The Aggregate Confusion Project at MIT has done a great job of analysing why there is a tremendous divergence between different sources of impact data (sustainability data). They conclude that the biggest contributing factor is that different people fundamentally measure impact in different ways. Furthermore, people organise the various attributes according to different scopes, and assign different weights to each attribute. These three categories of measurement, scope, and weights provide a good starting point for fixing the problem.Read More »
Three long-term economic trends all point towards zero: 1- official interest rates (5,000 years); 2- dividends from stock markets as a proportion of total returns (70 years); and 3- economic growth rates (2,000 years). What are the potential consequences for our economic model if these mega-trends are correct and if they persist – what next?
I wrote this text in 2018 as a thought experiment. It was never published at the time because I was not sure how such a heretical narrative might be beneficial… but now, as the COVID-19 pandemic triggers a global financial calamity, I hope people find it useful as they navigate the crisis and contemplate the systemic changes that may be necessary.Read More »
To find the answer, we need to go back to the origin of the word “data”. ‘Etymology can give a startling new perspective on many of the phrases we frequently toss around in business’, says Gillian Tett in her FT column Language matters: the real meaning of Big Data. The word “data” comes from the Latin verb “to give”, and could therefore be translated to mean “a gift”. If the original meaning of words is important, then we should be careful how we use them or risk distorting the effects they have, without even realising it.Read More »
Money, finance and capital markets are social constructs that have ostensibly evolved for societal purpose. Yet paradoxically finance and enterprises that intentionally target social returns need to be prefixed with the word ‘social’ (sometimes ‘impact’, sometimes ‘social impact’) to make it clear that they have an explicit social purpose. Measuring social impact, and by extension environmental impact, is an attempt at quantifying the societal relevance of all this activity – and shining a light on what might be otherwise described by economists as positive or negative externalities. But measuring social impact directly is arguably one of the most difficult ways of universally assessing social usefulness. This is because not everything that is important can be easily measured, and not everything that can be measured can be easily compared with other important things because they often often get measured in different ways.
Discussing the opportunities and challenges of bringing together finance and social investment. Social investment is still a small market segment but has tremendous potential. There are more investors who are looking for projects that can deliver both social impact and financial returns, while organisations that historically relied on grants look for alternative sources of funding without losing sight of their social purpose.
The extent of debate (and often disagreement) about the definition of social impact investment is fascinating – exploring in great depth the nuances and prerequisite principles for investing in a way that seeks both positive social outcomes and financial returns. But this discourse risks being divisive and self-defeating. Does this complexity actually attract or repel new investors from engaging in this exciting market?
The Commission on Banking Standards is appointed by both Houses of Parliament to consider and report on:
- professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the LIBOR rate-setting process
- lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for Government policy and to make recommendations for legislative and other action
A copy of my evidence submission 8 February 2013 is published below, read the invitation from the Commission to submit here.
A committed fiscal conservative like UK Chancellor George Osborne was never going to deviate from Government’s hard-wired policy of austerity. Nobody really expected a change of course in his 2013 Budget, not even after his recent humiliation by Moody’s downgrade of Britain’s triple A credit rating – a humiliation not because of the fundamental impact of the downgrade, which was negligible, but because Osborne himself had placed such high importance on retaining the AAA status.