The immediacy of the unemployment levels before the world through the 1929 Great Depression allied to a debt owed by government to those who fought in and supported the war encouraged a vigourous response to tackle the so-called five giants of want, ignorance, disease, squalor and idleness.
It is too early to tell the longer-term impact of the coronavirus but the covid-19 diseases “has shaken our habits and beliefs, and caused us to question capitalism,” according to Sir Ronald Cohen writing in today’s Financial Times.
Sir Ronald, who chairs the Global Steering Group for Impact Investment and is author of ‘Impact: Reshaping Capitalism to Drive Real Change’ and keynote speaker at the GCV Digital Forum 2.0 on 29 September, was writing to highlight Harvard Business School’s impact-weighted accounts initiative, which is led by George Serafeim.
“The Wall Street crash of 1929 made investors realise they were investing without understanding the true profits of companies. So, in 1933, the US government required all companies to prepare their financial accounts according to ‘generally accepted accounting principles’ and have them verified by independent auditors. This is now the norm….
“Some 90 years on, the Covid-19 crisis has highlighted a similar problem. This time, it is the measurement of companies’ social and environmental impacts that must be made transparent.”
The initiative estimates the environmental impact of more than 1,800 companies, based on public information, and next year will add employment and product impacts.
For example, the operations of Sasol and Solvay, two chemical companies with sales of around $12bn each, created environmental damage of $17bn and $4bn a year respectively, Sir Ronald said.
Others are calling for universal basic income as part of the solution to this generation’s issues (Massive Attack’s new track) and/or wealth taxes on the rich.
People are being “driven by a rejection of glaring inequality, unjust discrimination and indifference to the degradation of our environment,” Sir Ronald notes.
He added in the FT: “The way out of our dangerous predicament is to measure and value companies’ impacts according to ‘generally accepted impact principles’, and to reflect them in financial accounts that show impact-weighted profits.”
