If it was ever possible to pursue profit in isolation from society's broader goals, that time is not now.

How can we achieve the goals we value?

Market operators are integral to realising society's core goals, such as a sustainable environment. Their continued success also depends on it. Yet their activities often have the opposite effect.

Bridging the reality gap involves businesses identifying how they impact those goals and changing to become more aligned. 

Are market operators legally permitted to do this? A Legal Framework For Impact shows how they are. However, it also needs a change of hearts and minds across the market ecosystem – we need to look again at the stories in which we find ourselves which shape how we act, such as the observation that societies provide a licence for business.

Read More:  Value in culture, in the Starling Compendium 2022.

The Social Licence for Financial Markets

The social Licence for Financial Markets by David Rouch

Finance should have a key role in addressing humanity's pressing sustainability challenges. But how we act depends on the stories in which we find ourselves.

This book is about what Mark Carney has called ‘the social licence for financial markets’ and how engaging with it can move us towards a more sustainable future: change, not imposed by regulators, but emerging from the very substance of market relationships. The reality it reveals contrasts sharply with the usual narratives of markets as places of unrestrained financial self-interest.

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A Legal Framework For Impact

A legal Framework

Are market operators legally required or permitted to tackle humanity’s key sustainability challenges? Can they go beyond adjusting their position to protect themselves from ESG risks and tackle the root cause of the risks themselves?

This international report prepared for the United Nations Environment Programme Finance Initiative, PRI and The Generation Foundation looks across 11 legal jurisdictions, including the major finance hubs, and finds that in many respects they can. It also provides a robust framework for understanding how business activity, sustainability goals and legal duties interact, as a basis for deciding what to do.

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Recent

Does ESG really matter—and why? by Mckinsey Sustainability

Companies Need to Start Adopting Sustainability as a Legal Duty

Sustainability as a legal duty?

A fundamental reset in investor-corporate relationships is underway. Sustainability threats to economic systems are prompting a paradigm change in our understanding of how directors’ and investors’ legal duties apply. This piece, co-authored by David and published by Bloomberg, looks at how.

Reproduced with permission. Published 16 November 2023. Copyright 2023 Bloomberg Industry Group 800-372-1033. For further use please visit https://www.bloombergindustry.com/copyright-and-usage-guidelines-copyright/

Does ESG really matter—and why? by Mckinsey Sustainability

EP 10: Interview with David Rouch - Investing for Sustainability Impact - Part 2

Episode 10: Interview with David Rouch - Investing for Sustainability Impact

David Rouch talked about the report "A Legal Framework For Impact" in the last episode. He discussed the impact of the report on financial services and how the law in England and Wales is changing to support sustainable investing. He also identified the main barriers to aligning financial flows with the Paris Agreement's objectives.

David Rouch is a financial services partner at Freshfields with expertise in sustainable investing.

Resources: You can access the “Legal Framework for Impact” report, here. You can learn more about David’s work, here.

The Power of Narrative to Change Behavior

The Power of Narative to Change Behaviour

The social licence for financial markets expresses a narrative about the relationship between...

Finance and Sustainability

Finance and Sustainability

Relying on financial self-interest to engage the finance sector to address sustainability challenges...

Culture and Finance

Culture in Finance

Work to improve culture in finance firms recognises that, to change behaviour, it is necessary...

Corporate and Systemic Purpose

Corporate and Systemic Purpose

Financial markets resemble a form of ecosystem, comprised of multiple groups of individuals and...