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July 2019

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A united future begins as a tangled mess

In trying to explain Donald Trump’s stunning election as U.S. President, Stephen Harper – in his latest book, Right Here, Right Now: Politics and Leadership in the Age of Disruption – identified a divide between “those who live somewhere” and “those who live anywhere”.

The ‘”somewheres,” on the one hand, are the typically common folk in society. They fix boilers, grow food, and drive buses or taxis. They are the ‘locals’ who keep communities ticking over.

The “anywheres,” on the other hand, do not rely on any given place. They work for international businesses, or have university degrees which give them freedom to choose from a pool of nations where they can make their living. Their work, in the long run, helps to integrate nations into the growing global community.

Somewheres, according to Harper, make up the majority of the population in Western countries; but he claims the anywheres have been dominating politics – that is, until the recent shift in political trends, resulting in Brexit, Trump, Boris Johnson, Le Pen, Doug Ford, etc.

Harper believes ‘somewheres vs. anywheres’ (an idea borrowed from British journalist David Goodhart) is the new divide in present day political fault-lines; and he advocates populist conservatism (which, he confesses, is really just conservatism) as the solution.

In regards to policy, he writes:

Conservatives should remain pro-market, pro-trade, pro-globalization, and pro-immigration at heart. Going in a completely opposite direction in any of these areas would be a big mistake with serious ramifications. But being pro-market does not mean that all regulations should be dismantled or that governments should never intervene. Being pro-trade does not imply that any commercial arrangement is a good one. Being pro-globalization should not entail abdicating loyalty or responsibility to our countries. And being pro-immigration should never mean sanctioning the erasure of our borders or ignoring the interests of our citizens.*

In short, being pro-something is not an excuse for ideological tangents.”

With all respect to Harper – I genuinely think that his observations are astute – he seems, contrary to his stance of anti-ideology, attached to his conservative values.

Proposing conservatism as our solution is akin to a commercial with no relevance to the product it is supposed to advertise. 

Here’s a fictional example: a Zen master speaks beautifully about what it takes to become a guru; then it is revealed that he is eating a Big Mac.

Similarly to that commercial idea (I’ll be expecting a cheque, McDonald’s!), there is real wisdom in Harper’s reflections; but conservatism, like the Big Mac, is not the answer.

The somewheres vs. anywheres situation feels, to me, like a struggle between the old world and the new world – between the comfortable nostalgia of the past and the potential grandeur of the future.

In resolving this division, it is important to first recognise that somewheres and anywheres actually need each other. 

Somewheres need anywheres to provide the Western ideals, and the promise of a brighter future; anywheres need somewheres to keep everyday society going.

There is, then, importance in Harper’s beloved conservative values: in striving for the ideals of the future, we shouldn’t forget where we’ve come from.

In the same way that a flower cannot grow without its roots, our future, globalised society won’t grow without our (already established) foundations. Tearing our roots apart – no matter how tangled and distorted they have become – will create more problems than it solves.

Nonetheless, we are experiencing what is, arguably, the greatest revolution in the history of civilisation: the digital revolution. 

The lifestyle – and potential – of the human race has evolved enormously in a miniscule amount of time … and the changes we have seen could yet prove to be the tip of the iceberg.

The new, seemingly infinite world of the internet, and the rapidly improving technology at our disposal, is not something that can be governed by the traditional nation states that populist conservatives are so fond of.

And while Harper acknowledges the need to be pro-globalisation, he is also dismissive of the global community’s relevance, describing it as “a mere notion.” But, similarly, all nation states also started out as abstract concepts; and in a world where the internet/social media are so relevant, the global community is more real than ever.

There must have been something in pre-historic times that forced tribes to work together; and our current situation as separate nations mirrors that in a number of ways.

These circumstances hold the potential to deliver an exciting future; but they also hold the potential of a frightening one. For that reason, it is vital that such delicate times are dealt with intelligently and carefully. There is no point of reference in history for how we might fare in this digital/technological age, so traditional conservatism alone is not the answer.

We need an eclectic, innovative approach. It’s true that we should conserve and protect our roots; but we should also actively nurture our global community, because there are too many problems that nation states cannot solve alone.

Still, these divisions stand stubbornly in the way of such sensibilities. It is becoming increasingly important for people and countries to listen to each other: but are humans capable of that? I’m still not sure.

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Right Here, Right Now: Politics and Leadership in the Age of Disruption (2018).

