Search

Family Offices should be in the frontline to fight climate post COVID19.

Over the past week, mother nature took some deep breaths of non polluted air, as COVID19 restricts humans to exit their homes. Should this be a wake up call to face climate change?


Society has moved far more aggressively to address the coronavirus than it has the climate crisis. But some experts wonder if the unprecedented global mobilization to slow the pandemic might help pave the way for more dramatic climate action.


In today’s world, wealth means power. The rich have a moral obligation to do so even more than the poor who are currently struggling to survive in the face of climate change. So what can family offices, holding the economic and the political power, do? Below are some well-discussed but not yet adopted measures that family offices can effectively embrace.


First, there is evidence stating that the richest (1%) of the population emit 175 times more carbon than the poorest #4 (10% bottom). Family offices can take more active steps to reduce the carbon footprint generated from their larger businesses. 


Second, family offices have political influence on governments and regulators to push for structural changes such as stricter policies on carbon pollution, water usage and heavier fines for water-polluting companies. 


Third, family offices can exert direct pressure on companies to disclose climate risk assessments as well as policies and strategies to reach these goals. Similarly they can discuss these criteria with their client advisors in managing their wealth consciously and respectfully. 


Fourth, family offices can actively divest from companies that refuse to take actions against climate risk and make these decisions public. Currently, there are 59,524 wealthy individual #5, 1101 organizations with a combined wealth of $8.8 trillion that has divested from companies with controversial activities.


Fifth, family offices can themselves fund, support with donations or simply invest in climate solutions. Many of these solutions are new, expensive to build and need patient capital in tackling climate-related problems.


Sixth, they can raise awareness and instill change in other family offices. Many family businesses do address these issues within their existing investment framework, but as the time is pressing, we need leaders and a more aggressive stance on it. 


To conclude, climate risk is an existential threat to our society. Most importantly, given the economic footprint of family offices in the Asia region, it is their moral duty to use their political power and play a significantly active role in tackling climate change. 


#familyoffice #climatechange #privatewealth



100 views

©2020 by Ayton Family Trust - Blogging, News