Posts

 

To coincide with the 10 year anniversary of the publication of the Report by the Commission on the Measurement of Economic Performance and Social Progress, the Carnegie UK Trust is publishing a series of blogs which outline the approach taken to measuring and improving wellbeing by different governments, organisations and initiatives around the world.

 

 


By Kate Forbes, Cabinet Secretary for Finance, Scottish Government

Delivering wellbeing to the people of Scotland is embedded at the centre of Scotland’s National Performance Framework (NPF) and is key to the Scottish Government’s approach to the economy, which seeks to deliver wellbeing through sustainable and inclusive economic growth.

The goal and objective of all economic policy should be collective wellbeing. This broader approach is at the very heart of our Economic Strategy, published in 2015, which gives equal importance to tackling inequality as economic competitiveness.

A key limitation of traditional measures of the economy, most notably GDP, is that they are limited in what they can tell us about the distribution of income and wealth across society, the components of economic growth and whether that growth is sustainable for future generations.  Traditional measures of economic performance do not capture many of the drivers of wellbeing and the things that matter to people – for example health, living standards, quality of environment, security of employment, civic engagement and so on.

Sustainable and inclusive economic growth enables us to look beyond simple headline measures to consider outcomes across a broader range of performance criteria to allow for a more rounded assessment of the quality of our economic system and the distribution of economic opportunities across Scotland’s people and places.

Scotland, by putting wellbeing at the heart of everything we do, is on a journey and we have significant roads still to travel. There are other countries taking a similar approach to tackling some of the big defining challenges that the world currently faces. We know we can learn from international organisations and countries across the world, and share with them our experiences, which is why in 2018 Scotland and partners established the Wellbeing Economy Governments group, or WEGo as it is known.

In WEGo, the Scottish Government is working alongside Iceland and New Zealand – and in the coming year we expect to be joined by one or two new members – to promote sharing of expertise and transferable policy practices among governments who have a shared ambition of deepening their understanding of delivering wellbeing through their economic approach. Our countries have a lot of similarities but also face lots of different challenges. WEGo provides a forum to exchange ideas on our shared priorities and aims to move the idea of wellbeing economy from theory into practice.

A key activity of the group is the Economic Policy Labs, and the first of these were held in Edinburgh in May 2019. One of the areas discussed there was wellbeing budgeting. New Zealand published their first wellbeing budget in that month and their experience, and what we have learnt through our group, has informed activities both here in Scotland and in Iceland. Prime Minister Katrín Jakobsdóttir has set out that a wellbeing budget is being developed in Iceland. Here in Scotland, the budget that I presented to Parliament in February 2020 put wellbeing and fairness at its heart, prioritising actions that have the greatest impact on improving lives across Scotland now, and creating the conditions that are required to ensure wellbeing for future generations.

As Cabinet Secretary for Finance, I am keen to continue, both to collaborate with like-minded countries and to develop our own wellbeing budgeting approach for Scotland. Delivering the outcomes set out in the NPF should be at the centre of how we allocate and spend resources.

But building a wellbeing economy is not the role of government alone. Whilst governments should show leadership – and I believe the Scottish Government is already doing that, see the TED talk given by First Minister Nicola Sturgeon in July 2019 – individuals, businesses and organisations across our society have a big role to play. We are committed to working with all those seeking to advance the concept and the reality of a wellbeing economy, both now and in the years ahead.

Finally, as we see the impact of the COVID-19 pandemic globally and how it is changing people’s lives, what they value, how they work and interact with each other, a wellbeing economy framing with strong public services seems so obvious. Out of this crisis we will hopefully see a greater emergence of this approach in economies across the world.

Reposted from Carnegie UK Trust website

 

James Vaccaro, Triodos Bank

If people feel they cannot be seen by anyone else it brings out the worst in them. If they feel part of a community, this brings out the best in them.”
James Vaccaro, Special Advisor at Triodos Bank

In business, the value of stakeholder engagement is often not fully appreciated. The results of such engagement usually only become visible in the mid to long term. When we consider social and environmental impact as part of business, we need the long-term support of our stakeholders. 

Recognizing the role we play in the wider system and in our industry can make what we do much more powerful. There are three levels in which we see community play an essential role in supporting business in the wellbeing economy: 

Genuine and balanced supplier relationships 

Suppliers form one of the three most pivotal relationships we have at work alongside customers and colleagues. Yet how often do we think of them as part of our community? How balanced is the relationship we have with them? 

