About Simon Zadek

Simon Zadek is an independent advisor and author. He blogs at www.zadek.net/blog.

Articles by Simon Zadek

This week's editor

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Adam Ramsay is co-editor of OurKingdom.

Can we believe China's Corporate Social Responsibility rhetoric?

China is talking the talk of Corporate Social Responsibility in its 12th 5-year plan. It has even endorsed the UN Guidelines on Business and Human Rights. Simon Zadek argues that the new economic superpower sees a real interest in responsible and clean business, and that deeds will follow the rhetoric

Dear Mr Wolf… Reflections for the Magic Mountain

Can Davos 2012 offer real alternatives or will it serve up a smiling, gritted-teeth espousal that ‘business as usual’ can and should be sustained?

Durban: failure will be success (again)

There is no global deal nor any chance of one at Durban's COP17. Fortunately, "Plan B", predicted by the author after COP15, is looking feasible and even healthy. Welcome a profusion of national, regional and city initiatives to save us from devastating climate change

Sustainable finance is the way out of crisis

S&P, in downgrading the USA, made the right call for the wrong reason. Keynesians like Jeffrey Sachs see this but need to go even further: the developed world will come out of recession only when the mighty engine of finance turns to the task of developing a sustainable future. And that faces political, not economic obstacles

PFI pigeons come home to roost in the UK. What will the bill be for Africa?

Freedom of Information act requests are now revealing the full cost of the off-balance sheet Private Finance Initiative (PFI) structures used to finance so much "public" investment in the last 20 years. If we ever find out, how much will such schemes end up costing Africa?

The five squanderings of the UK's assets - the real losses behind the election everyone lost

The UK election may have disappointed all the party leaders but over the past 40 years the country has recklessly thrown away its advantages. Can they get together for the fresh start that is needed?

Zadek in Davos

We've survived the economic crisis, but global governance failed. Davos 2010 should be about fixing it. Are we ready for de-Hayekification? From Zadek's blog.

How we were led through the noughties

How was the world led through the decade? Wisdom, power or might? (from zadek.wordpress.com)

Learn from Copenhagen's failure

The way the global commons is run must be turned upside-down. (From zadek.wordpress.com)

The money's there

There is a climate deal to be done after the Copenhagen debacle: issue sovereign debt for green investment. From www.zadek.com

Refining the revision of Plan A

Zadek responds to the commentary on his argument that any top-down multilateral agreement relying for success on sovereign abatement commitments and international public finance funding credibly verified outcomes is doomed to failure. (From zadek.wordpress.com)

Blair takes a spin by Copenhagen

Simon Zadek blogs from Copenhagen. Was Blair worth his carbon footprint yesterday?

Remember - 14 Giga Tons

Simon Zadek blogs from Copenhagen

What Lisbon means for Europe

openDemocracy asked five of our authors for their takes on the passage of the Lisbon Treaty. Here are their comments

Plan B on climate: national deals

Copenhagen will not deliver the right global deal. It is time for nations to save us from climate catastrophe.

Need new governance

Howard Rheingold, "Literacies, Collective
Action, Participatory Media"Friday, (Day 3): over the peak and heading for end-station Sunday...there is a seriousness here, a focused concern that is strangely settling...despite the usual chaos of Davos’s unfounded hopes, dissassociations of responsibility, technological idealism and the occasional relapses into post-Friedmanite market mania...there is an inner reality that most folks here seem to share, that the exercise of globalisation has indeed gone wrong, that Business as Usual will deliver more of the same toxic results, and that tinkering with the system will not do the job.

The facts now go undisputed, a huge step forward in itself from previous eras of outright denial. No one in the room disputed the shocking data point that by 2020, 85% of the world’s population will live in water stressed area unless something changes As Nestle Chair, Peter Braebeck, made clear in his speech in Saudi Arabia and has reiterated every time he has had the chance here at Davos, “we will run out of water long before we run out of oil”. Businesses as much as labour organisations have embraced with horror the fact that in the last year, according to the ILO report timed to coincided with WEF, 50 million souls have been registered as having been made unemployed, excluding in the main China and the many millions who have slipped, or who have been booted, out of the labour market unnoticed by the statisticians...and with the US alone exorcising a cool 0.5 million a month, the numbers are unquestionably going to rip off the roof...

