Imfino News

June 15, 2020 - The corona crisis points to substantial shortcomings in our current economic and social system. That is the reason why Triodos Bank calls for an overhaul, a reset of our economy. In its vision paper, titled Reset the economy, Triodos Bank lays out a concrete policy, business, and finance agenda to prevent a future pandemic from holding the world in such a grip as corona has, to intensify our efforts to combat the climate emergency and other eco-crises, and to work on a more socially inclusive society.

Redefine, revalue and redesign

The corona crisis demonstrates a fundamental lack of resilience: in our ecological, social and economic system. According to Triodos Bank, we need to redefine what matters most; revalue the way we live, cooperate and communicate; and redesign our economy.

Head of investment analysis and economics at Triodos Investment Management Hans Stegeman, who co-authored the report with Triodos Bank Chief Economist Kees Vendrik “Right now is the moment to discuss the system that we want to create, and what needs to improve. It is not that we think this is easy, or even that people will suddenly change. But now, trillions of dollars are used to rescue the old economy, including companies that add to carbon emissions, pollution and social harm. We think that is not what we should do. Instead, we should be investing those trillions in an economy that is fit for the future: one that is more resilient, more sustainable and more inclusive. Now is the time for a transition.”

Kees Vendrik: “Instead of economic growth, the central values upon which government policy rests and business investment decisions are judged should be people, planet and prosperity. Economic growth must make way for wellbeing, risk and return metrics should be enriched with impact and companies should report on it.

We also need to revalue how governments and markets interact. Public policies can make a difference. That is true in this crisis and will be for any transition towards a more sustainable and inclusive economy. Lastly, we have to redesign our economic system and make it more resilient, with higher financial buffers, diverse sourcing and more local and circular production chains.”

Triodos Bank proposes a broad agenda with concrete measures by governments, businesses and communities.

Private money

Triodos Bank argues that private capital will become more and more important as fuel for the recovery. Public funds have been used extensively to cover the first blow of the crisis. Building a resilient, inclusive society will ultimately depend to a larger extent on private capital.

It matters a lot how money will be allocated, preferably via more sustainable equity and gift money. We argue now all finance should be focused on the green and just transition: it’s important all financial institutions increase their efforts in this area.

The role of Triodos Bank

Since 1980, Triodos Bank has been in business to help create a society that protects and promotes the quality of life of all its members, and that has human dignity at its core. For Triodos Bank the current crisis and the transition to a resilient and inclusive society mean it will target its capital and instruments even more precisely in favour of those that are leading the transitions to a more sustainable and inclusive economy. Triodos Bank has already published two vision documents on food and agriculture and energy and climate with a specific agenda for those topics.