Newsletter | Turning Commitment into Action

Newsletter from the Council for Inclusive Capitalism

Why the world must set a price on Carbon

Council for Inclusive Capitalism founder and CEO, Lynn Forester de Rothschild writes that a global price on carbon will be a key tool for ensuring a just transition in a new piece for TIME.

Read the piece here: https://time.com/6549163/why-world-needs-a-carbon-price/

Turning Commitment into action

As we navigate the complex landscape of climate change, the recently concluded COP28 left me with a profound sense of both gravity and determination. The proceedings saw unprecedented collaboration, with nations and businesses uniting to explore innovative solutions to our shared environmental challenges and commit to tangible actions. The groundbreaking commitment to transition away from fossil fuels in a “just, orderly, and equitable manner” is pivotal, and core to the Council for Inclusive Capitalism’s engagement at COP since the launch of our Just Transition Framework for Company Action at COP26 in Glasgow two-years ago.

Commitments have been made, now they must turn to action. To leverage the power of markets for a just transition, we must also heed the immortal words of legendary investor Charlie Munger, “Show me the incentive, and I’ll show you the outcome.” That is why I wrote an op-ed for TIME, based on my experiences at COP28, on the potential for a price on carbon to supercharge our march toward net-zero.

At COP28, the Council for Inclusive Capitalism convened conversations around just transition and climate financing to drive action with market tools. With our partner Sustainable Markets Initiative, the Council’s roundtable on carbon pricing convened leaders to discuss how a price on carbon could simultaneously drive down emissions and create investable funds for the green energy transition. Council members EY, Ayala Corporation, and the Rockefeller Foundation are leading the way with announcements they shared at COP28 of action they are taking to scale carbon markets.

Also at COP28, we continued our drive toward greater company and investor action on just transition, with a discussion in partnership with the World Business Council for Sustainable Development (WBCSD) and Boston Consulting Group on business leadership on just transition and what is required for enabling policy and financing conditions. With our partners the World Benchmarking Alliance, we supported a discussion on just transition plans and how public and private financing solutions are being deployed in Europe for transition projects with workers at the center. The Council also held a panel discussion with the Anglican Communion, the Republic of the Seychelles, and the Rockefeller Foundation on ways to overcome barriers to a just transition across emerging markets.

I walked away from COP inspired by the work of our Council members taking action to drive a just transition, but also with a sense of urgency that the world continues to underestimate the cost of inaction— a cost which will only increase the longer we wait.

By transcending traditional policy constraints through business action and market incentives, I believe we have the power to not only reduce emissions, but also ensure a just transition which listens to “the cry of the earth and the cry of the poor,” as Pope Francis wrote in his encyclical, Laudato si’. Like those words, witnessing our members’ energy and ingenuity gives me hope for an economy which is more inclusive and sustainable. As we move forward, let’s channel the momentum generated during COP28 into actionable steps within our communities.

As we turn to 2024, I look forward to continuing these discussions together, and wish you Happy Holidays and our very best for the New Year.

Lynn Forester de Rothschild
Founder and CEO

12 COUNCIL MEMBERS TAKE YOU BACKSTAGE IN STEPS FORWARD MAGAZINE 2023

From banking apps to beehives and from city hall to the factory floor, businesses are operating in ways that make a difference to people and the planet.

Salesforce is re-orienting the company around a nature-positive strategy. Repsol is looking ahead with a renewed just energy transition strategy. And, Movii is building digital finance tools to bring unserved consumers into the market. Download a copy of our third annual magazine, or explore highlighted stories, below.

Download the magazine here.

	Providing Cleaner Energy and Empowering People Reducing emissions breeds “efficiency, sustainability, and competitivity,” says Repsol CEO Josu Jon Imaz. He shares how worker development and emerging technologies play pivotal roles in the company’s green energy transition. Read the story »
	Ex-Offenders Offer a New Source of Talent By the end of the decade, millions of unfilled jobs may cost the global economy $8.5 trillion in unrealized revenue. Yet, valuable workers with prior convictions are often barred from work. PayPal and Nehemiah Manufacturing demonstrate second-chance hiring as a policy for prosperous communities. Read the story »
	Finding an Affordable Home is Serious Business A low-inventory, high-cost housing market blocks millions of Americans from homeownership and the financial and wellbeing benefits it brings. Meet two CEOs buliding more equitable housing through innovations in climate-resilient design and locally pre-fabricated homes. Read the story »

Watch: Achieving Gender Parity at the Leadership Level and in the Boardroom

Organizations of all sizes and industries are seeking diverse candidates for leadership roles, yet many struggle to find the right people. Competent Boards, Him for Her, and European Women on Boards joined the Council for a webinar on proven strategies for meeting, recruiting, and retaining women leaders. Watch the recorded session to learn about building a boardroom culture that enables active contributions from women and how to take full advantage of diverse viewpoints.