 

 

Simon Zadek is Chief Executive of AccountAbility

As in 2004, 2005, 2006 and 2007 he is blogging from the World Economic Forum at Davos on openDemocrac and on Accountability in 2009.

Also by Simon Zadek in openDemocracy:

" From the magic mountain: the World Economic Forum "
(29 January 2004)

" openDavos: Simon Zadek's blog "
(February 2005)

" Reinventing accountability for the 21st century "
(12 September 2005)

" China's route to business responsibility " (30 November 2005)

"Accountability: the other climate change" (31 October 2006)

"The World Economic Forum: changing the world from within" (22 January 2007)

"After the binge" (6 January 2009)

With such diverse players and interests around the table, there is common cause created and demonstrated here in merely accepting these and many similar numbers.

Lobbying and tactics and debate and argument come in discussing culpability and solutions... On the former, there are some curious perspectives at play, ”you cannot really blame alone the US for over-consumption, a massive consumer credit boom and living beyond its means”, explained one person patiently to me, “after all, we were just mopping up the inapprorpriate trade surpluses of Germany, Japan and China”...actually, such views would not matter if they didn’t, but they do because they inform the next act...in one discussion of the timing of the end of the recession (ranged from a few folks saying last quarter 2009, most folks saying late in 2010 and a few would-be suicide cases voting for 2012 and beyond), I argued, “it is not so much when it ends, but how we emerge from this mess, politicians will be desperately tempted to unlock the cage and let consumer credit roam the streets once again, so swamping any attempt to deliver a green fiscal stimulus”...nonsense, I was told, consumer demand in itself is not part of the problem, “it is the best form of democracy that we have”.

But that said...pretence is at a remarkably low ebb, certainly less than ever before...the main game, the parallel world of private sessions full of CEOs and ministers with a liberal scattering of NGOs, the tough questions are, one way or another, on the table...what does it take to cut a decent climate change deal, how to fix the financial system, ways of addressing the water crisis, means of preventing food speculation...this is the conversation in play, and it must be said outside of the glare and reward of public relations...as one CEO insisted in a tricky discussion about scope of accountability for water management in supply chains, “lets not posture, we have to get stuff done, now, in securing water for communities, or else none of us have much of a future”.

And the Davos crowd is in fact the team, if they were a team, like it or not, with the power to make decisions on our collective behalf, thrown up by hard work, heritage, luck and perhaps occasional misdemeanour into positions of power. They do have the power to make a difference, in fact they have a rare opportunity in this moment of crisis to rewrite the rule book...to actually change the course of history. And to top it all off, the Davos crowd is hugely intelligent, on the whole rather nice, and in the main, deeply moral.

..But here is a strange thing, because many of the sessions dealing with the right topic, an appropriate sense of urgency, and with these folks in the room, seem to exude uncertainty complete with an eerie feeling that someone notable is missing...its a little hard to explain, but everyone seems to be talking to someone who isn’t there...sometimes this is quite concrete and specific...leaders of some of the world’s most powerful companies worrying that it is local authorities (absent of course) that hold the key to solving the world’s water problems...or with some of the world’s political leaders in the room discussing climate change, they look towards business in seeking permission or guidance in how best to move forward...and as for the NGOs, well, I have already made this point in earlier blogs... but mostly it is not so concrete, but a real, undisclosed collapse of confidence that the club has the right members, the right mandate or arrangements, to sort out the mess.

The problem of course, are the institutional bonds that hold extraordinary people in place...the most amazing business leader, in flight through a insight, is struck dumb through a need to reiterate, “of course we will only do this if makes money”, just as the charismatic and insightful politician lowers his or her sights with the words “...but the people I represent are not concerned with this”...it is as if some great bluff, a grand, well-intentioned hoax is required to save the planet and us all in it... climate change is predicted, if unabated, to wipe us all out, but to rise collectively into action, we have to posit or even guarantee a low carbon prosperity that allows for driving (electric), flying (biofuel), and meat eating (electric sheep ?)... now of course economic development counts, just as private property rights and the role of private capital needs to be protected and indeed nurtured... but it beggars belief that no one stands back and at least asks, ‘are we really making the right assumptions about how to organise our political economy and the role of its principal actors.