It might be the case that our suppliers are larger and more powerful than us or vice versa. Regardless of which way around it is, genuine and balanced relationships can be forged if businesses go beyond compliance to a deeper relationship of shared values. 

Often it is easier just to tick a box, but we have seen that the most forward thinking businesses go deeper to cultivate relationships based on shared values…and why wouldn’t they? 

Building relationships with suppliers around a shared purpose and with similar value sets can increase reliability and simplify collaboration.

As the economic systems begin to transform, will we only be able to succeed by treating suppliers as a vital part of our community.

Ultimately the boundaries around organizations will become less fluid. What we will see will resemble an organizational ecosystem rather than large organizations.”
Daniel Christian Wahl, author

 

 

Finding your place in the community

Often as a business, we choose to locate our offices and sites based on accessibility, tax rates and employee wages. But how much do we consider our relationship to the communities we are a part of?

Business can be a catalyst for exchanging knowledge and collaborating at the local and regional level, generating value in their location and beyond. Through working with other local stakeholders early on, a business will find how  it can contribute to supporting a vibrant local area. 

Rehema Isa, Womanomics

We need collaborative creation processes to define and design together what wellbeing means in each organization and local context. We need access to spaces that allow us to be part of the change scenario and explore how we can contribute to the ecosystem.”
Rehema Isa, Womanomics

 

 

Depending on local conditions a businesses contribution could look different, for example: ensuring that employees get safely to their workplace and back home during a night shift or supporting local governments with education around waste management and recycling. 

Recognizing your role in the wider system

Being a pioneer is not easy, but if we want to achieve change in our sector, we need the ability to recognize the potential that comes with forging a new path. 

No matter if you work in the chocolate industry, banking, hospitality or reforestation, hearing how challenges were experienced and solved by other leaders can give us inspiration. Understanding where luck and human connection made a difference, gives us courage to take up the challenge of rethinking business as usual.

We at Triodos are an important drop in the ocean, but we remain a drop in the ocean. Only if we recognize our place within the wider systemic spectrum can we really have an impact.
James Vaccaro, Special Advisor at Triodos Bank

 

Many organizations that provide support to businesses have recognized the importance of communities of practice. Organizations like the Impact Hub have based their business model on the value they provide through an active community of support.  

That’s why communities of practice provide great support to leaders and changemakers:

We see ourselves as a provider of credit and capital. However we also provide value in being at the centre of a community and therefore play an important social function.
James Vaccaro, Special Advisor at Triodos Bank

 

 

By Isabel Nuesse

On October 10th, WEAll Scotland held an event in Edinburgh in collaboration with Baillie Gifford and the Global Ethical Finance Initiative.

“The transition to a sustainable economic system: what’s the role of finance?” raised questions of the future of finance and how the sector can adapt to the challenges of the 21st century. The speakers were Frank Dixon of Global Systems Change, Jessica Runicles of Business in the Community and Andrew Cave of Ballie Gifford, hosted by WEAll’s Lisa Hough-Stewart.

Frank Dixon presented his concept of System Change Investing (click to download PDF) as a proposal for an approach the finance sector could take, modelled on his extensive experience developing SRI frameworks. He questioned, what if the finance sector applied the rule of law (“do no harm to others”) to their thinking? How would that effect the systems that make up the sector as well as the investments that are made inside it? He argued that investing in systems change is the most important action needed to solve climate change and address the Sustainable Development Goals.

The conversation then evolved into speaking about the role of business in environmental and social governance. Jessica Runicles emphasised how important it is for financiers to educate businesses on their opportunities to become more responsible. While explaining the Responsible Business Map she talked of some challenges she has with businesses not grasping the profitable opportunities better business can present.

Our final speaker was  Andrew Cave from Baillie Gifford who had the audience watch this video, “Corporate Scandals that Changed the Course of Capitalism.” He spoke about Baillie Gifford’s long term investment and engagement strategies and their new communications approach which emphasises the need for investors to “help shape the new world – not just shore up the old one”.

