Sustainable Finance

Kofi Annan, former Secretary General of the UN, is the father of ESG. Most investors are unaware that Kofi Annan’s idealism has created a paradoxical scenario for all corporations. In 2004, he wrote to over 50 CEOs of major financial institutions, inviting them to participate in a joint initiative under the auspices of the UN Global Compact and with the support of the International Finance Corporation (IFC) and the Swiss Government. The initiative aimed to find ways to integrate ESG into capital markets, and the 50 CEOs enthusiastically wrote back and agreed. Heck, after all, it was Kofi Annan writing to them. The ESG models became part of the UN’s 17 points on Sustainable Development. [2]

ESG is a poorly formulated concept. According to the UN “there are over 600 ways to assess corporate ESG activity, but there are no globally accepted standardised corporate disclosure requirements.” [3] In all aspects, ESG has devolved into an opinion market of inchoate wants, ideals, and signaling.…

Affordable and abundant energy is the basis for every modern economy. Full electrification is a necessary condition for a thriving economy [5] to achieve prosperity and a stable currency (although as the example of Argentina [6] demonstrates, it is not by itself a sufficient basis). It is a remarkable fact that several hundred million people in sub-Saharan Africa continue to live without regular access to electricity [7], despite the fact that global renewable electricity equipment supply chains could readily be ramped up to provide the necessary equipment. In engineering terms, if financial and regulatory risks and constraints could be swept aside, globally ubiquitous low-cost clean energy superabundance [8] could be within reach.

We are not on track to meet either SDG7 [9] (access to affordable clean, modern energy for everyone) or SDG13 [10] (climate stabilization). Climate stability is a global commons good [11] that cannot be achieved without shifting developing countries to non-…