It is as if some Anglo-Saxon view of corporate governance and fiduciary responsibilities was a mandate from some greater being... I am a member of WEF’s Global Agenda Council on corporate governance, along with some fine folk such as the great investor activist, Bob Monks and the executive director of the International Corporate Governance Network, Anne Simpson. At our first jamboree in Dubai earlier this year (along with no fewer than 70 other Councils covering every conceivable topic), we debated trends in corporate governance. A true-blue argument flared up over the topic of public ownership. On the one side was, yes you guessed it, me, arguing that a revival of public ownership provided an opportunity to revolutionalise the manner in which the public interest could be exerted through ownership, a step wise change from the relatively limited and highly constrained ‘responsible investment’ movement. The dozen or so real experts around the table were, frankly, horrified, and argued strenuously that the world had to take steps to ensure that these public owners behaved like, yup, you guessed it again, ‘private, commercially-focused owners’... only in this manner, so the argument ran, could a real level playing field in ownership be sustained given the regulatory power of governments and their diverse and politicised interests.

We are blighted by the way things are, in our minds as much if not more than how they are on the ground... public-private partnerships have earned themselves, in many respects, a bad name. And often for good reason, as private capital fails to deliver the goods, lines of traditional public accountability are lost, and profit variously appears to be gained on the back of poor public services, or is lost by the bucketful where the politics are just too hot to handle... but these partnerships, in their immense diversity and mixed records, is the closest we have got to in experimenting in true institutional cross-dressing... yes, companies are at the table of the Global Fund for HIV, AIDS and Maleria with a profit mandate, just as labour represents its constituencies in the Ethical Trading Initiative or the MFA Forum. But ‘doing partnerships’ can have an unexpected, almost neurological impact on organisations and the folks who work in them... NGO leaders experience the profit motive, just as businesses don the garb of social mission-focused activities...

I suspect that we will not wake up any time soon and find that the traditional roles of our key institutional actors have changed, fundamentally... but it might just turn out that this is exactly what is needed to overcome the irony of those in power being constrained by their basis of accountability to make the changes that we now in some sense all know are needed. Now I am sure that I will not be celebrated or rewarded here or in heaven by encouraging such institutional cross-dressing as the hard road that we need to pass along. But it is worth at least a thought, whether we have indeed reached a Kuhnian cross-roads in the organisation of our affairs... And as we turn as a generation to the matter of governance, whether for global trade, to manage climate, to secure water, to stabilise food supplies or just to bake bread and biscuits, it is worth I believe considering some more radical options based on a hard nosed view of what is not going to work, and an insightful take on the potential offered by today’s experiements.

This blog posting is a re-post from:

Do prices count?

Oil is cheap. New York’s main futures contract, light sweet crude for March delivery, traded at $41.63 a barrel today, while Brent North Sea crude for March fell 68 cents to $44.22. By almost any measure, it is just not enough. “We are not happy with $40 even $50 a barrel,” Abdalla Salem El-Badri, Opec Secretary-General, told a panel discussing energy security. And they are not alone. Tony Hayward, the chief executive of BP, told the panel that Opec countries needed a price of about $60-$80 per barrel to balance their budgets and invest in social programmes. “A price somewhere between $60-$80 would be appropriate,” he said.

Cheap oil, you would think, translates through to reduced eco-innovation, much as a low price on carbon would...but things are apparently not that simple. Attending a session about how consumer retail companies were innovating in pursuit of sustainability, I asked what I thought was an innocuous question, “at what level do energy and carbon prices drive innovation”...the answer, provided by two CEOs, was kind of a shock, “you don’t get it”, said the first, “sustainability is just part of the business, its not about energy prices”, and the second followed this up with the equally intriguing comment, “you might as well talk about rice prices, or the price of water, these are equally important”...well yes, but...hmmm.

Business leaders here, or at least some of them, seem to believe that the climate thing is beat...technology, innovation and business prowess is what it takes, and there is a lot of all three at play. Unfettered markets and Schumpeterian Umph has considerable cache, it seems, more than any talk of accountability...but to be fair, that is not quite true, one CEO in the same session declared, “we need to redefine our field of responsibility”, a view that received the nod-through assent of the assembled $500 billion a year worth of businesses...but in this world, responsibility is exercised through innovation, not any traditional view of accountability (I have a weird feeling I have written about this already today – have a look at the earlier blog on the NGO sector, here ).

