(Updated Version)
With the UK chairing meetings of the leaders of the G7 countries this week, and talk by the Prime Minister of a new ‘Marshall plan’ for tackling climate change, the momentum for action on the climate and some other international issues is hopefully shifting up a gear.
A time for change
Both the pandemic and the climate are certainly two urgent and systemic challenges facing every country; in the case of the latter, there is an existential risk to the planet. A key question is whether the necessary strategic systems exist to be able to marshal all of society in a concerted, unified effort in recognition of the scale and impact of the risks.
Part of the answer lies in the realization that the value of stewardship in the interest of a wider community of stakeholders has progressively supplanted a traditional more narrow focus on shareholder value and that we require more appropriate ways of distributing value for the benefit of the entire populations. This, in turn, focuses attention on the suitability and effectiveness of our traditional institutions like the G7 to measure up to the formidable tasks ahead. Is this an opportunity to look again at ways of achieving better multinational governance for systemic risks, albeit at a time when the notion of multilateralism is hardly popular?
There are some signs of a shift in the tectonic plates. The Covid-19 pandemic has given rise to the call that we (the UK) are not safe until all (the world) are safe through vaccination. Vaccine nationalism can only have a limited life. However, any hope of vaccinating the world’s 7.9bn population is unlikely to occur until the end of 2023, even with the most optimistic projection. As for the target of limiting global temperature rise to 2oC by 2050, it is acknowledged that limiting CO2 emissions cannot be fulfilled by net-zero targets for only some nations, especially when carbon offsetting distorts the overall (gross) target.
Whole of society
A whole-of-society, integrated approach is one that is increasingly being discussed by governments and governed alike. The business world is at the leading edge in many quarters. Large investment houses such as Blackrock are demanding clear policy statements on, and action plans for, carbon reductions to justify ongoing commercial support. [1] Some governments are also stepping up their game. [2] At the same time, economic recovery is also based on the scale of country-wide vaccination programmes as well as indicators of good governance and stewardship. Sustainability ultimately depends on the ‘triple bottom line’ of economic, environmental and social factors – also known informally as profit, planet and people. The balance between these elements is changing.
In a recent survey of 700 directors by the Institute of Directors (IoD), 62% of respondents believed that businesses should not exist solely to make money and generate shareholder profits, and almost half felt that companies should have a stated social purpose to help solve problems in society. As a result, there is a campaign to amend Section 172 of the UK’s Companies Act 2006 to make companies legally obligated to operate in a manner that benefits their stakeholders, including workers, customers, communities and the environment, while also seeking to deliver profits for shareholders. This reflects a growing view that if society is to become more resilient then it needs to adopt a more inclusive approach to integrating the constituent and contributory elements.
Revised institutions
However, if systemic challenges are to be addressed then we need to move out of first gear in global problem solving. While the plethora of platforms like G7, G20, OECD, WTO, WHO, The World Bank, UN, etc, all have a role to play, the ability to affect large-scale change appears limited and actions too ponderous. We need better platforms that can reduce the ‘flash to bang’ time. It we don’t reform our approach, we increasingly risk losing pre-emptive control and will resort to reactive measures as widespread disruptive events seriously affect living standards and supply chains as well as generate mass migration which will dwarf current problems.
The challenges cannot be resolved by big intergovernmental conferences, G7-type groupings or global multilaterals; the scale and scope of the risks are simply too immense. Rather, it is by collective and collaborative actions through fewer, more effective, extra-governmental bodies or global issues networks – permanent, discipline focused and outcome orientated – that could be devoted to solving specific problems with widespread endorsement.
The idea of networked governance was raised two decades ago but perhaps the time is ripe to re-examine the notion or variations thereof. [3] The powers of global issues networks – consisting of, for example, national governments, civil-society organisations and businesses, supported by independent expert panels and lead agencies – should not be legal but would aim to produce globally recognised strategies and standards, as well as monitor compliance, while having authority to call out wayward behaviour. They must be properly funded.
Better global governance and general stewardship are elements are at the heart of universal resilience which is needed to rescue global challenges – it’s about surviving and thriving together.
References:
1. Blackrock’s CEO, Larry Fink, letter to CEOs, 2021.
2. The UK Government has announcement that from September 2021 businesses wishing to bid for government contracts worth more than £5m will be required not only to commit to net zero by 2050 but also to publish clear and credible carbon reduction plans.
3. Rischard, J.F., High Noon: 20 Global Issues, 20 Years to Solve Them. The Perseus Press, 2002.
Note:
Resilience First and Resilience Shift plan to hold a webinar to coincide with Climate Week NYC in late September. It will be a debate around the proposition that ‘That this house believes that climate change demands better global governance’. The event will mark the formal launch of Resilience First’s whitepaper on ‘Decarbonisation and the role of technology’. Details to follow.