👋 WELCOME NEW COUNCIL MEMBERS

See all Council Members

📰 INCLUSIVE CAPITALISM IN THE NEWS

BBC | How Salesforce reached its net zero goals

Forbes | Largest U.S. pension fund, CalPERS, to invest $100 billion In climate solutions by 2030

PhilStar Global | Ayala named Asia’s most sustainable company

EY | Carmine Di Sibio: EY awarded Sustainable Markets Initiative’s 2023 Terra Carta Seal for leading the charge to create a climate and nature-positive future

Deloitte | Deloitte and IBM collaborate to help organizations accelerate sustainability outcomes

Visa | Visa accelerates support for small and micro businesses across APEC and globally

Bloomberg Law | BCG inks major deal with startup to remove carbon from the air

The Brazilian Report | Vale opens the world’s first green briquette factory

The Washington Post | Ford Foundation partners with other philanthropists to fund “Origin”

Insurance ERM | Aviva named Sustinable Insurer of the Year

Newsweek | Council members Merck, PayPal, The Estée Lauder Companies, IBM, Motorola Solutions, State Street, M&T Bank, Mastercard, Visa, Bank of America, Verizon Communications, Salesforce, AIG, and AT&T named Newsweek’s Most Responsible Companies 2024

Wall Street Journal | Council members IBM, Merck, Johnson & Johnson, Visa, Mastercard, Salesforce, PayPal, The Estée Lauder Companies, Verizon Communications, Bank of America, DuPont, AT&T, and Motorola Solutions named in the Wall Street Journal’s 250 Best-Managed Companies

📖 DEEPER READING: EXPLORE ISSUES WITHIN INCLUSIVE CAPITALISM

Joseph Stiglitz on How to Price Climate Change
Author: Sherry Mingqiu Yu, Columbia University School of International and Public Affairs
In a recent interview, Nobel Prize-winning economist Joseph Stiglitz shares his insights on carbon pricing as a strategic approach to addressing environmental issues. Known for his practical thinking in dealing with societal externalities and information asymmetry, which earned him the Nobel Prize in 2001, Stiglitz’s discussion with John C. Williams, President of the New York Federal Reserve, offers a clear explanation of how carbon pricing can mobilize capital markets and stimulate investments in clean energy.  The topic was also central to a roundtable at COP28 in Dubai, moderated by Council CEO Lynn Forester de Rothschild, where public, private, and civic sector leaders delved into the potential design, development, and implementation of a carbon price. This mechanism aims to foster investment in innovation, which, as Stiglitz emphasizes, is not a spontaneous occurrence but rather a product of deliberate efforts and clear goal-setting.

Code Red: Responsible Corporate Engagement in Emerging Markets
Author: the Emerging Markets Transition Investment (EMTI) project  
COP focused global attention on the challenges emerging economies face due to climate change, including extreme weather and drought. In this context, it is worth revisiting the March IMF paper proposing how institutional investors and corporations can encourage sustainable business practices in emerging markets, even at the grassroots level. The paper is based on a roundtable at the IMF Annual Meeting, which underscored the necessity for green investments in emerging economies and proposed models for corporate engagement, public partnership, and financial incentives tailored to local needs.  Echoing the sentiment of Prime Minister of Barbados Mia Mottley, when she addressed the issue of loss and damage for emerging markets and developing economies at COP27, the paper underscores that not only do “We have the power of choice. We must choose to act.”

AI Can Reset Capitalism 
Author: Lynn Forester de Rothschild, founder and CEO of the Council for Inclusive Capitalism 
As world and technology leaders gathered for UK Prime Minister Rishi Sunak’s AI Summit in the United Kingdom last month, Council CEO Lynn Forester de Rothschild emphasized the dual nature of generative AI—its potential benefits and risks. In this piece, she highlighted how AI can lead to a more Inclusive Capitalism with proper partnership between government and business in pursuit of their common good with the public. As printed in the Financial Times and discussed in a CNBC interview, Lynn argued that generative AI offers an opportunity to address and correct structural flaws in our economic system. By doing so, we may still hope to redevelop a more inclusive form of capitalism which avoids deepening existing inequalities and social divisions.

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