It has to be said that edible packaging, collaboration to fill empty trucks, value chain redesign to reduce energy use, and product reconfiguration to deliver the ‘experience not the stuff’ has indeed moved from the movies to the mainstream...there is no doubt that many businesses have got it at a gut level, “we cannot expect to continue to provide body cleaning products unless we can secure a sustainable supply of palm oil, and the Rainforest Alliance can ensure that our coffee is fair bought” are the kinds of remarks that would have caused celebration at the Body Shop less than a decade ago, and it is a true development that it is increasingly part of business as usual. And there is little doubt that most civil activists under-estimate by a massive factor the power of business innovation to deliver meaningful solutions.

But why must innovation and accountability be at such odds, a sort of West Coast – East Coast thing, social entrepreneur’s and mega-businesses alike cannot, it seems, be constrained by mere accountability where innovation and values provide a heady blend that will lead us our of our current quandries.

This blog posting is a re-post from:

NGO sector held to account

WEF 07 - DavosActually the session title was ‘sustaining the ngo sector’, a lunch session with 50 + NGO leaders discussing the impact of the downturn on the community...an amazing group of people of course, as the uplifting series of opening presentations amply demonstrated...discussion about mergers and acquisitions and currency management seemed quite normal to these folks, alongside the more familiar concerning calls for support to the community in helping – yes – the community.

 

It was Ingrid, the now-not-so-new Secretary General of Civicus (note that her predecessor, Kumi Naidoo, is on hunger strike in a large scale campaign for change in Zimbabwe (check out UTube for more on this: http://www.youtube.com/user/civicusworldalliance), who landed the matter of the fabric of the NGO community itself, “in recent times, no fewer than 87 countries have passed or are advancing legislation that will to varying degrees muzzle civil society...in our understandable prioritisation of those directly impacted by the recession, let us not forget civil society itself”...

My take on the moment was offered minutes later in a somewhat different vein, “civil society has blossomed in recent decades, and now employs more and secures more money than ever before, our growth rates have exceeded those of China...so do we feel proud of ourselves as we enter the greatest global recession in history, do we feel as we rightly point to the flaws of business and political leaders that we escape blame...surely our current circumstances suggest that we are culpable in having failed, fundamentally, in shaping society as it should be”...curiously, the session moderator stepped in before any answers were forthcoming, “lets not talk about culpability, but maybe responsibility”...well no, that is the point surely, I pondered (to myself), culpability is essential if someone or something can be held to account, responsibility is a means of avoiding such starkness. We highlight this difference when we call out business misdemeanour, but seem unwilling to apply it to ourselves.

This could become an entirely unintended Davos theme, and I apologise in advance for any irritation it might cause.

This blog posting is a re-post from:

Sands into snow

World Economic Forum Annual Meeting Davos 2007 My annual pilgrimage to the Magic Mountain is always a transcendent experience of departure and arrival...this year more than most, not only because of the extraordinary circumstances but because my point of departure was Riyadh. Saudi Arabia’s Global Competitiveness Forum precedes Davos each year, with chartered flights for dignitaries in motion from one to the other. The Kingdom’s headline topic for this year was, appropriately, ‘Responsible Competitiveness’. Thankfully, the back-slapping moments of last year’s Davos were completely absent, with still-in-post chief executives and political leaders providing some humbling thoughts on the disaster.

 

Simon Zadek is Chief Executive of AccountAbility

As in 2004, 2005, 2006 and 2007 he is blogging from the World Economic Forum at Davos on openDemocrac and on Accountability in 2009.

Also by Simon Zadek in openDemocracy:

" From the magic mountain: the World Economic Forum "
(29 January 2004)

" openDavos: Simon Zadek's blog "
(February 2005)

" Reinventing accountability for the 21st century "
(12 September 2005)

" China's route to business responsibility " (30 November 2005)

"Accountability: the other climate change" (31 October 2006)

"The World Economic Forum: changing the world from within" (22 January 2007)

"After the binge" (6 January 2009)

The out-of-time financial sector, with Mr Thain as its unintended posterchild, rightly provided a natural ‘fall guy’ for the event, with misaligned incentives combined with rampant greed providing the background narrative for all that is wrong in the world. Fair enough, certainly, but a strange sight to see some of the world’s most photogenic leaders offloading any sense of their own culpability. Nissan’s hugely successful chief executive, Mr Ghosh, forwent any mention of the failure of Nissan to invest ahead of the pain in low-carbon transport options. Similarly for Mr Enders, Airbus’s chief executive, who urged us to pray for renewable alternatives to jet fuel as if he and his company were out of the loop of aircraft design and production. As to the future, their prognosis is a deep recession with a ‘return to normality’ within five years...

