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Economy

Towards 9 Billion: humanity is a shared endeavour

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Towards 9 Billion is a vision for a sustainable and equitable future based upon some simple yet radical changes to the purpose and processes of modern international capitalism.

The human population is set to grow to more than 9 billion people by 2050. What sort of world do we want them to arrive into? One of scarce resources and extreme competition for the basic elements of survival, or one in which they are able to build stable and meaningful lives for themselves and their children?

Rather than seeing a growing population as a fundamental threat, might we rather see it as a global opportunity of epic proportions?

We need new concepts of economic and social success

Our current economic models, with conceptual roots dating back centuries, were not designed to deal with the universal challenges presented by resource scarcity, population growth, globalisation and the decline of natural capital.

Current industrial processes are increasingly recognised as unfit for meeting the demands of the majority of the Earth’s current 7 billion people, let alone the expected rise in population numbers.

If we are to sustain and thrive together as species we need to imagine and deliver new ways of meeting our needs and desires.

A larger piece of a larger pie?

Today, even the world’s largest companies only supply goods and services to a proportion of the planet’s population. Increasing the total number of economically active people would be in the interests of businesses, citizens and society as a whole – driving greater inclusivity, cohesion, productivity, long-term value creation and providing an in-built incentive for social and market stability.

Perhaps the most significant challenge to achieving this future lies in the ability of the market to act in a strategic and co-ordinated manner and to value activities and behaviour which pay off over the long-term.

Towards 9 Billion: the vision

The vision is simple. To build, by 2050, a world of 9 billion capable citizens living in healthy, thriving ecosystems.

Such a world would represent a market for business unparalleled through human history. It would align the interests of individuals, societies and business organically, through “common-self-interest”.

Two key changes….

Delivering the vision for Towards 9 Billion requires two key changes in the function and intent of economics and markets.

1. A common intent

Markets lack common strategic intent beyond the generation of short-term profit. Adam Smith’s “invisible hand is a post hoc rationalisation of the sum of a multitude of individually motivated market actions, it is by no means a strategy.

This lack of shared strategy unsurprisingly makes the delivery of strategic outcomes difficult and the likelihood of systemic risk and unintended consequences more likely.

Towards 9 Billion is designed to address this issue by introducing a clear and economically meaningful purpose to market and business activity; the achievement of a vastly larger and more sustainable market.

Over the next 40 years to 2050, markets should seek to deliver:

– A global human population of 9 billion capable citizens

– Healthy and thriving ecosystems

2. Hack the price function: economic price should equal sustainable value

Economic behaviour flows principally from the price function, the ability to generate a price for a good or service which allows it to be bought, sold and traded.

At present, the price function fails to reflect, value and therefore sustain the fundamental ecological and social interdependencies that our way of life is built upon. It reduces the physical reality and mind boggling complexity of ecological systems to the simplistic binary metrics of supply and demand, profit and loss. This fails to adequately reflect or consider long-term human or ecological value and represents an existential threat to the continuation of our current model of capitalism.

Three principles for putting sustainable value at the heart of economic price

Subtle but radical changes in the generation of price would allow ecological and social sustainability to become a natural outcome of economic behaviour. Price should not simply be based upon supply and demand but also upon:

– Abundance rather than scarcity: scarce things are only of marginal utility in a world of 9 billion capable citizens – either natural (e.g. biologically based) or managed (e.g. through closed loop stewardship) abundance is inherently more valuable in this context

– Natural vitality: making use of the planet’s natural rejuvenative and productive abilities, learning from and utilising natural production techniques as the basis for our technological and industrial models

– Balancing interdependence: nothing happens in our modern world without the social and economic involvement of others. We need to recognise and balance these dependencies to maximise economic and human potential and remove imbalances and subsidies

Towards 9 billion: bridging price and value

Prioritising the vision for a world of 9 billion capable citizens would be a major step towards the integration of environmental and social value with economic opportunity and cost.

In addition, the motivation for businesses would move towards a positive sum (win-win) view. It would become an economic benefit to design industrial production activities around resources which are more likely to have longevity of supply and which enhance, work alongside, utilise or borrow from naturally productive processes and capacity.

In the social dimension, valuing and balancing interdependence would result in increasing global equity and help ensure a more even spread of economic development and increased quality of life.

Companies and markets would, as a natural aspect of market capitalism:

– consider the longevity and safety of supply of the resources they depend upon;

– act to value and enhance the quality and diversity of the natural capital upon which human life depends

– prioritise mutual equity in relationships with suppliers, customers and other stakeholders.

It makes overwhelming sense to connect the capability of our social, economic and industrial models to the viability of our home planet.

To paraphrase Arthur C. Clarke, “Over sufficiently large periods of time, private interest should be indistinguishable from the common interest”.

It is time we worked to welcome 9 billion.

Joss Tantram is a founding partner at Terrafiniti LLP, a pioneering sustainability and systems consultancy. Terrafiniti’s Towards 9 Billion thought leadership and research and development initiative develops big, playful and hopeful ideas for a sustainable future.

Further reading: 

Creating a financial enlightenment

Are capitalism and conservation incompatible?

Pick-and-mix dogma is unethical and intellectually dishonest

Witnessing financial capitalism’s failure

Capitalism’s woes will not be solved by 16th or 19th century economic theories

Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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