1. http://pricetags.files.wordpress.com/2008/04/800px-london_millenium_wobbly_bridge1.jpg Finance for Sustainability Bard MBA in Sustainability Launch Event January 24, 2012

3. 1. Our UNSUSTAINABLE economic system

4. “Safe Operating Space” -- The world is full “Safe Operating Space” - National Center for Ecological Analysis and Synthesis

5. Symptom: Increasing Wealth Inequality http://www.inhabitat.com/2010/10/14/worlds-largest-and-most-expensive-family-home-completed/ Wealth Disparity: 2% of population Controls > ½ the World’s Wealth 50% of population controls < 1% of World’s Wealth Income gaps between rich and poor > 2X in last 50 years Spain v Denmark Norway Finland Sweden Netherlands Switzerland Belgium Germany Austria France Canada Italy Australia Ireland Greece New Zealand UK Portugal Japan USA Better Low Wealth Gap Wellbeing Worse High Wilkinson & Pickett, The Spirit Level (2009) Wealth Gap vs. Wellbeing

6. 2. How we got here Our economy has become an anti-economy, a financial system without a sound economic basis and without economic virtues. - Wendell Berry

7. Economic Efficiency Economy Finance What’s wrong with this picture? Desired Outcome Planet

8. The most important chart in the world…

9. Sustainability Optimum Efficiency 100% 0% Resilience Source: Lietaer, Ulanowicz, Goerner 2008 Sustainability in Natural Systems Collapse of Financial System

10. 3. Finance: Critical acupuncture point

11. Sustainable finance: bottoms up Internalize externalities - CSR, ESG New tools - Integrated reporting New (and old) ideas - Impact investment

12. Sustainable finance: top down (systemic) We are lost in finance… What is an “IRR” when we know everything is connected What will replace MPT which sees risk as historical SD in a world facing “phase shift” uncertainty?

13. Stranded Assets: our $20 T “Big Choice” 2 degree warming limit: 565 GtC02 “Proved Reserves” have 5X this amount 74% owned by States, 24% by companies At current market value, $20 Trillion choice Source: “Unburnable Carbon”, Carbon Tracker Report

14. Resiliency: Driving financial capital upstream http://3.bp.blogspot.com/_o0s746IzxZQ/TJwMEtnPvsI/AAAAAAAAAWo/lX-2e- wPZzo/s1600/upstream.jpg

15. John Fullerton jfullerton@capitalinstitute.org www.capitalinstitute.org Thank you