Our founder’s take on Johnson’s 10-point green plan
We’ve heard some very bold announcements from an apparently rejuvenated Boris Johnson this week. These are welcome, and encouraging, but we need to remember that a vision without action is merely a daydream.
The need to move into a circular economy is not in doubt. Boris has grasped that and there are some stunningly brave and disruptive elements to yesterday’s announcement. But I fear that the government’s approach to circularity has not got off to the best start. Recycling the same money that has already been announced (a couple of times by now) implies this government has not quite understood what is needed.
Now, £12bn is undeniably ‘a chunk of change’ in anyone’s book and indeed £3bn of that is ‘new money’ over and above what has already been trailed. But when putting this into context, the UN estimated that to meet its Sustainable Development Goals will cost between £5 – £7tn annually. Thinking about it like this, the UK’s £12bn commitment looks somewhat underwhelming – especially when compared to the €30bn and €40bn already committed by France and Germany respectively. Even when adding these three figures together, we are still just over 1% of what the world needs, every year. This is simply not enough. It’s a bit like pouring half a bottle of rum into several gallons of lemonade and calling it ‘punch’. We are not going to get the party started like that and it’s certainly not going to keep it going.
The money for this can easily be found. Launching a range of green bonds, with a higher coupon than gilts, would have money pouring into investments that must re-pay the Chancellor many times over. Plus, who cares? We don’t have a ‘plan B’ any more than we have a planet B – so best get on with it regardless of the economic outcome. And a first-mover advantage would be helpful and inspiring for the country.
So come on Boris – destiny awaits you as one of the men who facilitated the saving of the planet. Imagine the positivity, optimism and economic resurgence that can be fuelled (pun intended) as the public sees infrastructure and investment truly making a difference. We definitely need less ‘sizzle’ and more ‘sausage’ (preferably vegan).
So, while we welcome this announcement as a way of getting sustainability on the agenda, it is significantly light on detail in terms of call-to-actions and timeframe. At Path Financial, however, we have seen how doing the simple action of transferring your savings and pensions from traditional funds to ESG funds that make a positive difference, can have a bigger impact than all other lifestyle changes combined – including that electric car you’re now eying up. So, before we clap our hands and say ‘job done’, let’s consider the difference we can make individually today because – take it from me – the job is nowhere near done.