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This chapter explains that a central feature of private equity governance mechanisms is a system designed to improve decision-making. Through an explanation of the typical structures seen in practice, it considers the main ways in which better decision-making is facilitated. These structures – most importantly, the board of directors of the company – differ according to the size, type and stage of development of the company, as well as the skills and expertise of the relevant stakeholders. This chapter also looks at the ways in which private equity firms seek to protect their own interests, as distinct from those of the underlying company. That question is examined from a number of perspectives, including the need for a private equity investor to sell the company within a defined time frame, and its need to protect its own reputation with a wide variety of stakeholders. Building on this analysis, and connecting in particular with the various objectives of private equity firms, this chapter considers how, if at all, private equity firms design governance mechanisms with a view to protecting external stakeholders.
Activists have long used the market as a tool for empowering specific populations, sustaining the environment, and shifting cultural values. Today, these practices are commonly referred to as “ethical purchasing,” “political consumerism,” and “voting with your dollar.” The fair trade movement emerged in the 1940s as a way for consumers in the Global North to support populations in the Global South vulnerable to marginalization, exploitation, or oppression. Since then, the movement has grown in size, expanded in scope, and diversified in many ways. Today, it intersects with the organic movement, climate change advocacy, and other aspects of environmentalism. This chapter reviews the burgeoning fair trade literature, drawing heavily on publications from the past five years, to describe and discuss four provocative debates: 1) Fair trade for whom? 2) Fair trade by whom? 3) Fair trade through certification (or not)? and 4) What next for engaging capitalism and the state? After highlighting the perspectives and questions dominating each debate, this chapter offers several suggestions about the future of fair trade.
The promise of an economy that creates good jobs, promotes social justice, and improves environmental quality is an alluring one. Proponents of a green economy argue that businesses and communities can overcome contradictions and conflicts between economic, social, and environmental goals through pursuit of the triple bottom line. Yet there is little consensus on what the green economy is and how to achieve it. In this chapter, we review the empirical studies on existing green economic arrangements in different parts of the world. We identify four streams of activities: macroeconomic restructuring, spatial replanning, industrial redesign, and local revitalization. Our review suggests that existing empirical studies remain overwhelmingly practical in their orientation, which leaves much room for theoretically motivated environmental sociological analyses. We conclude with a call for an environmental sociology of green economies that has the potential to enrich the academic literature and enable real-world transformations.
The concept of a post-capitalist world implies a world after capitalism, but does not suggest a structure for economic negotiations. Rather than waiting for the fall of capitalism, community economies, as theorized by J.K. Gibson-Graham, suggests that economic exchange encompasses a wide array of activities, places, and engagements, and identifies capitalism as only one of many forms of economy. Following that logic, this chapter is based on a particular understanding of post-capitalism as a series of strategies for socio-economic-ecological negotiations. These strategies engage a politics of language, the subject, and collective action. I consider the question: what does sustainability look like in a post-capitalist world? In answer, I consider how these post-capitalist strategies can enhance the concept of emplaced sustainability. The emplacement framework fosters the concept of emplaced sustainability by relating existing case studies to each other in novel ways. This seemingly simple act furthers a politics of language, which supports the remaking of subjects through interdisciplinary scholarship and can also be extended to collective actions and transdiciplinary engagement.
Unsustainable behaviour is often blamed on the ‘culture’ of organisations, businesses or households. In this chapter I unpick what culture means in the context of sustainability, and in particular how it can underpin resistance to change or alternatively can be a dynamic and creative force for more sustainable outcomes. The concept of ‘sustainability cultures’ outlined in this chapter offers a structured way of thinking about and investigating culture. It has been applied in a wide variety of situations to help explore cultural attributes that shape outcomes such as energy use and mobility choices by households, businesses and organisations. The chapter also discusses and exemplifies how cultures are both shaped and constrained by exogenous factors which may constrain or facilitate cultural change. This kind of analysis can assist in identifying policy interventions which can remove barriers or support latent potential for cultural change. Seen in sustainability terms, culture is not a bystander, but a core driver of outcomes that are critical to long-term human survival.