But back to the Magic Mountain...this year’s topical theme is ‘Shaping the Post Crisis World’, but the mood forces the immediate into focus. Wen Jaibao has just finished his plenary contribution... impressive, with a clear message that its going to be okay, despite the serious economic numbers emerging from China...8% is his magic number, which is the annual rate of growth China needs to achieve to avoid serious social problems...rumour has it that China’s most recent quarter performance is well below that number...Mr Putin is next up, Time Magazine man of the year in 2007, and politician of choice in a side meeting at WEF in Tianjin late last year (see my oD article on this)...only problem is that although it is an open plenary, some folks seem to have little yellow tickets and no one else can get down the stairs...Mr Putin is inclined also to tell us its all going to be ok as long as there is a bit of give and take, by which I think he means he could give us energy security in return for allowing Russian companies to migrate downstream into European retail energy markets, that Russia is left to its own local and regional wandering inclinations, and that Russia be applauded for its autonomy and strength...

Was invited to a productive session on climate change this afternoon, with a lot of brain power in the room and knowledge of the intricacies of this tricky topic. Jeremy Oppenheim from McKinsey set out the stark carbon and economic numbers, reminding those who needed it that every year’s delay added another 3-5 parts per million of carbon dioxide, edging us towards the magic number of 450, beyond which Lovelock’s ‘revenge of gaia’ takes hold to our cost. As a long time fan of Achim Steiner, Executive Director of UNEP, he got my session prize in advancing proposals for a sliding levy on the price of oil as a way of raising the money to finance developing country moves towards low carbon trajectories. By one reckoning, a $10 a barrel levy (remember that in the last 12 months, prices have gone from $60 to $147 and now down to $30, so $10 is pretty trivial) would generate $180 billion a year, coincidentally what Project Catalyst, a climate initiative that AccountAbility is involved in, says is what is needed to cover the bill...

WEF 07 - Davos23.00, sipping piping hot tomato soup in the restaurant of Hotel Ochsen, a cute hotel that has become the hang-out joint for many of the 50 or so civil society and labour invitees...folks like Ken Roth from Human Rights Watch and Ricardo Young from Instituto Ethos make up a sort of undefined ‘international brigade’ at Davos, available to inform, guide and ultimately challenge the conventional wisdoms that always threaten to disable elites that become overly self-contained...Steward Wallis, the New Economics Foundation’s chief executive, sits twisting someone’s ear on the next table...outside of the window, wayward billionaires, ministers of state and spiritual leaders walk unsteadily along the slippery white pavements, avoiding the high-octane Audis cruising the village moving another level of participant from place to place on demand.

This blog posting is a re-post from:

Accounts for the long future

The events of the last twelve months have made 2008 the most important year for decades, certainly since the collapse of the Berlin Wall. Indeed, it is possible that history will place it in even higher esteem than that dramatic, fracturing moment.

In memory of 2008

2008 was the year when China’s Olympics stunned even those with two left feet (like me), when Obama became the President Elect of the United States of America, and when emerging economies, notably China and India, were acknowledged as the inheriting leaders of our global political economy.

It was also the year when an exhausted, over-stimulated global economy finally got crabs and retired to bed, and when we discovered that the theory of ‘decoupling’ was little more than wishful thinking as our new global titans’ supersonic economies stalled and came crashing to the ground. It was the year that container traffic passing through Portland on the US’s West Coast, a reasonable proxy for globalisation itself, was rumoured to be down by 60%.

And it was the year when the growth of public ownership of economic assets, although perhaps not exactly fashionable, progressed more quickly in liberal economies than at any time since the creation of the Soviet Union.

The big binge

2008 was the Year of Corporate Responsibility. After this year, no one in their right minds will ever again question the negative impact of irresponsible business practices, the source of the world’s first global recession along with its consequences of millions upon millions of jobs lost, houses repossessed, families broken, and economies shattered. Never again will anyone be able to look smug in demanding advocates of corporate responsibility to ‘prove it’. The financial community, at enormous cost to us all, has done what no one else has quite managed: to put Corporate Responsibility at the top of the agenda.

