The Total Asset Market Place and the Global Stakeholder
The Speed of Change and Natural Assets
?All around the globe we see, social upheaval, people in the streets, brutal policing, political corruption, under-resourced social systems, climactic weather, and an increasingly unequal society.
All these things are symptoms of three things, the speed of change brought about by the 4th Industrial Revolution, abuse of your biosphere and inequality.
Inequality used to be in third-world countries now the three most unequal countries are Europe and the USA, The Netherlands, Russia, Sweden and the USA.[1]
?Every day seems to bring more bad news, violence, right-wing groups trying to storm The White House, and legal action against a President of the USA, all our systems seem under strain and we do not seem to have solutions.
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What is happening?
?The exponential speed of change has made our systems outdated and put our social and environmental resources under pressure.
?‘Our disregard for the biosphere is causing a breakdown in natural environments becoming more imbalanced we see more extreme weather and unusual viruses looking for new hosts.[2]
?The democratic voting system is being manipulated by dangerous forces for their own ends. Social media is now a weapon. ‘Fake News’ everyone cries as the media giants Facebook, Google and others paint the picture they want.
?Nobody knows what is true and experts are mistrusted even by the governments who employ them.
?In a limited and finite environment, our economic policies are still based on Keynesian growth and Newtonian physics which deals in metrics based on free goods and infinite resources. The externalities of production and growth with ‘free goods’ like earth, water, forests, and oceans are proved to be no longer free and have an accumulating value increased by scarcity. One study estimated the market potential of the world’s natural capital assets to be worth four times the global GDP, which is more than $121 trillion USD[3] .
?There is plenty of evidence that the way we are living is unsustainable, but we still continue with business as usual.
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Why?
?Because we must not disrupt business. Our economic growth is more important than our survival.
?We cannot imagine any way that we can sustain life with any other economic model.
?This is very short-sighted.
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What do we need?
?We need to.
????Make the world more equal by distributing our wealth better
????Farm our Natural Assets in a responsible way to restore the biosphere stock
????Make alternative systems for growth
????Consider people in a different way - not by what financial value they add but by what holistic value they have
????Create an accurate and transparent system for granular real-time measurement of biosphere stock use and replenishment
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Unequal societies are worse for everybody
?‘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 but for the world’s poorest people recovery could take 14 times longer: more than a decade[4]
?The increase in the 10 richest billionaires’ wealth since the crisis began is more than enough to prevent anyone on Earth from falling into poverty because of the virus, and to pay for a COVID-19 vaccine for everyone.[5]
?Apart from a veneer of equality, not much has changed since the 18th-century industrial revolution. The systems, education, political, economic, and financial are all set up by the privileged to maintain the growth of their finances and businesses. The problem is they are consuming natural resources in the growth process.
?Whether it is Zuckerberg in his private jet, or Elon Musk promoting the sale of electric cars which increases carbon dioxide pollution does not lessen it - growth is using resources and the result of growth is unequal.
?It needs the underprivileged to provide cheap labour and pay taxes to keep the whole system afloat.
?‘In fact, the relationship is weaker for health than for many other problems—we looked at life expectancy, mental illness, teen birthrates, violence, the per cent of populations in prison, and drug use. They were all not just a little bit worse, but much worse, in more unequal countries.’[6]
?The more unequal we are the less we can be community-minded and the results can be seen most recently in those societies which have coped well or less well 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 measurements of a society, its health, the education level of its children, the numbers of its people in the prison system, etc., all suffer because of inequality.
?Even those at the top of the pyramid suffer!
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Alternatives To Growth
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Since the research by The Boston Consulting Group paper called ‘Total Societal Impact’, it is very clear that those businesses who concentrate on this holistic measurement of ‘good’ produce better results.
?This research covered more than 300 companies and clearly indicates that there is a link between, TSR (Total Shareholder Return), and TSI (Total Societal Return).
?‘a recent meta-study of over 200 papers revealed that 80% find that better ESG is linked with better stock price?performance.'[7]
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?In the oil and gas industry they found ‘ In oil and gas, for example, if median performers in the health and safety topic had an 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%.’
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So, it is possible to produce growth by using resources better and having a beneficial impact on the environment.
?Even if businesses have not widely understood this fact yet investors have.
?‘Total assets in sustainable investments grew from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020.’[8]
?This is an extraordinary figure bearing in mind the Covid Pandemic.
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?We could call this internal growth as it is an improvement in margin, not revenue and that is the key.
?It seems possible to improve profit growth by lowering a business's TSI or societal impact.
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Natural Assets
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So, if our former growth strategy is depleting Natural Assets and we have a way to grow by not depleting them we seem to have the key to the drivers to create a system where we can grow our efficiencies and reduce our externalities whilst benefiting the biosphere!
?As the concept of Natural Assets becomes accepted in 2021 now is the time for us to launch systems to promote this by accurately measuring the existing data.
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The System
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We will create.
????A cryptocurrency to exchange value in a blockchain marketplace
????We will 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 for investment in the best-performing businesses measured with a new metric
????Consumers will be rewarded for buying the most sustainably produced products
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A Call to Action
?By linking a reward system to the key stakeholder groups we can deliver what the World Economic Forum has called ‘The Global Stakeholder Model’[9] ‘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.
But equally, it should be clear they have specific objectives that make them 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.
?????????Companies aim to generate an economic surplus, measurable in?profits?in the short run, and?long-term value creation?in the long run
?????????And the overarching goal for the international community is to preserve?peace
?It leads to the?stakeholder model?as we know it today, valid anywhere in the world. When the well-being of people and the planet are at the centre of business, the four remaining key groups of stakeholders contribute to their betterment. As all of these groups and their goals are interconnected. One cannot succeed if the others fail.’
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The Virtuous Circle?
?The key to this whole system is measurement and reward in the short term. By measuring the data in a granular way, we can produce an app measurement and reward system to change people’s behaviour and the way they think which will bring prosperity and security to all.
?There is no other way to produce global economic prosperity and the survival of our species. Be clear the planet will survive.
?The ironic thing is that The Global Stakeholder Model will make money as well!
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[1] ?https://www.city-data.com/forum/economics/3236273-please-explain-wealth-inequality-country-2020-a.html
[2] https://timesofindia.indiatimes.com/articleshow/79973673.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
[3] https://www.unep-wcmc.org/system/dataset_file_fields/files/000/000/232/original/NCR-LR_Mixed.pdf?1408446708
[4] https://charterforcompassion.org/understanding-our-differences-and-similarities/why-everyone-suffers-in-unequal-societies
[5] https://oxfamilibrary.openrepository.com/bitstream/handle/10546/621149/bp-the-inequality-virus-250121-en.pdf
[6] Richard Wilson https://charterforcompassion.org/understanding-our-differences-and-similarities/why-everyone-suffers-in-unequal-societies
[7] https://www.bcg.com/publications/2017/corporate-development-finance-strategy-insights-total-societal-impact-five-industries
[8] https://www.msn.com/en-us/money/savingandinvesting/socially-responsible-investing-how-to-get-started-in-6-steps/ar-BB1coFJa
[9] https://www.weforum.org/agenda/2021/01/klaus-schwab-on-what-is-stakeholder-capitalism-history-relevance/