The ultimate goal of economic policy is simple and timeless—to ensure prosperity and maximize living standards. Broad macroeconomic measures such as GDP growth, the unemployment rate, and inflation had for decades been a good proxy of rising prosperity, so they have dominated economic policy making and are enshrined in most central bank mandates. But even before the COVID-19 crisis, it had become clear that traditional economic measures have increasingly diverged from social outcomes. The economic expansion of the past decade was a success according to traditional measures of full employment, but it was accompanied by deteriorating social conditions across a variety of measures (inequality, health and safety, educational attainment, infrastructure quality, housing affordability, and so on). With the COVID-19 crisis, the pressures have come to a head as the worst economic downturn in decades is hitting the most vulnerable the hardest.
The COVID-19 global health and economic crisis has highlighted the need for leadership and capital to be urgently targeted towards the vulnerabilities in the global economy. The issues of sustainability have never been more important and it’s a critical time for investors to be collaborating for better corporate behaviours and economic outcomes.
According to the IMF, more than $20 trillion is needed over the next 20 years to be invested in climate change and other sustainable development goals. But countries can not achieve this on their own. Governments need to make it easier for business to finance and invest in sustainable development projects, the private sector needs to mobilise for long-term investment, and new solutions for financing the SDGs must be created.
This conference was an urgent call to action for all investors to influence investee companies to change their focus and put people before profits to create a more sustainable economy, and to wake up to the crucial role they play in ensuring a sustainable recovery.
Through case studies of investors and corporate collaboration, investors heard how their peers have been engaging for change on issues relating to the environment, labour practices and better long-term outcomes. The conference addressed the social and economic consequences of the coronavirus and outlined the role that investors can play in the path to a sustainable economy.