Madoff will go into the Guinness Book of Records as the architect of the world’s most expensive scam. He has achieved what no one would have thought possible, making Siemens, Parmalat, BAE Systems and the earlier generation of businesses such as Enron and WorldCom destroyed by white collar thieves seem positively trivial. In fact, Madoff’s stolen billions has hardly raised an eyebrow (save of those directly impacted), because it is little more than the cherry on the cake of the US$1.5 trillion or so burned in saving the very financial community that has been our undoing, the additional US$2 trillion that will be used of taxpayers money to kick-start our failed economies, and the US$5 trillion or so lost to today’s and tomorrow’s pensioners.

Our children and grandchildren will long rue the longest binge-party on earth that brought us to our knees in 2008.

The Environment

2008 was the year when those progressing a global climate change deal applauded the unilateral commitments made by Obama-in-waiting to establish a federal cap and trade system, many praying for this to be a taster of more progressive moves to come. November's high was quickly followed by the dismal experience of the UN-sponsored, annual climate change jamboree in Poznan. This, combined with the order of priorities facing the new US Administration, buried the Danish Prime Minister’s aspiration of the next climate change deal carrying the ‘Copenhagen’ tag. In fact, Europe’s carbon credentials have become jaded over the course of this year. Only a global recession has enabled European leaders to claim some success at reaching their carbon targets. And as we all added another 3-5 parts per million to our common, cumulative carbon congestion, Europe agreed to the single largest ever windfall profit to its dirty industries in paradoxical pursuit of binding carbon reduction commitments.

The year 2008 was the last failing moment of credibility in our inter-governmental approach to global governance, stitched together in the ruins of post-war Europe and the emergence of an Anglo, global political economy. The World Bank, despite its noble, self-seeking attempts to reinvent itself, has arrived at its irrelevant destination, symbolising not the power of a modern global consciousness, but rather a failed, international development model. The World Trade Organisation, despite Mr Lamy’s brilliance and sheer stamina, ultimately fell, perhaps fatally, to the ground. The IMF, facing its most glorious potential, the world’s most striking financial disaster since its inception, has proved to be profoundly useless, with its accumulated treasure of brains and money unable to predict or help avoid the crisis, or play any meaningful role in alleviating its worst consequences.

And our finest example of modern regional integration, the European Union, has fallen (if this is possible) yet further into disrepute, with the Euro’s rules of engagement, limits on public subsidy and hard-fought-for competition framework all falling to the wayside as easily as Autumnal leaves in the face of politicians’ rush for cover amidst economic meltdown.

2008: so bad it is good

All told, with painful paradox, it has been a great year. It is the first year in my adult, professional life that a deep and widespread acknowledgement has emerged that the ways in which we organise our affairs is really not working. It is the first time that I hear the oft-spoken, but to-date marginalised words of radical activists on the lips of our most powerful political and business leaders – that we have to be effective stewards of our natural environment, that our global governance framework requires more than a make-over, and that the basis on which we allocate capital does not deliver the goods.

In this past year, 2008, our image of the omnipotent old has made way for a new conventional wisdom of the need for renewal. For it is in such collapsing credibility, such an extraordinarily, self-evident display of failure, that radical change becomes possible. It is after this year that we can confidently predict that there will be a new multilateral system, a new governance era for the financial community, a reassessment of the role of the state, and a stepwise shift in the tone and content of the climate change negotiations.

2008 has set the stage for long-overdue change

Change, yes, but what kind, for whom and how quickly. Dying institutions representing failing ideologies and practices are always stubborn and often violent contestants. In the end, it all comes down to the need to reinvent accountability. Each and every change so desperately needed involves a shift in the basis on which powerful forces are held to account. Back in 2005, AccountAbility’s pamphlet, ‘Reinventing Accountability for the 21st Century’, started with the following words:
THERE IS A LOT OF IT ABOUT, in fact more than ever before. EVERYONE TALKS ABOUT IT, complaining of its lack or claiming legitimacy because they are, supposedly, subject to it. But there is widespread consensus that THE WAY WE DO IT TODAY IS FAILING US, and that addressing our biggest challenges, from endemic poverty to ageing societies to climate change, depends on us DOING IT A WHOLE LOT BETTER.

