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Transforming Finance 2.0

Asset managers look ahead to reform finance for the people and the planet.

Submitted by: Hazel Henderson

Posted: Dec 15, 2011 – 04:56 PM EST

Tags: ethics, financial transactions tax, occupy wall street, economy, impact investing


Ethical Markets Media (USA and Brazil), Susan Davis, President of Capital Missions Company (USA and Ecuador) and I co-hosted the Reunion of Pioneer SRI Asset Managers at Henderson-Schumacher Library and Conference Center in St. Augustine, Florida last month (Nov. 18-20th).  The participants, both present and virtual, comprised a "who's who" of the industry.

Building on our Transforming Finance initiative and statement of 2010 that finance is part of the global commons and must return to serving not exploiting people, their communities and the Earth, the group reaffirmed their commitments to continue their pioneering reforms. 

Notably, there was wide agreement on the need for the now-popular financial transaction tax (FTT) which had seemed radical to some in 2010 at our Transforming Finance 1.0.  The FTT is now embraced by many European countries and the G-20 after widespread campaigning for this "Robin Hood Tax" by Attac, OXFAM and many global CSOs.  Governments impoverished by their foolish bailouts of bankers and bondholders are now desperate for new revenues.  Many see the FTT as the best way to downsize the global financial bubble, curb high-frequency trading without hurting real investors and raise billions to restore their budgets and other reforms in my discussion scenario, Looking Back from 2010. Alan F. Kay, founder of AutEx, and I had proposed an FTT in the 1990s and developed a patented computer program to simplify its collection, FXTRS.  Proposed first by James Tobin in the 1970s, I preferred to call FTT the Larry Summers tax, citing his 1989 paper, as did John Fullerton in recent testimony before the US Congress.

Our Pioneers Reunion produced several reform proposals, including proposals on how to resolve the still-festering housing crisis and reform Fannie and Freddie.  Many agreed on the need to expand the range of SRI asset classes and investment products; reform asset-allocation and risk models; grow the pool of ethical, green funds as tracked by our Green Transition Scoreboard®; re-design money-creation and credit-allocation, and reverse the unfairness of the US economy.

All support the initiatives of the now-global Occupy Wall Street and 99% movements. We also called for a new era recognizing humanity's oneness and to prioritize cooperation and the common good. 

A profound debate emerged at the meeting's end and in continuing emails concerning the appropriateness of the recent term "impact investing," promoted widely by Andrew Bugg-Levine and Jed Emerson. They seek to replace current terms and brands: SRI, ESG, CSR, triple bottom line, ethical, green, low carbon, as old-fashioned. Yet, many asset managers and investors see "impact investing" as evasive and concealing deep values and goals. All investments have impacts! Some blow the tops of mountains, pollute water. Others help villagers in Africa. Why not be up front and clarify values underlying investments? Or is this simply a new "brand," market-positioning and a way to persuade mainstream asset managers?

We all agreed to meet again November 2012 here in the nation's oldest European city.

Readers: What do you think about the FTT? The term “impact investing”? Tell us your thoughts on Talkback.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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