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In ‘Through the Looking-Glass ‘(5), Alice has a conversation during the Red Queen’s race in which the Red Queen explains to Alice in her garden that: “…it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that! “(6). It is said (7) that with its search for markets and profits, capitalism requires us to run to stand still i.e. it is the Red Queen’s garden, and if we do not constantly change and innovate its mode of production, our industry and commerce, capitalism will outpace itself. Therefore, capitalism must strive to adapt and evolve to be an enabler of new opportunities that lead to further wealth accumulation. Failure to do this reduces output and productivity, resulting in leverage and the well-known risks that that can entail.
capitalism must strive to adapt and evolve to be an enabler of new opportunities
the UK government wishes it to guide innovation of the City of London post-Brexit and for it to become a world leader of green investment
The above conundrum of the insurance industry is not unique and all business must be sensitive to the impacts of climate change and global policy shifts around it. That is why a number of ESG initiatives try to focus minds. The NZIF and the TCFD reporting (referred to in my earlier article and backed by the UK government) are expressly driven to give us the ability to determine which companies are ready for a future (realised or not) that is carbon neutral. They are premised on an understanding that divestment in long-used asset classes is a certainty, and we should be given the ability to react to this now, through transparent financial disclosures by companies on what they are doing to future proof themselves. It should then follow that investors are better equipped to determine the green innovators and safe haven assets of the future, and accordingly apply divestment pressure on those slow to act.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/966131/UKIB_Policy_Design.pdf & https://www.climatebonds.net/2021/03/uk-announces-debut-sovereign-green-bonds-ignite-britains-market
Panitch L. (1994) ‘Globalisation and the State’ in R. Miliband and L Panitch (eds) The Socialist Register 1994 (London: Merlin Press) pp. 60-93 and Ryner M and Cafruny A (2017) ‘The European Union and Global Capitalism: Origins, Development, Crisis’ (Palgrave), pp. 31-39.
Carroll, Lewis, ‘Through the Looking-Glass and What Alice Found There’ (1871).
Ibid. Chapter 2.
See footnote 4.