Allison Herren Lee, acting Chair of the US Securities and Exchange Commission (SEC), gave a rousing address to the Center for American Progress two weeks ago. Describing a recent shift towards investments in Environ-mental, Societal and Governance (ESG) she said: “There is really no historical precedent for the magnitude of the shift in investor focus.” Herren Lee suggested that distinctions between what’s “good” and what’s “profitable” have lost their force as “investors, asset managers responsible for trillions in investments, issuers, lenders, credit rating agencies, analysts, index providers, and other financial market participants” embrace “sustainability factors and metrics as significant drivers in decision-making, capital allocation, and pricing.”
According to Herren Lee, a year of Covid-related disruptions has offered a grim foretaste of what climate change could wreak if ESG concerns remain neglected. These concerns are not just a priority for investors but “a challenge for our entire financial system and economy.” The urgency of that challenge is palpable in the harsh backlash so many governments have faced for their fumbling efforts to maintain economic stability or to ensure timely vaccinations. Such failures reflect not only poor leadership, which is never in short supply, but a larger inability to gauge the social and economic chaos that a system wide crisis like a pandemic can produce.
While the importance of governance has never been clearer, the media still tend to focus elsewhere. No one asked about the pandemic at President Biden’s first press conference, for instance. Instead he was probed about his re-election, the border crisis and the filibuster. America’s unused AstraZeneca vaccine stockpile — which could be shared with other countries — the lagging vaccination of minorities, questions about variants and vaccine production were set aside, possibly because the administration had exceeded its goal of 100 million vaccinations in the 100 days. That milestone sounds impressive but is it a sufficient reassurance when an advanced and well-regulated place like Germany is struggling to contain a third-wave of infections that could rise to 100,000 new cases a day?
Outmoded or needlessly complex systems are part of the reason that Germany has done such a poor job of delivering vaccines. Its 16 federal states, many with cumbersome bureaucracies, have been placed in charge of vaccination programmes. A doctor interviewed by CBS described the resulting process as “insane” adding that “You can’t expect an over-80-year-old to fill out 10 pages and numerous consent forms and ask them to call a hotline to make an appointment.” As a result, Germany has only vaccinated about 10 percent of its adult population, compared with 55 percent in the UK and 25 percent in the US. Brazil lies at the other end of the governance spectrum. There, well-documented mistakes by the Bolsonaro administration have produced catastrophic failures to deliver adequate vaccines, equipment and oxygen supplies, with horrifying consequences. Between these extremes, political and economic frameworks that prioritize renewal energy, modern infrastructure, and streamlined governance are gradually replacing the defunct systems that we currently rely on. The Covid pandemic has underscored our collective need for these to emerge sooner rather than later.
