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I’d say market turbulence was the trigger. I worked in Japan through the asset price bubble in the mid-1980s. When the stock market fell dramatically in 1990, I started to ask myself, ‘What makes markets fail?’, and to look for answers in as many places as possible. In hindsight, an MBA and an MSc in Financial Economics were never going to give me answers, but an MSc in Economic Regulation and Competition turned out to be better targeted for my question.

Acting as a global sector strategist in the midst of another market bubble helped me to better understand the tug-of-war going on between society and markets. In a stroke of luck, socially responsible investing (SRI) turned out to be a good fit with our global sector strategy, so we could respond when our clients started asking SRI questions. In April 2005, we launched the ESG team in ��ţ��������’s investment bank research department with a question: “Why Try to Quantify the Unquantifiable?”

Looking for ideas in non-obvious places is important in sustainability, and I really enjoy doing that. I ended up doing an ecotheatrical PhD – “The environment on stage: scenery or shapeshifter?” in my spare time. While I haven’t formally incorporated the term “shapeshifter” into my work in ��ţ�������� research, I do think that it describes social and environmental ecosystems, and market systems, and how they feed into each other, very well.

You co-authored the Institute white paper ‘From Ozone to Oxygen’, which focuses on threats to biodiversity and mentions a disconnect between science and policy. Can you elaborate?

Several of my co-authors felt that science-based targets (SBTs) are not being used in policy contexts as scientists intended. It’s widely recognized in science, and in markets too, that it’s impossible to make accurate predictions in terms of a single number by a certain year. But it’s better to be roughly right than precisely wrong, and if the outcome of an SBT-approach turns out to be progress in decarbonization, I think that would be a good result.

Science made it possible to frame climate change in a single number–CO₂ equivalent emissions. “Carbon emissions” or even just “carbon” has become a convenient shorthand for a complex idea. This is helpful to policy makers looking to get a message across.

Biodiversity will be harder to frame as a single target because it’s too complex as a system. It’s also not ideal for the one-shot solutions-based approaches markets tend to favor. Take forestry carbon offsets as an example. Forest conservation is excellent, but warming is increasing the number of forest fires. To coin a phrase, carbon offsets based on biodiversity assets are not a climate risk hedge. Things can go wrong despite good intentions.

Markets love solutions, and they can be effective in the right place. But

what we need for challenges such as climate change and biodiversity is a diverse portfolio of ideas. That means recognizing that listed securities markets are not always the answer.

The uniqueness and fragility of ecosystems means that economies of scale are not always possible.

Fields such as impact investing could point towards a more distributed, community-based approach.

What markets can and cannot do needs to be an active part of investment conversations.

I recently contributed to a ��ţ�������� research report called ‘The Future of Farming: Will We Grow Enough Food?’, which discusses the possibility of a structural shortage of crop supplies in the medium to long term under a 'business as usual' scenario. While we may find short term solutions to support us, a new paradigm may be needed for a resilient food system.

Often in the much-discussed circular economy, recycling is the default “solution”, but circularity is broader than that. The “human” economy needs to be regenerative across the board; recycling will only scratch the surface.

The ESG market is still trying to define itself, and problems such as greenwashing show how polarized the topic has become.

We need a more rounded approach and a new market paradigm designed to recognize biodiversity and planetary boundaries. In the medium term we’ll need a diverse portfolio of approaches, with more emphasis on impact and outcomes. In the end, resilience is what matters.

I’m currently learning to be a beekeeper. I’m a member of my local branch of the British Beekeepers Association and am helping, and learning a lot, at our training apiary. It’s been fun to discover that everyone has a bee story, and, of course, ��ţ�������� has bees on the roof of its 5 Broadgate office in London. I was astonished to discover that honeybees, powered by nectar and pollen, maintain the core of the hive at 35 degrees centigrade. They are highly intelligent “shapeshifters”. Let’s hope humans conserve the biodiversity they depend on.

The interviewee is external to ��ţ�������� and the answers provided do not necessarily reflect ��ţ��������’s view.

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