Schellter Strategy Consults BV - Shareholder & Stakeholder Sustainability

Our future decision-making has the potential to be driven by environmental, social, and economic considerations. (especially, if we price things right)

People, Planet, Profit: The 3 Ps

Many of the challenges that an organization will need to deal with over the generation ahead involve disagreements between academics, between economists and industry, and among authorities world wide.   Running an innovative organization can be based on the principles for guiding action for resolving disputes and finding areas of common ground. It’s easier to discuss problems and concerns without blame or attack when everyone agrees on basic principles. A set of six principles emerge:  

1. Whole System Thinking 

Strive to understand issues from a perspective broad enough to see the larger context from which the issues are arising. This requires multidisciplinary net and teamwork to look beyond specialties and organizational stovepipes. It entails striving to understand longer-term implications of actions and interconnections between issues. Most of the current problems are the result of past failures to adopt a broad enough perspective. 

2. Transparency 

Operate in an open and accountable manner, providing the public with accurate, understandable information it can use to make decisions. The organization should continue to press for improvements in transparency and accountability in relation to company performance, executive remuneration, treatment of minority shareholders, risk management and dividend policy.  

3. Inclusive Science and Policy

Maintain a balanced approach that insists on the importance of sound science but also acknowledges the importance of inclusiveness. Engage a variety of disciplines, viewpoints and stakeholders, involve younger academics, and bring to the table people with non-mainstream views as long as their approach is evidence-oriented.  

4. Place-Based Tailoring 

In developing strategies, take full advantage of the human resources and capabilities of local areas. Where uniform policies are not necessary, avoid “one size fits all” approaches, tailor policies to local or regional circumstances, and encourage experimentation. Organizing information in ways that allow communities to see a comprehensive picture of local issues across different media can help local areas to organize their own protection efforts.  

5. Cumulative Risk 

Devote greater effort to understanding risks. More attention is needed to harmonization, with a focus on crafting solutions that protect shareholders and are socially acceptable.  

6. Stewardship 

Take responsibility for providing the expertise and resources to maintain an adequate level of shareholder and investment protection and hence promote stewardship as a major strategy. The organization liaises extensively with other bodies such as regulators, lawmakers, industry groups and accounting bodies.

Saving the planet, or saving our own butts?

  • Production of genetic library for food, fibers, pharmaceuticals, and materials
  • Fixation of solar energy and conversion into raw materials
  • Management of soil erosion and runoff
  • Protection against harmful cosmic radiation
  • Regulation of the chemical composition of the oceans
  • Regulation of the local and global climate
  • Formation of topsoil and maintenance of soil fertility
  • Production of grasslands, fertilizers and food
  • Storage and recycling of nutrients

Where is the “free market”?

  • All participants have perfect information about the future
  • There is perfect competition
  • Prices are absolutely accurate and up-to-date
  • Price signals completely reflect every cost to society: There are no externalities.
  • There is monopoly (sole seller)
  • There is no monopsony (sole buyer)
  • No individual transaction can move the market, affecting wider price patterns
  • No resource is unemployed or underemployed
  • There’s absolutely nothing that can’t be readily bought and sold
  • Any deal can be done without “friction” (transaction costs)
  • All deals are instantaneous (no transaction lags)
  • No subsidies or other distortions exist
  • No barriers to market entry or exit exist
  • There is no regulation
  • There is no taxation (or if so, it doesn’t distort resource allocation in any way)
  • All investments are completely divisible and fungible
  • At the appropriate risk-adjusted interest rate, unlimited capital is available to everyone
  • Everyone is motivated solely by maximizing personal “utility”, often measured by wealth or income

What might capitalism look like if living systems mattered?

  • The environment is not a minor factor of production, but rather is “an envelope containing, provisioning, and sustaining the entire economy”
  • The limiting factor to future economic development is the availability of natural capital, in particular, life-supporting services that have no substitutes and currently have no market value
  • Misconceived or badly designed business systems, population growth, and wasteful patterns of consumption are the primary causes of the loss of natural capital, and all three must be addressed to achieve a sustainable economy
  • Future economic progress can best take place in democratic, market-based systems of production and distribution in which all forms of capital are fully valued: human, manufactured, financial and natural
  • One of the keys to the most beneficial employment of people, money, and the environment is radical increases in resource productivity
  • Human welfare is best served by improving the quality and flow of desired services delivered, rather than by merely increasing the total euro flow
  • Economic and environmental sustainability depends on redressing global inequities of income and well-being

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