The goal of this study is to perform a comparative analysis of agroecological and conventional small coffee farms. We investigated 15 coffee farms in the East region of Minas Gerais, a Brazilian rural region, based on coffee production using a multicriteria analysis with economic, social and environmental factors. The results suggest that agroecological farms perform better than conventional farms in terms of sustainability, reduce labor intensity and improve income stability and the environmental impact, such as agro-biodiversity and forest cover. In particular, the results reveal that agroecological farms, though they have lower levels of coffee productivity than conventional farms, perform better in terms of income stabilization. This result depends on product diversification (such as agri-food products, vegetables or fruits) for local markets, which reduces farmer risks associated with coffee price volatility, improving both the local economy and local food security. Moreover, agroecological farms rely more on labor than capital. Overall, the results of this study reveal that agroecological systems support the socio-economic sustainability of the rural areas under study and suggest the potential of agroecology to boost sustainable development in the East Region of Minas Gerais. In short, the spread of agroecological systems could improve local employment conditions, reducing migration toward large cities and shanty towns in other parts of Brazil. Hence, agroecology systems can represent the main alternative to conventional production systems to improve the well-being and wealth of rural populations in developing countries. The analysis presented in this study is based on a specific case study, but the rural area under study has many similarities with other areas in Latin America regarding all aspects of economic, social and environmental sustainability. Finally, some agricultural policy implications are discussed.
Resource depletion and sustainable resource extraction is the main focus of this chapter. Depletion is an accentuated scarcity, which can be measured in different ways, four of which are presented in turn: (a) The trends in the adequacy of reserves from which the resource can be extracted provide an important physical insight into the seriousness of the depletion threat. (b) The progress of real prices is seen by economists to reflect accentuating or subsiding scarcity. (c) The long-run change in the unit price in real terms of identified but unexploited resources still in the ground is an alternative measure of the extent of the depletion threat. (d) Finally, the development of the long-run marginal cost of supply, equivalent to the total average cost in the marginal project, is yet another economic indicator of scarcity. Since depletion is a slow, drawn-out process, long time series are needed to make measurement meaningful. The chapter documents and discusses the available data on each of the measures in turn. The chapter ends with a discussion of sustainability in relation to the acceptance by society of extraction of nonrenewable resources.
It is increasingly acknowledged that 21st-century archaeology faces serious challenges from a variety of directions, ranging from the theoretical to the practical. Above all, the discipline’s entanglement with capitalism, capitalist ideologies and capitalist institutions is simply unsustainable. The concept of degrowth involves a reconceptualization of archaeology’s possible future(s) in terms of a withdrawal from capitalism and an emphasis on collective and caring praxis looking towards both a sustainable future and the possibilities of the immediate present. A degrowth approach to archaeology can provide a useful supplement to existing critiques and proposed alternatives to current practices. Degrowth proposals such as reorienting economic behaviours towards cooperative, convivial and dépense (communal use of surplus) activities while freeing people to pursue work they find meaningful have potential applications in archaeological practice that address some of the problems currently facing the discipline.
In the past decades, governments significantly expanded their ‘insurance’ role in the economy. The ‘all-insurance’ state today is expected to cover almost all risks and contingencies from social security, via protecting certain industries or the financial sector to supporting demand and mitigating international crises. Social expenditure reflects the most important ‘insurance role’ of government. Social expenditure has been on a continuous upward trend for decades and absorbed 24% of GDP on average in 2016. Projections for the coming decades point to further moderate increases in an optimistic scenario and very adverse dynamics with spending growing to well above 30% of GDP in pessimistic ones. Large additional social expenditure increases would be hard to finance and would crowd out other, productive spending. Such a world of ‘social dominance’ would not be stable and sustainable. Fortunately, we have all the policy levers to prevent it.