After the speakers presented, we had a panel discussion where the audience was able to ask questions. It was clear that education is a huge missing piece in elevating the role of finance in society. It was discussed that radical transparency is also necessary to increase the understanding of how the finance sector works and more specifically, how individuals and business can take more aggressive steps to move money into more socially responsible initiatives. The event provided a valuable opportunity for finance professionals and other interested attendees to share their challenges in creating change openly and honestly, and it was the start of a valuable conversation that WEAll will continue to drive forward.

Follow @WEAll_Scotland to find out about other upcoming events in Scotland. If you’re interested in getting involved with WEAll’s work on finance within Scotland contact us here.

 

Reposted from Junxion 

Capitalism is suffering from a crisis of legitimacy and nowhere is that truer than in the banking sector. Following the 2007/8 crash, banks have focused on compliance and getting their house in order, but they have broadly failed to win back the trust they lost.

Working together in a process convened by the UN Environment Finance Initiative (UNEP FI), a group of 30 banks have developed the Principles for Responsible Banking—a framework for all banks to show that they understand their purpose is to serve and contribute to meeting society’s needs and individuals’ goals. Following a six-month global consultation, the final version of the Principles and supporting documents were released this week (July 25, 2019). The Principles will be opened for signature on 22 September 2019 at the UN General Assembly.

To cite r3.0—the multi-stakeholder platform that promotes Redesign for Resilience and Regeneration of which Junxion is an Advocation Partner—it’s the kind of ‘radical collaboration’ needed for system change. The Principles for Responsible Banking aim to create nothing less than the sustainable banking system of the future.

Who’s involved?

The 30 founding banks come from around the globe and include China’s ICBC—the world’s largest bank—BNP Paribas, Barclays, Citi, National Australia Bank, BBVA and South Africa’s Land Bank. A further 40-plus banks have committed to becoming signatories and these include Standard Chartered, ABN-AMRO and Amalgamated Bank from the US.

There are also a number of non-bank endorsers of the Principles—banking organizations such as the European Banking Association and the World Savings Bank Institute as well as specialist service providers such as Datamaran and responsible investment advocates such as ShareAction.

What are the Principles for Responsible Banking?

The Principles for Responsible Banking are a framework for all banks to show that they understand their purpose is to serve and contribute to meeting society’s needs and individuals’ goals.

The six principles signatory banks commit to are:

  1. Alignment We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.
  2. Impact & Target Setting We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services. To this end, we will set and publish targets where we can have the most significant impacts.
  3. Clients & Customers We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
  4. Stakeholders We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.
  5. Governance & Culture We will implement our commitment to these Principles through effective governance and a culture of responsible banking.
  6. Transparency & Accountability We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals
How will banks implement the Principles?

Within four years of signing the Principles banks must fully implement the three key steps of analyzing positive and negative impacts, target setting and implementation, and reporting on progress.

The impact analysis has to ‘identify the most significant (potential) positive and negative impacts on the societies, economies and environments where it operates’ and identify the business opportunities to increase the positive and decrease the negative ones.

Secondly, banks have to set two or more targets covering at least two of the priority impact areas. These targets have to be SMART (specific, measurable, achievable, relevant and time-bound). Banks have to begin taking steps to meet the targets, including establishing a governance and oversight structure to monitor progress.

Thirdly, banks have to publish their impact analysis and report their progress in implementing the Principles and meeting their targets, and this self-assessment has to be subject to limited assurance.

So what?

A responsible business professional might say this is sustainability 101 for banks: Set a vision, improve performance with the help of some targets, engage with all the people that matter in the shape of your customers and stakeholders, look at how you make decisions and your company culture and report on progress.

But it’s not just any old vision that the banks can set for themselves: it’s a vision of what the world needs. The draft Implementation guidance for Principle 1 talks about ‘creating consistency between the bank’s value creation model and the SDGs and the Paris Climate Agreement …’. This is big: the Principles are normative, explicitly calling on banks to work towards how the world should be.

It’s not just any old vision that the banks can set for themselves: it’s a vision of what the world needs.

And this theme is continued in Principle 2 about measuring impact and setting targets. On the face of it, that looks like any sound sustainability programme. But those targets have to meet or exceed the targets in the SDGs and the Paris Climate Agreement. Again, signatories have to contribute explicitly to what society needs.

And if those targets are judged to be failing to address that bank’s most significant targets or are not in line with the ambitions in the SDGs and Paris, then that bank can be removed from the signatory list. So, the Principles have teeth.

