The Total Asset Market and The Global Stakeholder Model

Globally there are daily occurrences of social upheaval; political corruption; under-resourced social systems; police brutality; climate change; and an increase in social inequality.

These global crises can be attributed to four key issues, a failure to understand the entanglements of the separately defined disciplines that make up our natural world and the factors that exist within this system.  

They are:

1. The speed of change brought about by the 4th Industrial Revolution (4IR) and a focus on only part of the totally entangled natural systems.
2. The degradation and abuse of the biosphere due to a failure to understand these entanglements.
3. An increase in socio-economic inequality.
4. Social conformity based on limited core principles and a failure to see the whole system as a single entangled unit.

What is happening?

The exponential speed of change caused by the 4IR without considering the entire infrastructure of the natural world and its interdependencies is making our systems redundant and putting social and economic resources under great pressure:

• Our communal disregard or misguided social conformities with regards to the biosphere is causing our natural environments to become increasingly unstable, with extreme climate change and unusual viruses looking for new hosts as evidence.
• Societal conformity norms are being attacked by the manipulation of social media messages and sound bites based on hidden algorithms. This new weapon is being exploited by media giants who are publishing their own variations of the “truth” for political and financial motives. “Fake News” is a modern-day norm and experts are mistrusted even by the governments who employ them. Examples include the large swings in public opinion of Donald Trump’s presidential campaign and of the Brexit vote.
• Unconceived postulates. (A postulate suggests or assumes the existence, fact, or truth of (x) as a basis for reasoning, discussion, or belief.) The quest for the ultimate truths is always a quest for beauty and simplicity. For example, the multitude of phenomena we observe around us, whether on Earth or from the light of a distant star, is ultimately explained by a remarkably small number of fundamental theories. Rather than seek out these truths, we follow narrow-minded postulates such as Keynesian growth models.

In a “limited” and “finite” environment our economic policies are still based on Keynesian growth. It states that there are certain “free goods” with an “infinite supply”. Perhaps this was due to an initial misinterpretation of the terms “infinite” and “indefinite”, as the Latin terms “infinitus” and “indefinitus” are often confused in translation. Now there is a potential end in sight, so at best we can talk about “indefinitus”.

The externalities of production and growth facilitated by ‘free “infinitus” goods’ like earth, water, forests and oceans are now proven to be finite and rapidly diminishing resources. 

The problem relates to a lack of ontic consilience. (Ontic describes things that are real rather than theoretical, and therefore the objective of our system. Consilience is defined as ‘the unity of knowledge’ or, in our case, the linking together of the different disciplines drawn together to create coherence.)

One study estimated the market potential of the world’s natural capital assets to be worth six times that of global GDP, which is more than $121 trillion.

There is plenty of evidence to suggest that the way we are living is unsustainable, but this problem has yet to be addressed because our presently measured economic growth is deemed more important than the survival of our species. 

As a species, we have been incapable of understanding how we may sustain life with any other economic model than the one based on false measures of growth. We seem incapable of understanding how everything in nature, including life itself, is indefinitus not infinitus.

What do we need to do?

We need to:

• Improve global equality by improving our wealth definitions, measurements and distribution systems, and by exploring the entanglements between what Kant describes as “synthetic” or artificially defined disciplines, as they are created in the mind and not from natural irrefutable constructs. 
• Responsibly farm our Natural Assets to replenish biosphere stock.
• Design and implement alternative systems for growth and its measurement rubrics.
• Consider people differently - not by what financial value they add but what holistic value they can add.
• Create an accurate and transparent system for granular real-time measurements of the use and replenishment of the biosphere, holistic human and resource stock.

Unequal societies are worse for everybody 

Wealth inequality used to primarily exist in underdeveloped countries. Today two of the most unequal countries, Netherlands and Sweden are in the European Union.

Inequality risks being supercharged, at a huge human cost: 

? It took just nine months for the top 1,000 billionaires’ fortunes to return to their pre-pandemic highs. In contrast, the world’s poorest people could take 14 times longer to recover their losses - more than a decade.

? The increase in the 10 richest billionaires’ wealth since the COVID-19 pandemic began is more than enough to prevent everyone on Earth from falling into poverty because of the virus and to also cover the cost of a COVID-19 vaccine for everyone.

The education, political, economic and financial systems created during the first industrial revolution were all for the benefit of the financially privileged to maintain the growth of their finances and their business assets. In terms of equality, not much has changed since then.

