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May 2024
AAM Magazine
May 2024
Back to September 2023

Financial community steps up

  • Asia
  • Global
  • USA

An article appeared in The Nation on August 22 headlined: “We Are Witnessing the First Stages of Civilisation’s Collapse”. The thesis, based on the 2005 book Collapse: How Societies Choose to Fail or Succeed by geographer Jared Diamond, is that global civilisation is teetering on the brink of a collapse in the fashion of the Maya civilisations of Central America which left that region dotted with vast, sophisticated, abandoned cities. That and similar civilisations, the book argues, faced existential challenges because of major climate changes, and their elites elected to continue doing things the same old way, despite the disastrous consequences, with the predictable results. 

This year, signs of such potential catastrophe aren’t hard to find. In Canada, for instance, as of August, over 1,000 wildfires are burning, according to the Canadian Interagency Forest Fire Centre (CIFFC), two thirds of them categorised as “out of control”. They have already burned a total land area larger than England or New York State. Greece’s wildfires, meanwhile, have already caused 35 deaths, with more likely to come. And according to the US environmental organisation the Sierra Club, 99% of the US west of the Rockies is already in persistent extreme drought – as typified by California’s wildfires.

Potentially hopeful signs that there may be enough will to pull back from the brink include the new sustainability reporting regulations from the International Sustainability Standards Board and their endorsement by the International Organisation of Securities Commissions. If the entire financial system, and all companies that take part in it through listings, is ready to incorporate sustainability metrics into its operations, that’s strong momentum in favour of sustainability. Plus, to some degree, such actions by bodies such as the ISSB and IOSCO do typify the attitudes and actions of global policy and the financial elite. If they recognise the problem and are attempting at least to act accordingly, perhaps there is hope. 

Whether or not we stand at risk from civilisational collapse, though, it’s clear that there’s one constituency that stands in bad need of auditing: the politicians. The short-termism and lack of leadership shown by elected and unelected politicians alike recently in response to events such as record high summer temperatures, wildfires and extreme flooding, has been nothing short of staggering, and their readiness to indulge popular ignorance and scepticism for political gain has been scandalous. This is no longer a search for signs of climate change, but rather a search for accountability for those responsible. The business and financial communities have stepped up and got behind auditing and regulation, no matter how partial and imperfect. It should be quite possible to turn those same tools onto politicians’ promises and favourite policies; because it looks like the world needs nothing less.