Will the Principles achieve any real change?

There are definitely reasons to be cheerful. The Principles elevate sustainability to the strategic level—this is more than some risk analysis on an individual transaction or an ESG (environmental, social and governance) screen on a particular portfolio. The Principles are saying society’s goals have to form an integral part of banks’ own strategic objectives.

And they are deliberately designed so banks can ‘start where they are’. No matter their starting point or context, developed or developing country, banks can get on board so the Principles create a framework for the global banking industry.

A key determinant of how much progress banks will make to delivering on the promise of the Principles lies  in the interpretation of ‘alignment’—a question that was raised In the public consultation that just closed. The official answer is that ‘Alignment requires that a bank’s business strategy is consistent with and geared towards making a positive contribution to the SDGs, the Paris Climate Agreement and relevant national or regional frameworks, where a bank is best positioned to do so through its business.’

This is clearly designed to leave space for individual banks to make their own judgement. But James Vaccaro, director of strategy at the ethical Triodos Bank, one of the founding banks that led the development of the Principles, is confident that the Principles are well designed to achieve change across the banking system:

“We have our ‘light on the hill’ in the shape of the SDGs and Paris and we have that ‘ramp effect’ where companies make progress as they individually go through their iterations of analysis, engagement and implementation. But crucially there is sharing between the individual signatory institutions as well. And that means you will have a race to the top, which creates the right conditions for non-linear change and the potential for the banking industry to take some really big steps towards the world we want.”

What’s the big opportunity here?

This is much more than a voluntary industry initiative that banks glibly sign up to, warns Madeleine Ronquest, Head of Environment, Social and Climate Risk at South Africa-based FirstRand Bank—also a founding bank of the Principles:

“We want to properly apply our minds so that the process and the information we publish will stand up to scrutiny. And there is a lot of groundwork that needs to be done in advance, engaging critical stakeholders, internally and publicly, spending as much time as may be required and being as inclusive as possible. The Principles are very aspirational and very ambitious and that was the intention in developing them. Signing them represents a serious commitment.”

The real opportunity of the Principles is to convince a sceptical world that businesses can and will collaborate for the common good.

So, they are not going to be easy to implement—but we all know they are necessary. The Principles represent an outstanding opportunity for the banking industry to do the right thing. To demonstrate that they are serious about backing up their social purpose statements with real impact that ‘achieves shared prosperity for both current and future generations’, as the Principles’ mission statement says.

And given the crucial role that finance plays in society’s collective efforts to create a better future, there is a lot riding on how banks step up here. It’s more than securing their own legitimacy and creating the sustainable banking system of the future, it’s about financing the change we need to see in the world.

Even more than that, we need these industry initiatives—these ‘meso-level’ activities in r3.0 parlance – to succeed and society has to see that they do. The real opportunity of the Principles is to convince a sceptical world that businesses can and will collaborate for the common good.

It’s what we at Junxion call being ‘audacious, together’. It is leadership.

 

Adam Garfunkel is an owner and Managing Director at Junxion. For more than 20 years, he’s been involved in corporate sustainability initiatives and led the team that created the communications strategy for the Principles for Responsible Banking.

This elections year, it is hard to imagine that European citizens will be satisfied with shallow political promises: they are furiously standing up against business as usual.

All over Europe, youth climate strikers are hitting the streets of cities and pushing to exit our brown, fossil fuel-based economy, which is supported by financial investors because it is (still) more profitable. In France, ordinary working people put on their yellow jackets and staged roadblocks for the whole of winter to protest against the government’s pro-finance, pro-business economic programme. In Greece, pensioners have held countless demonstrations against austerity policies, which led to cuts in their pensions, medicines, health insurance and to social exclusion in order to repay large amounts of borrowed money that mainly bailed-out German and French banks.

In actual fact, all these protests are linked because our environmental and social crises are consequences of the politics of financialisation that have transformed our entire economies and lives over the last thirty years.

Finance Watch has a clear vision how we can reform our financial system, but how ambitious are EU policymakers to make finance serve society?

