm executive and undercover racist. I cannot possibly substantiate this next suggestion but it’s a guess. My guess is that given a different sequence of recent events , I could quite imagine Amy Cooper , appearing on social media , holding a white #IAM card , saying she is shocked and saddened. I can imagine such cognitive dissonance in place.

Dawid , who I referenced earlier, blogged brilliantly , powerfully and immediately about the incident here

https://www.dawid.com/central-park-burning/

His words included this devastating line which we have since discussed together...

““But, I’d love to know how many white people can honestly stand up and say that they never, ever, deep down, find themselves burn’d up with that inflaming wrath, viewing people of colour through a lens of darkness.”

#IAM

So I am reading (and liking) the many #IAM statements I am seeing from colleagues and connections of all ethnicities. I have no doubt that everything on offer is heartfelt. Its perhaps the safe way for LinkedIn professionals to express solidarity right now.

I am seeing things like “ I am shocked” , “I am listening” , “I am an ally” etc. So I thought I’d conclude with trying to interpret what actions that might entail . Well I can only speak for myself. 

Actions not just words

It is reasonable to think about what actions follow the words. Here is where I’ve got to.

Anyone who can influence the allocation of institutional capital has the potential to create change. The world already has a blueprint of what better looks like in the UN Sustainable Development Goals (SDGs) .

We should ensure we include a focus on UN SDG10 is “reduce inequality within and amongst countries”.

https://sustainabledevelopment.un.org/sdg10

But before we get to the 17 SDGs , perhaps it’s a minimum requirement for each of us to ensure we educate ourselves. There are many sources and resources to access. I am obsessive about books and my home is overloaded with them. It’s misleading because I only read a fraction of them but I skim many more. Some folk have enjoyed a bit of snooping at bookshelves on Zoom / Teams etc calls etc during lockdown. I’ve struggled to find a background without books(!) but here is a relevant section in my home to Black Lives Matter . 

I’ve been pleased to see my adult children accessing them this week and talkimg to their friends about the contents. The is some challenging and shameful aspects about UK history that should be addressed and acknowledged in the classroom. I think it’s just necessary in order to move forward. With our own education improved we then need to be ready to educate those around us.

Different folk have different learning styles but educating ourselves and then speaking up with those around us is a must.

Looking forward

For those that know me well , they will appreciate my fondness for talking about behavioural biases and behavioural finance. We are all biased in our own ways , but some biases are common and work against us. Despite being absolutely at the end of a (successful) City career with past responsibilities to drive change now in the hands of next generation management, I can be hopeful and confident they will do a better job of purpose than my generational contemporaries generally managed.

I’d like to say I am basically humanitarian and egalitarian in outlook and in deed. But I’ll sign off by saying I am biased , I am privileged and I am me. I hope that I managed to convey what some of that means here and that by speaking up , even if not in the agreed #IAM format , it still has some relevancy. I expect to write and comment more on environmental issues than social issues still. But I think I will now place even higher conviction attention to the social issues in ESG that we can influence - especially inequality as I hope beyond hope that we #buildbackbetter to achieve the #thefuturewewant.

 John Belgrove , 07/06/2020