Willem Klok

My personal motivation for investigating the financial regime ties strongly to my personal motivation. For as long as we know it, the world of finance (i.e. planet finance), has drifted further and further from reality. I think this divergence started with the limited liability legislation that emerged during the 19th century. These laws ensured that investors could not be held liable for their investments’ financial losses beyond the amount of capital they invested. In other words, investors can’t lose more then they put in. From a financial perspective this made sense, but it was the first step toward the path we’ve now been walking down for decades, toward a space where the investor has been financially, but more importantly morally, exempted from the responsibility of the effects of their actions on the world in which we live. As such, they’ve literally created a world to which the moral values we hold so dearly no longer apply. The immoral person is not the person providing te coal company with the incentive (read: money), to burn it, but only the person engaged in the act. Right now, there is a big gap between the places where our money should go (climate mitigation and adaptation) and where it shouldn’t go (fossil industries). Yet, things are changing to narrow this gap. Incorporation of transition risk for fossil assets, subsidies for renewable energy, non-financial disclosure regulation… it seems that the regulator is starting to take action. But what are we actually doing? We’re changing the real world so that it’s more compatible with the type of finance the financial world is willing to provide. By making fossil fuels more expensive, and renewables cheaper, we are making the energy transition also the economically desirable transition, such that the financial world can provide the capital we need. Of course, it is one way to make the world more sustainable. The problem is that for it to work out in the long-term, we need to (1) put a price everything and (2) enforce it on a (3) global scale. While I truly admire this ambition, we should be realistic and admit that it will never be practically possible to achieve all these three things, let alone in the narrow window we have to take action. I think that instead of trying to turn the real world into numbers of profit, risk and loss, we should bring back the world of finance to the place we all live in. Only a world of extended responsibility, not limited liability, is a world that has a future.