Chapter 2 derives the comprehensive balances sheet (or intertemporal budget constraint of the central bank and the Treasury (or general government) and of the consolidated State and contrasts these with the conventional balance sheets. We then consider, theoretically and quantitatively, the arithmetic of fiscal sustainability by focusing on the net non-monetary debt of the consolidated general government and central bank and the seigniorage-augmented primary surplus of the State. The fact that Japan’s general government gross debt was 237.6 percent of GDP at the end of 2017 while the net nonmonetary debt of the consolidated State was only 67.4 percent of GDP underlines the importance of our approach. Japan does not yet have a serious debt stock problem. It has a bit of a flow deficit problem: its general government cyclically adjusted primary budget deficit was 3.8 percent of GDP in 2017. But because it is at the ELB and has been for years, it can extract massive seigniorage – more than 10 percent of GDP each year in the five years leading up to 2017. That suggests that, if Japan ever were to escape the ELB, it could have both a stock and a flow monetary overhang problem.
This chapter concludes by considering the four main themes of the book: 1) How public spending has evolved over time, initially focussing on sound rules of the game and essential public goods and services before shifting more and more to welfare spending while debt grew to record levels. 2) The huge differences in government performance and efficiency, the reinvigorating role of expenditure reforms and the pragmatic ‘optimal’ size of government, that does not require public spending of more than 30–35%, perhaps 40% of GDP. 3) The main fiscal risks in the social and financial sphere from an ever-growing ‘insurance role’ of the state, which has contributed to rising debt and could put stability and sustainability at risk. 4) The case for strong rules and institutions to contain public spending, debt and fiscal–financial vulnerabilities. If governments focus on their core tasks and do them well, they underpin a well-functioning market economy with prosperity, freedom, opportunity and trust. This is the message of the social market economy model and it holds for the challenges related to the Coronavirus crisis which had broken out when this book went into publication. Not heeding this message in the past has contributed to governments being over-burdened and over-indebted today. We will all benefit from a lean, efficient and sustainable state.
Interpretations of fiduciary duty have recently undergone rapid evolution. It is now widely accepted that investors need to take account of ESG or sustainability issues in their investment practices. This chapter analyses the changes in the interpretation of fiduciary duty and the implications for investment practice. It discusses of the traditional definition of fiduciary duty (in particular, the duties of loyalty and care). It then identifies 4 factors – the work of the UNEP and the Principles for Responsible Investment (PRI), the changing legal and policy landscape for responsible investment, the understanding of the financial significance of ESG issues to investment performance, and changes in investment practice – that have challenged and led to change in this traditional definition of fiduciary duty. The chapter then proposes a modern definition of fiduciary duty, a definition where ESG issues are at the heart of the duties owed by investors to their beneficiaries. The chapter concludes with some reflections on whether this modern definition of fiduciary duty is a sufficient response to the social and environmental challenges faced by society today.
Sets out what central banks can and must contribute to the sustainability agenda, especially on climate change, given their existing mandates and objectives. That includes monetary policy, financial stability, prudential regulation, balance sheet-management and even bank notes. Central banks do not need and should not wait for changes to their legal duties, because climate change is a material influence on all their existing responsibilities. Meanwhile, macroeconomic stability is a pre-requisite for the wider sustainability agenda and so there needs to be a continuing priority focus on monetary and financial stability.
Financial sector developments pose the second important fiscal risk for the coming years and decades and this is the first of two chapters mapping and analysing such fiscal–financial risks. Rising financing costs affect debt service expenditure, especially for countries with high debt and short-term financing. Asset price movements can constitute further major fiscal risks in a downturn. Adverse financial sector developments and negative confidence effects also burden public expenditure and finances via the real economy, and guarantees that fall due in ‘bad’ times can exacerbate this effect. Debt has ratcheted up over consecutive economic and financial cycles over the past forty years, an effect particularly strong during the global financial crisis due to fiscal–financial linkages. Simulations show that the situation of several advanced countries is critical, given their lack of fiscal buffers for another crisis.