Yet the language of ‘accountability’ is paradoxically the preferred currency of those who resist change as well as those who demand it. And this should come as no surprise. We are in many instances not blighted by ‘too little’ accountability, but by way too much of the wrong kind, often protecting the wrong people and promoting the wrong actions and rewarding perverse consequences. The financial community will resist change more than most, citing in its defence of the status quo, with more than a little historical irony, their fiduciary responsibilities. Sovereign states will resist change to their approach to climate change, citing their responsibilities to their citizens. Beyond and on occasion underlying these unhelpful but essentially civilised forms of resistance will be a host of other factors preventing, or advancing the wrong, changes, xenophobia and racism, nationalisms and religious fundamentalisms, underpinned by the basic fear and realities of unemployment and lost livelihoods.

Toxic accountability is the single greatest constraint to progressing much-needed innovations in pursuit of, yes, better accountability and its consequences.

Of the many items on our common agendas for action, two radical needs stand out that our current situation would allow us to make huge progress on.

First, is to change the basis on which the financial community allocates our capital to more closely align investment consequences to our real needs. It is not enough to re-regulate to prevent another meltdown, or to take our rightful revenge on the individual architects of our collective downfall. Capital allocation must be aligned to the needs of sustainable development, internalising social and environmental consequences into the equation. Central in progressing this agenda is an overhaul of the governance of our assets, especially pension fund governance, and the basis on which the investment community rewards itself for handling our assets, notably fund management incentives.

Second, is to advance the climate change negotiations to a successful conclusion, laying the basis for an accelerated pathway towards low carbon prosperity for all. This concerns, centrally although not exclusively, the unlocking of adequate finance for mitigation and adaptation. And here the two-fold agenda collapses effectively into a one liner. For it is unlikely that ‘carbon’ finance can be unlocked in anything like the volumes that are needed. What is required is that the reforms to the investment community, at this historic moment, embed a longer term investment philosophy and practice such that carbon, amongst other things, becomes far more material to investment decisions. It is only in this way that we can resolve the financing needs of effective carbon management.

Failure on either of these related fronts will not only mean an opportunity lost, but predicate a disaster in the making of monumental proportions.

Humpty Dumpty, the post-war political economy, is well and truly bust. It is time to head for the design studio and not the repair shop.

Civil society and capitalism: a new landscape

Michael Edwards's essay "Philanthrocapitalism: after the goldrush" (19 March 2008) raises the alarm over what he sees as the hidden failures in applying the power of business to address pervasive social and environmental challenges. The core argument is that "philanthocapitalism" has been hyped too much and delivered too little; and that it undermines civil society, or at best distracts it from its historic task of using the structures and disciplines of democratically controlled governance to hold power to account.

Accountability's global thread

The foundation of a healthy public realm is effective accountability of governments, businesses and organisations. Each day, there are reminders of how much goes wrong when this quality is absent - not least in corroding the trust of citizens, employees and consumers in those who govern, employ, or sell to them. When accountability practices fail, individual rights quickly erode in the face of those in power pursuing personal agendas and enrichment over the common good.

Simon Zadek is chief executive of AccountAbility, a senior fellow at the Centre for Government and Business of Harvard University's Kennedy School, and an honorary professor at the University of South Africa

Among Simon Zadek's articles in openDemocracy:

"Reinventing accountability for the 21st century" (11 September 2005)

"China's route to business responsibility" (30 November 2005)

"Accountability: the other climate change" (31 October 2006)

"Davos: changing the world from within"(22 January 2007)

"The four faces of the World Economic Forum" (9 February 2007)

"Reinventing global trade: the MFA Forum" (15 April 2007)
The absence of effective accountability is the trigger that eventually leads societies to fail - sometimes in dramatic ways (civil unrest, wars, and disease), sometimes via incremental decline (involving a series of "small" steps - withholding savings from banks or critical health details from insurers for fear of penalty, giving up voting) that has the same cumulative effect.

If societies work best when people at the sharp end of power are able to civilise those who hold it, then an accountability health-check for 2007 suggests that it was a pretty uncivilised year. The period ahead promises a critical challenge: how to entrench accountability in principle and in practice as part of the common sense of the age. The stakes - from global public health to political corruption, from corporate responsibility to a new climate-change regime - are very high.

Reinventing global trade: the MFA Forum

An imaginative collaboration of stakeholders in the global south’s textile industry offers a new model for reviving the stalled world-trade talks, says Simon Zadek.

The four faces of the World Economic Forum

A blizzard of networks, deals and future plans leaves Simon Zadek seeking one more ingredient to make Davos great.
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