The ultimate goal of the responsible investment movement is to not exist at all, argues Banking and Finance Oath director Clare Payne.
If one type of investment is ‘responsible’, then what does that say about all the others? That they’re all ‘irresponsible’?
Medical researchers work to eradicate a disease by finding a cure that will render their services obsolete. The responsible investment community should behave in the same way.
However, for now the mandate and the work of the responsible investment community is very much needed – because we’re not there yet.
It is important to provide a range of services, advice, investment vehicles and opportunities focused on responsible investment, but more needs to be done to target the whole market.
Practices must be embedded within the hardest businesses and inch them – however slowly – towards consideration of environmental impact, exploitation, well-being and the health of people now and in the future.
This is where the Banking and Finance Oath (BFO), a Hippocratic oath of sorts for those in the banking and finance industry, can help.
The BFO gives every individual in the industry a lead-in to start a conversation to drive significant change.
If I’m sounding like I’m peddling something, the fact is I am peddling ethics in the banking and finance industry.
Some would say I’m pedalling up hill in one of the toughest stages of the Tour de France – but in 2014 we’re seeing a different landscape.
There’s more open road, more people on the road going in the same direction, more interest from the sidelines, and there’s less resistance.
We may think we’re already wearing the leader’s jersey, but that would be a matter of opinion, not fact. It depends which race you’re in.
There’s no silver bullet to ‘fix’ the banking and finance industry of all its woes.
As with any complex system there are many things that need to happen at once, in co-ordination with, and in respect of each other, in order for it to function efficiently, fairly and for the good of society – the way it was originally intended.
Reasserting the ethical foundation of the industry, giving its members a way to start a conversation through the BFO is just one part, but a very important part.
The BFO is not the beginning of ethics in banking and finance – it’s an articulation of it.
The banking and finance industry is subject to much regulation.
Each scandal, whether it be financial planners or ‘rogue’ traders, is met with increased regulation – but we all know that regulation and laws cannot account for all possibilities.
Markets innovate, new products become available, things start to work in ways never intended and cultures can get corrupted, however big or small.
We need to accept these realities and talk about ethics, morals, society, social contracts, respect and expectations – rather than fines, penalties, investigations and inquiries.
We need to expand the language of the industry so that these words become commonplace in organisations, at conferences, in teams and in everyday business.
Graduates are now entering the banking and finance industry with these concepts clear.
I teach business ethics at two Australian universities and it is covered at many more.
I hope that when my students join the banking and finance industry they’re happy with the career choice they made, that it will satisfy their social conscience, and that they will see that ethics and banking are not incongruous terms.
As seasoned members of the industry we should make sure these young people are heard because they may just be the ones that have the stamina and foresight to ensure responsible investment really does get that yellow jersey on its back.
Clare Payne is a Consulting Fellow for Ethics in Banking and Finance with the St James Ethics Centre.