A Time of Monsters

Sustainable finance is off the rails

An article in the Harvard Business Review (HBR) invoked a series of ideas that is testament to the dangerous political activism taking place in financial institutions around the world.

The authors attribute the decline of interest in sustainable investing to

A shifting political landscape—intensifying rivalry between nations, increasing social polarization, and a populist backlash against sustainability efforts—is radically redefining the conditions under which corporations must survive and thrive.

The authors encourage sustainable investment groups to hold fast to their cause because, among other things, “Planetary realities will shape politics”

While politics may trump other considerations in the short term, in the last 50 years the number of disasters due to climate change and changing weather has already increased by a factor of five. Of the nine dimensions assessed under the planetary boundaries framework, a method for determining the risks of disturbing critical Earth systems, six had already been breached by 2023, increasing the risk of irreversible environmental damage. A failure to contain carbon emissions and a deteriorating climate situation, revealed through increasingly dramatic events like the recent Los Angeles fires, will eventually mobilize popular opinion and reshape politics. Ironically a deterioration of climatic conditions may even enhance the probability and intensity of a bounce back.

As part of their conclusion, the authors state:

In transitioning from one sustainability regime to another, leaders should not expect an orderly or predictable trajectory, but rather a complex and confusing liminal period, or what Italian philosopher Antonio Gramsci termed “a time of monsters.”

These core points (among others they use) misrepresent scientific knowledge and use an intellectual tradition that calls for a violent overthrow of the international order. Let’s start at the end and work our way up.

Antonio Gramsci was a leader of the Communist Party in Italy during the early 20th century. Gramsci opposed Mussolini’s dictatorship which landed him in a fascist prison where he wrote The Prison Notebooks. The full quote about monsters is as follows:

The old world is dying, and the new world struggles to be born: now is the time of monsters.

The statement characterizes the shifting political landscape of the time and the rise of dangerous leaders. The quip has become popular.

According to the ever useful, Stanford Encyclopedia of Philosophy, Gramsci is known for his philosophy of praxis which rejects the value of empirical knowledge in shaping ideas, propositions, and predictions.

Instead, as described in the encyclopedia:

[Gramsci] suggested that mass “adhesion or non-adhesion to an ideology is the real critical test of the rationality and historicity of modes of thinking”, not just direct correspondence of theory to an independent reality (SPN: 341); and that “prediction” was not so much “a scientific act of knowledge” as “the abstract expression of the effort made, the practical way of creating a collective will” (SPN: 438). Gramsci compared the philosophy of praxis to the Protestant Reformation in so far as its success resided in generating cultural agreement to cement civil and political unity (SPN: 395).

From this philosophical- political viewpoint there is no practical reason for distinguishing science from 100% full throttle woo-woo, so long as people’s thinking and action are aligned.

Let’s move back up the line of argumentation provided in Harvard Business Review.

The HBR authors invoke a misleading statement about disasters around the world: “in the last 50 years the number of disasters due to climate change and changing weather has already increased by a factor of five.” This statement originates from a 2019 WMO report that received extensive critique for irresponsible use of data in the EM-DAT catalog. EM-DAT, valuable though it may be, suffers from severe data quality issues and various biases making the data prior to ~2002 unreliable for trend analysis.

The bit about the LA fires is also false.

The HBR authors then connect disasters with the wholly normative marketing campaign of the planetary boundaries framework which is, today, a key rallying cry for remaking the global financial system (and health system, too).

In recent years, the developers of the planetary boundary framework- Johan Rockström, Tim Lenton, and colleagues, have more forcefully called for a new order of international relations oriented around central management of the world’s natural resources and socio-economic systems.

Writing in 2024, Rockström and colleagues declaire that their vision entails a weakening of the nation-state:

implementing a governance system for the planetary commons will likely challenge barriers of state sovereignty and self-determination.

In replacing state sovereignty the authors call for global central governance:

An earth system governance approach will require an overarching global institution that is responsible for the entire Earth system, built around high-level principles and broad oversight and reporting provisions. This institution would serve as a universal point of aggregation for the governance of individual planetary commons, where oversight and monitoring of all commons come together, including annual reporting on the state of the planetary commons.

Who and how should the world be coordinated?

For their part, Rockström and colleagues (2024) call on the UN General Assembly. In the past, planetary boundaries comrades also considered the UN as an apt locale for coordination.

To be sure, this is neither a new argument from them and the core vision is not a new argument. A weakening of the nation state and strengthening of the UN as a coordinating mechanism of world resources shapes the narratives considered ideal for climate change mitigation.

By comparison, the time of monsters, as described in the HBR article, appears to align with the current SSP3 narrative which explicitly takes as inspiration the social and economic trends “on the eve of World War I.”

Since at least the 1970s computer modeling was seen as a key mechanism for informing decision making about coordinating use of the world’s resources. The newest evolution is the turn towards AI (the latest in computer modeling) as a mechanism of ecological and social control. The lead author of the HBR article, George Knell, is chairman of the asset management firm, Arabesque, a leading supplier of data and AI technology to the finance industry. Knell is also know for his work as founding Executive Director of the UN Global Compact which corporate investment practices around UN policies.

The move towards AI as an all central organizing accountability mechanism can be observed elsewhere, as well.

These are powerful forces using a line of reasoning that views science only for its symbolic power and not for actual empirical knowledge to inform decision making. In this context, science-y looking woo-woo is a mechanism for mobilizing the masses towards overthrowing the economic and financial international order.

This sounds ludicrous, I know: Capital C. Capital T.

And yet, there it is, clearly laid out plain as day in a Tuesday article of the Harvard Business Review.