Ethical Investment in a neo liberal economy

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Ethical Investment in a neo- liberal economy

• Friends of the Earth
• (England, Wales and Northern Ireland)

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Can ethical investment deliver sustainable
development?

• No.
• Not within the EU neo liberal economic framework
  as outlined in the EU Financial Market Action
  Plan
• Why?
• Exists primarily as a niche market for green
  consumers
• EU financial framework doesnt recognise SEE
  impacts on business and wider environment
• Insufficient penalties for damaging environment
• Requires proactive policies to promote and
  develop ethical industries like recycling and
  renewables

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Is ethical investment a threat to sustainable
development?

• Yes, it could be.
• Why?
• promotes myth of ethical consumers as significant
  influence on markets
• encourages use of voluntary action such as
  Corporate Social Responsibility (CSR)
• Doesnt fundamentally challenge inequities in the
  neo liberal economy but sits within it

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What can the EU do to encourage ethical based
investment

• Integrate social, ethical environmental (SEE)
  issues into the way business operates
• How
• Develop EU financial action plan based on
• acknowledgement of environmental limits
• fair share of resources
• social justice and equality
• right of citizens to determine what sort of
  development is allowed in their community

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What can the EU do to encourage ethical based
investment

• Integrate social, ethical environmental (SEE)
  issues into the way business operates
• More
• Reform company law to make directors accountable
  for SEE impacts (ie. Company Directives)
• Reform stock market listing rules to include
  disclosure of SEE risks to encourage long term
  focus within City (ie. Prospectus and
  Transparency Directives)
• SEE reporting standards (ie. Reporting
  regulations)

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What can the EU do

• Create a liability regime for companies who
  damage the environment
• How
• Develop an environmental liability directive
  based on the polluter pays principle, strict
  liability, no exemptions, compulsory insurance
  and third party access to justice
• (ie. Reform proposed Environmental Liability
  Directive)

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What can the EU do

• Reform tax system to encourage green and social
  responsible businesses
• How
• Implement taxes on environmental or social bads
• - tax on farm chemicals (eg. pesticides) to
  reduce use,
• - climate change levy to Kyoto commitments,
• - tax on aviation fuel to reduce greenhouse
  emissions.

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What can the EU do

• Reform tax system to encourage green and social
  responsible businesses
• How
• Give tax breaks or subsidies for green and
  socially responsible business
• - reform CAP to uncouple subsidies from
  production volumes in favour of sustainable
  farming practices,
• - remove VAT on social housing and eco homes,
  
• - VAT reduction on energy saving products,
• - tax break for use of recycled or reused
  material

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What can the EU do

• Develop EU wide policies to encourage business
  to embrace sustainability and social justice
• How
• Use Government itself to influence business by
  implementing ethical purchasing policy for all
  Government departments, agencies etc
• Directly encourage business by proactively
  developing policies that promote growth of
  sustainable industries such as renewables and
  recycling (including setting of targets for
  market share)
• Support Fair Trade rules

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Challenge to future of EU

• Are we citizens or are we consumers ?
• Past
• EU began as trading block
• Evolved into loose political federation
• Possible Futures
• EU is a single financial market based on neo
  liberalism
• EU as a democratically accountable political
  entity based on environmental justice and respect
  for human rights

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Want to know more

• www.foe.co.uk
• (see publications and briefings under Policy and
  Research Unit, Global Trade and Corporates)
• www.foeeurope.org
• (see briefing on Towards a Green EU
  constitution)

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