We have checked the financial reform proposals of all EU Political Groups ahead of the European elections against a set of policy demands we think are key. Find out how the parties scored in our Finance Watch Guide to the #EUelections2019

We have analysed and rated the commitments separately in four areas of policy changes needed to make finance serve society:

  1. Stabilize the financial system,
  2. Democratise the financial institutions as well as financial policy making,
  3. Re-direct capital to a sustainable economy and
  4. Prepare for a future financial crisis.

What you can do

Blog by Stewart Wallis, WEAll Chair

 

 

Seven years after first speaking at a Global Alliance on Banking and Values (GABV) summit in Vancouver, it was wonderful to be back doing the same again.

GABV is a member of WEAll and in turn WEAll is a partner of GABV, working together to pursue economic system change and transform the financial system within that.

Hosted by GABV member bank Vancity, this year’s summit was a huge and dynamic gathering with between 400-500 participants. The theme spoke to the multiple challenges of our era: “Migrants, #MeToo, and Melting Icecaps…Redefining Banking for a Radically Different Future.”

It was a privilege to share the stage with wonderful keynote speakers:

Sheila Watt-Cloutier: Author and Activist, Canada from Inuit Nation who spoke so movingly about climate change. “If you protect the Arctic, you save the plan

et,” she said. “What happens in the Arctic does not stay in the Arctic. Everything is connected through our common atmosphere, not to mention our common spirit and our common humanity.”

Tima Kurdi: Author of “The Boy on the Beach” and aunt of Alan Kurdi, whose tragic image shocked and moved the world in 2015. Tima evoked the most powerful expression of our common humanity and our common responsibility I have ever heard. The whole room was in tears following her speech.

Musimbi Kanyoro: CEO of the Global Fund for Women. She issued a clarion call for more power for women and girls worldwide combined with practical next steps.

John Fullerton: President of Capital Institute (a WEAll member organisation and we’re working together closely on hubs.) John gave the public address on the first evening and brilliantly laid the ground for my panel the next day. He stressed clearly the need for system change rather than incremental reform

In my panel I focused on the need for the economic system to be based in human and ecological wellbeing. I started by saying that yesterday humanity exploded 250,000 Hiroshima size level atomic bombs in our oceans…not literally, of course. However, the latest research shows the heat being released in the oceans is equivalent to 3-6 atomic bombs per second.

I then talked about income inequality, highlighting that last year the richest 28 people on the planet had the same wealth as the poorest 3.8 billion and the wealth of the billionaires went up last year, while the wealth of the poorest went down.

When we consider how these crises are interacting, we shouldn’t be surprised that our politics is going the way that it is. Fundamentally, the economic system we’ve got is broken, it’s dangerous and it’s violent. We’ve got to call it as it is and urge those with imagination to create a different economic system: one that’s got well-being of both the planet and humans and that puts regeneration at its heart.

The economic system had been changed twice in the 20th century and with collaboration, determination and imagination we could do so again. A new movement may never have an elite power base and billions of dollars in funds behind it, but it can have millions of hearts and hands. What WEAll is trying to achieve is bold, vital and entirely possible.

After the panel, I led a breakout group on changing the system through partnership. The interest in system change can be judged by the fact that about a quarter of the participants joined this group when they had 12 groups to choose from! A key proposal from this group to the GABV CEOs was that GABV banks could lead in their communities/cities/regions in bringing together other actors to form system change hubs. This is an exciting idea for WEAll and we will be exploring this further with GABV.

As always, some of the joys of such an event are the contacts and discussions outside the conference hall. I had discussions with some of the GABV member banks about specific collaboration, initiated conversations with four potential WEAll member organisations, identified potential participants for the Finance Cluster and agreed a set of detailed collaborative actions with Sandrine Dixson-Decleve , Co President of The Club of Rome (another WEAll member). Perhaps most energising of all were discussions with the Young Leaders Delegation at the Summit. They want to form a Youth hub in Vancouver so I can’t wait to put them in touch with WEAll Youth.

Finally, it was so refreshing to be with a group of bankers who want to change the world!

 

On the ten year anniversary of the collapse of Lehman Brothers, and the financial crash, we think that #WEAll can do better. We can build a wellbeing economy. #10yearson

English version:

Spanish version:

Diez años después, ¿podemos cambiar?

¿Podemos crear una economía basada en las personas? #10añosDespues #10yearson #WeAll

Posted by PlayGround on Friday, September 14, 2018

Video by Playground