Ethical finance is one of the drivers of positive change, with current geopolitical events in the Ukraine there is now a need to respond to the rapidly moving energy supply shortages which are fast initiating an ‘economic war’.
This webinar, held on 16 March 2022, in partnership with the Global Ethical Finance Initiative (GEFI) and organised by the CFA UK Scottish Committee. The discussion explored the economic, geopolitical and investing ramifications of war. The panel highlighted the ethical case for action, the forms of action available to finance, the challenges of acting at the pace and scale required and the role of finance in the longer-term process of conflict resolution after active hostilities end.
Moderated by Lord Alderdice, Director of the Centre for the Resolution of Intractable Jeremy Lawson, Chief Economist at , Helen Thomas, CFA, CEO of Blonde Monday and Graham Cook, CFA, Chief Investment Officer of the Environment Agency Pension Fund, they discussed these compelling questions:
Could the current events in the Ukraine see the return of stagflation for the first time since the 1970s?
What impact will this have on ordinary consumers and energy policy?
Relating to finance, what has been the response of government and how are firms scrambling to deal with the pace of these changes?
Do investors have a moral responsibility to go further than what has been implemented so far by governments, and what can they do?
Jeremy Lawson explained that the conflict highlighted the position of central banks, and that they are behind the policy curve which means they have few policy levers left to respond to the conflict and the resultant energy supply shock.
Helen Thomas, CFA explored the policy response to the conflict in Ukraine, explaining that two wars are happening in tandem: a land war, and an economic war that goes beyond sanctions. Finance has become another front in this situation, and investors are struggling to remain neutral as a result.
Whilst there might be pressure to divest, Graham Cook, CFA commented, the market isn’t necessarily there. In fact, for many investors, their Russia-based holdings had been relatively low due to existing governance concerns – many of those with robust sustainability and governance policies were not deeply invested in Russia.
Both Helen Thomas and Jeremy Lawson were keen to point to political economy as a fundamental driver of investing, with formal modelling a crucial potential aid to decision-making. There was broad agreement that China is key, not just in terms of the effectiveness of the economic war now being waged against Russia, but on climate change action and the shape of any future geopolitical order.
Find out more about ways you can help on a humanitarian front and support the people of Ukraine.