The world is in shock. Currently everyone is paying attention to the terrific consequences of the financial crisis. Companies just struggling to survive, governments strongly intervening into markets in an unthinkable way even for Keynes himself, entrepreneurship and venture capital activities went down, economies paralyzed. Who can think about sustainability in the middle of this mess? Well, this COULD be the right environment for a deep change.
Some time from now, economies will recover and markets will speed up. Cash will re flow in the financial market, the best investment opportunities will attract lots of capital because everyone wants their cut in apparent easy money, this will make values in the particular investment market (say real estate for example) to increase at an unreasonable pace, much faster than the real economic growth creating a bubble (a term very ‘a la mode’ lately). When the pressure difference between the inside of the bubble and the outside is enough, the bubble bursts and ‘voila’ a new financial crisis. Is this (extremely simplified) model inevitable? Are we doomed to go through this cyclic crisis with euphoric crests and terrible troughs? Wouldn’t it be better to gently walk through a consistent and sustained growth?
If your answers to those three questions were NO, NO, YES then we are on the same page. If you don’t have the answer about how to achieve this but you are willing to look for one, let’s do it together throughout this modest blog posts.
But, how can this be the right moment for a change? Well, let’s use a simple analogy. Imagine that you have your own house and for a long time you’ve been thinking about improving the insulation in all your walls and windows. You KNOW this improvement will mean less energy consumption which is good for the environment and for your pocket; plus, you would get less noise from outside, making your life inside the house a more pleasant experience. Nevertheless, you never improve the insulation either because you can’t afford the initial investment or because between study, work, sports, friends, family, your insulation is placed 101 in a 100 long list of priorities. Now let’s imagine (only imagine, luckily) that a tornado comes and destroys the structure of your house. You are devastated, looking somewhere to sleep. Insulation is number 201 in your list now. But when the first days have gone by and you start thinking about constructing the house again (kind of the moment we are after the financial crisis), the insulated walls come to your mind. It may delay one month the construction, but, if you don’t do it now, you will never do it. Let’s Do It, Now!
Im definitively a NO, NO, YES guy. But, do you think the insulated walls (sustainability) will ever pay off the initial investment? How long will it take?
ReplyDeleteWeird metaphor, but effective, I liked it. Although this idea requires for all of us to be on the same page, we can do this! Even if the sustainability needs a century to pay off, it's worth it. A cyclic crisis is worst than any investment.
ReplyDeleteI guess the period for pay off depends on the industry and on how you measure it (among other things). What I mean is how to quantify some of the intangible benefits of sustainability? Such as social impact, environmental impact, work environment, productivity ... (and the list goes on and on)
ReplyDeleteIn my opinion, 2007 crisis had been developed because of weak government intervention in the regulation of financial market . Could be that the solution? Today may be yes, in ten years??
ReplyDeleteI think nowadays there are some topics in which countries are putting their concern to have a more sustaineble world. For example enviornmental impact. The "Kyoto protocol", which objetive is to reduce carbon dioxide production, was signed in 2000 by most of the countries except from Unitates States and China ( both are in top 2 of green house effect contributors) Nowadays, as we all hnow is being develop a new world conference to debate Enviornmental Impacts. The great news is that United States promised to signed the new agreement. This gives us the reason to think that countries want to stop climate changes being develop because of the greenhouse effect and ozone problems.