Expert Panel on Sustainable Finance warns International investors are leaving Canada

Sustainable finance is focused on harnessing the financial sector to assist and enable companies and allocate capital in a more climate aware manner to mitigate and adapt to climate change. It grew from making investments in green technology to financing companies and communities transitioning to low-carbon environments.  The goal is to build resilience to the widespread impacts of climate change and prevent further exacerbation. The industry has grown significantly with international regulators beginning to add climate change to their risk assessments. Unfortunately, according to the federally appointed nonpartisan Expert Panel on Sustainable Finance, the system as a whole has been far too slow to act, resulting in a significant risk that Canadian companies and communities fall behind in making necessary adjustments transitioning to low-carbon economies.  The lack of focus on climate change exacerbates risks and overlooks opportunities available to Canadian companies.

Canadian companies slow to transition to low-emissions operations are finding it hard to compete internationally.

The panel calls for “a concrete vision and capital plan for Canada’s course toward a competitive low-emissions, climate-smart economy; offering Canadian businesses, financial firms and individuals the ability to connect with that vision through investment and savings; and ensuring that government and industry join forces to pursue opportunity and manage risk.”  

The Expert Panel on Sustainable Finance created a roadmap for the public and private sectors by prioritizing a number of accountable steps needed to make Canada more likely to experience a smooth and successful transition to lower carbon. This involves decoupling economic growth from growth in emissions, protecting our savings and investments, and insuring that our infrastructure can handle the changes ahead – this will position Canada well in the global arena  

The panel is made up of Royal Bank of Canada board director Andy Chisholm; former Bank of Canada deputy governor Tiff Macklem (Dean of Rotman School of Management); Kim Thomassin, executive vice-president at the Caisse de Dépôt et Placement du Québec; and Barbara Zvan, chief risk and strategy officer at the Ontario Teachers’ Pension Plan.

Some highlights from the report include:  The need for a long-term vision for a climate-smart economy; the need to include climate related risk into regulation of Canada’s financial system; the need for broader awareness and education in the retail investment space; and the need to accelerate the development of a building retrofit market. 

The report is thorough and offers 15 recommendations with detailed strategy and suggestions on who might lead each initiative. Below is a brief synopsis of the report, written around three “pillars” to building a stronger, sustainable vision for the country. 

Pillar I: Ways to turn climate change into an opportunity for all Canadians.  

  1. Map Canada’s long-term path to a low-emissions, climate-smart economy, sector by sector, with an associated capital plan. 
  2. Provide Canadians the opportunity and incentive to connect their savings to climate change objectives.
  3. Establish a standing Canadian Sustainable Finance Action Council (SFAC) with a cross-departmental secretariat, to advise and assist the federal government in implementing the Panel’s recommendations. 

Pillar II:  Building blocks for mainstream engagement on sustainable finance in Canada.

  1. Establish the Canadian Centre for Climate Information and Analytics (C3IA) as an authoritative source of climate information and decision analysis. 
  2. Define and pursue a Canadian approach to financial disclosure of climate related issues utilizing the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD). 
  3. Clarify the scope of fiduciary duty in the context of climate change. 
  4. Promote a knowledgeable financial support ecosystem – a shortage of professional training, education and collaborative exploration on topics related to sustainable finance is causing a critical proficiency gap.
  5. Embed climate-related risk into monitoring, regulation and supervision of Canada’s financial system. 

Pillar III: Developing and scaling market structures and financial products that could offer transformative economic benefit to Canada in building a low-emissions, climate-smart future.

  1. Expand Canada’s green fixed income market, and set a global standard for transition-oriented financing. 
  2. Promote sustainable investment as ‘business as usual’ within Canada’s asset management community.
  3.  Define Canada’s clean technology market advantage and financing strategy.
  4. Support Canada’s Oil and Natural Gas industry in building a low-emissions, globally competitive future.
  5. Accelerate the development of a vibrant private building retrofit market.
  6. Align Canada’s infrastructure strategy with its long-term sustainable growth objectives and leverage private capital in its delivery.
  7. Engage institutional investors in the financing of Canada’s electricity grid of the future

(For the full detailed report click here)

The expert panel believes that “Canada has the financial expertise, technological capacity and resource wealth to emerge as a “global leader in climate-smart economic growth.” But they point out that it is more than just an opportunity, it is an imperative. Canada is competing with international companies in a race to supply the world with low-cost clean energy solutions and low-emissions natural resources. Through innovation and investment this can be a Canadian standard that we are all proud of. It is environmentally sensitive, socially responsible, and low cost – but in order to achieve this we must allocate capital and investments accordingly.  Investors are looking to greener shores and without an accelerated push, Canada will become less and less competitive on the world stage.