1. http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg
Finance for Sustainability
Bard MBA in Sustainability Launch Event
January 24, 2012

3. 1. Our UNSUSTAINABLE economic system1. Our UNSUSTAINABLE economic system

4. “Safe Operating Space” -- The world is full
“Safe Operating Space”
- National Center for Ecological Analysis and Synthesis

5. Symptom: Increasing Wealth Inequality
http://www.inhabitat.com/2010/10/14/worlds-largest-and-most-expensive-family-home-completed/
Wealth Disparity:
•2% of population Controls > ½ the World’s Wealth
•50% of population controls < 1% of World’s Wealth
•Income gaps between rich and poor > 2X in last 50 years
Spain
Denmark
Norway
Finland
Sweden
Netherlands
Switzerland
Belgium
Germany
Austria
France
Canada Italy
Australia
Ireland
Greece
New Zealand
UK
Portugal
Japan
USA
Better
Low Wealth Gap
Wellbeing
Worse
High
Wilkinson & Pickett,
The Spirit Level (2009)
Wealth Gap vs.
Wellbeing

6. 2. How we got here2. How we got here
Our economy has become an anti-economy, a financial system
without a sound economic basis and without economic virtues.
- Wendell Berry

7. Economic Efficiency
Economy
Finance
What’s wrong with this picture?Desired Outcome
Planet

8. The most important chart
in the world…

9. Sustainability Optimum
Efficiency
100%
0%
Resilience
Source: Lietaer, Ulanowicz, Goerner 2008
Sustainability in Natural Systems
Collapse of
Financial System

10. 3. Finance: Critical acupuncture point3. Finance: Critical acupuncture point

11. Sustainable finance: bottoms upSustainable finance: bottoms up
• Internalize externalities
- CSR, ESG
• New tools
- Integrated reporting
• New (and old) ideas
- Impact investment

12. Sustainable finance: top down (systemic)Sustainable finance: top down (systemic)
We are lost in finance…
• What is an “IRR” when we know
everything is connected
• What will replace MPT which sees
risk as historical SD in a world
facing “phase shift” uncertainty?

13. Stranded Assets: our $20 T “Big Choice”Stranded Assets: our $20 T “Big Choice”
• 2 degree warming limit: 565 GtC02
• “Proved Reserves” have 5X this amount
• 74% owned by States, 24% by companies
At current market value, $20 Trillion choice
Source: “Unburnable Carbon”, Carbon Tracker Report

14. Resiliency: Driving financial capital upstream
http://3.bp.blogspot.com/_o0s746IzxZQ/TJwMEtnPvsI/AAAAAAAAAWo/lX-2e-
wPZzo/s1600/upstream.jpg

15. John Fullerton
jfullerton@capitalinstitute.org
www.capitalinstitute.org
Thank youThank you