This constant and accelerating growth is consuming natural resources and increasing inequalities in society. For instance, the wealthy minority’s response to travel during the COVID-19 pandemic has resulted in more private jet miles, which is increasing carbon deficits and the demand for fossil fuels.

It is a faulty system that depends on the underprivileged to provide cheap labour and pay taxes to maintain an increasingly fragile financial ecosystem, which they do not benefit from. The resulting inequality creates new and worse social problems for everyone. 

Richard Wilson says of the results of unequal societies, that ‘the relationship is weaker for health than for many other problems—we looked at life expectancy, mental illness, teen birth rates, violence, the percentage of populations in prison, and drug use. They were all not just a little bit worse, but much worse, in more unequal countries.’

The more unequal we are the less community-minded we become and the results can be seen by how different societies have coped with the pandemic.

‘Inequality affects our ability to trust and our sense that we are part of a community. In a way, that is the fundamental mediator between inequality and most of these outcomes, through the damage it does to social relations. For instance, in more equal countries or more equal states, two-thirds of the population may feel they can trust others in general, whereas in the more unequal countries or states, it may drop as low as 15 per cent or 25 per cent.’

The emerging realisation is the irony that all suffer due to inequality, including those at the top of the pile.

Alternatives to Present Measures of Growth 

Since the research paper published by the Boston Consulting Group (BCG) called ‘Total Societal Impact’, it has become increasingly obvious that businesses who concentrate on the holistic measurement of ‘good’ produce better results. Their research covered more than 300 companies and clearly indicates that there is a link between Total Shareholder Return (TSR) and Total Societal Impact (TSI).

‘A recent meta-study of over 200 papers revealed that 80% find that better Environmental Social Governance (ESG) is linked with better stock price performance.’

In the oil and gas industry, BCG found ‘if median performers in the health and safety topic had an earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of 30%, our analysis showed that the EBITDA margin for top performers in that topic—all other things being equal—was 33.4%.’ 

Essentially it is possible to produce growth through the economic use of resources and by beneficially impacting the environment. While businesses have not widely accepted this fact, investors have. ‘Total assets in sustainable investments grew from $12 trillion from the start of 2018 to $17.1 trillion by the start of 2020.’ That is an extraordinary figure of growth bearing in mind the COVID-19 pandemic.

We could define this as a new type of growth, called ‘internal growth’, as it is an improvement in margin not, the revenue, so growth is from existing externalities. 

The BCG evidence suggests it is possible to increase profit growth by improving a business’ TSI metrics.

Natural Assets

So ‘internal growth’ may be a way to grow without depleting Natural Assets as opposed to our former economic growth which burned assets. By implementing this new growth strategy, perhaps we can create a system where we can grow our efficiencies, reduce our externalities and benefit the biosphere. 

With the concept of Natural Assets becoming widely accepted in 2021, now is the time for us to launch our systems to promote this by accurately measuring and adding to existing data.

The System

We will create:

• A cryptocurrency to exchange value in a blockchain marketplace.
• A database to collate all the data to measure the positive and negative effects of the marketplace for individuals, companies and investors by measuring the intangible elements. 
• We will use this information to create a rewards scheme to benefit all:
• Businesses will increase the value of their balance sheets and P+Ls.
• Investors will have accurate data measured with a new metric for investment by measuring performance in terms of TSI as well as TSR.
• Consumers will be rewarded for buying the most sustainably produced products, which also have the best TSI index.

The concept is to create a marketplace to monetise, reward and incentivise actions that will improve the biosphere and ecosphere.

We will be able to create a system of measurements and analysis by accurately measuring the actions of individuals, companies and investors, which places a finite value on natural assets and the actions of all the stakeholders.

Individuals will be rewarded with benefits and tokens for buying the best sustainable products and beneficially living their lives.

Companies will be rewarded by measuring and improving their intangible assets while also improving their profits and brand. In this way, they will minimise their carbon and waste footprint as well.

Finally, investors will be able to profile companies in a more granular way with real-time information for better investments.  

The Natural Asset Economic Flow A Call to Action 

We can deliver what the World Economic Forum has called ‘The Global Stakeholder Model’ by linking a short, medium and long-term reward system with the key stakeholder groups. 

All these stakeholders crucially consist of people and make use of the planet. It is no surprise then, that they should want to optimise the well-being of all of us as well as that of the environment. 

Equally, it should be clear they have specific objectives that categorise them into distinct organisms in the first place:

• Governments focus on creating the greatest possible prosperity for the greatest number of people.
• Civil society exists to advance the interest of its constituents and to give a meaning or purpose to its members.