The industry of Sustainable and Responsible Investments funds started booming after the financial crisis. The loss of faith in conventional finance made people look for 'other' values for their savings. A need for enhanced transparency popped up and suddenly most players in the financial system offered such products. Or did they? It became difficult not to get lost in an alphabet soup of 'sustainability' related acronyms, and it became more difficult not to get confused and make a valid choice. After different players and even government actors started launching such labels, comparability issues cropped up, adding a further layer of complexity for retail investors. French, Luxembourgish, German, Austrian labels came to the fore with no European framework to facilitate the comparison, except for a methodology based on transparency standards developed by the European Forum for Responsible Investment - Eurosif. The lack of generally accepted definitions for these sustainable funds did not help resolve the fragmentation of standards which abounded in the industry. European Institutions stepped in to facilitate sustainable finance and put some solutions on the table.
The UN Sustainable Development Goals to 2030 call for action by the globe to tackle some of the most pressing problems facing humanity. There is a key role for business in helping to meet the goals, and in particular, small- to medium-sized enterprises (SMEs), which account for over 90% of global businesses. Many organisations that were already engaged in addressing sustainability prior to the release of the SDGs will need to shift their approach to accommodate the new framework, including SMEs like Sydney Theatre Company (STC). This paper explores the use of the SDG Compass as a tool for making that shift by revisiting a previous case study on STC's sustainability journey since 2008 to assess the efficacy of the SDG Compass as a guide to addressing the SDGs. It finds that the SDG Compass is prohibitively complex for SMEs which could impede engagement with the SDGs by SMEs.
The success of sustainable Theobroma cacao (cocoa) production depends on the physical and chemical properties of the soils on which they are established but these are possibly moderated by the management approach that farmers adopt. We assessed and compared soil physico-chemical properties of young, mature and old organic and conventional cocoa agroforestry systems at two depths (0–15 and 15–30 cm) and evaluated the production of cocoa pods, banana and plantain in the two farm types. Cocoa farms under organic management had 20, 81, 88 and 323% higher stocks of soil organic carbon, P, Mn and Cu, respectively, compared to those under conventional management. Higher soil moisture content, electrical conductivity and pH were found on organic systems than the conventional farms. Annual cocoa pod production per tree was similar in both cocoa systems (Org. 10.1 ± 1.1 vs Con. 10.1 ± 0.6 pods per tree). The annual production of banana and plantain was higher on organic farms (186.3 ± 34.70 kg ha−1 yr−1) than conventional systems (31.6 ± 9.58 kg ha−1 yr−1). We concluded that organic management of cocoa agroforestry systems result in soils with the greater overall quality for cocoa production than conventional management and it increases the yield of co-products. Studies focusing on the impact of organic management on cocoa agroforestry systems at the landscape and regional scales are urgently needed to further deepen our understanding and support policy.
“Cynics and Stoics” is an investigation into ecological aspects of both schools’ injunction that individuals should practice “self-sufficiency” (autarkeia) and live “according to Nature.” The relationship of autarky to the sustainability of systems on a global scale is considered in light of Cynic and Stoic cosmopolitanism and virtue ethics. The relationship of subsistence to sustainability is illuminated by Cynic practice and grounded in the modern concept of “appropriate technology.” The Stoic doctrine of oikeiōsis (“proprioception”) is presented as an early instance of an “environmental ethics” that still speaks to the manifold relationships that human beings have to one another and that our species has to the rest of the natural world.
“A City for Pigs” portrays Plato as a systems modeler of a sustainable society. Plato’s argumentative methods, in the Republic especially, are favorably compared to techniques of computer simulation and to the heuristic objectives of game theory. Plato’s views about social cooperation in the use of common-pool resources, for example, are shown to be strikingly similar to conclusions reached via field studies by Nobel laureate Elinor Ostrom in Governing the Commons: The Evolution of Institutions for Collective Action (1990). Plato’s own homology, of city and soul, provides a compelling rationale for both individual and collective action vis-à-vis the environmental and social problems we still face today.