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GUEST ARTICLE: Building Bridges In Thinking About Impact Investing - Part 4

Benjamin Bingham, December 11, 2017


In a series of articles, a prominent US figure in the impact investing space explores how to pull together disparate ways of thinking about the world to show how this model of managing money should be addressed. Here is the fourth essay.

This is the fourth instalment from author, Benjamin Bingham, CFP, founder and CEO, 3Sisters Sustainable Management. He is the author of Making Money Matter/Impact Investing to Change the World (www.makingmoneymatterbook.com). (See the previous article here.) An article introducing Ben can be found here.

If the invention of the Gutenberg press, in the Renaissance, suddenly enabled the spread of knowledge to the elite that the world was round, the internet, in the last twenty years, has made the world “flat” for the masses. In terms of opportunity, if knowledge is power, the availability of information through the internet gives every remote individual access to power. Is this area of innovation going to improve worldwide gender-blind education, and lead to increasing jobs and ultimately to the end of poverty as we know it? Or the opposite? Investors may decide.

In diversifying an investment portfolio to include technology and communications, the social/environmental investor might first be interested, on the physical level, in whether the company is doing its best to reduce its environmental “footprint.”  This can be measured, for example, in terms of the energy required to maintain its servers, or in terms of its reduction of silicic or other waste. The second prerequisite might be that the company is sufficiently providing security on its site and not abusing users by inappropriately “mining” personal information from them or allowing hackers easy access for identity theft.

However, what may be most important in this sector is how well the company addresses the human needs for participation, creativity and ultimately for the development of individual freedom. One question facing the investor is whether the culture is maximizing its scalability, and thereby its impact, by encouraging collaboration and creativity, for example through open source design and by focusing on user friendly protocol that invites the masses, or, on the other hand, if it is designing strategies that exclude or polarize the masses, for example, through false information. More and more, the “information highway” is about the mining and distribution of data. This can benefit humanity by providing more and better information for self-education and development, or, if darkened by an agenda that is manipulative, by taking the data and using it to control, it can reduce, rather than enhance individual freedom. 

Ray Kurzweil, the current head of research at Google/Alphabet, has demonstrated in his documentary: The Singularity Is Near, his belief that humankind is on the threshold of an evolutionary shift to leave its imperfect humanness behind and “evolve” into a future race of more perfect androids. These next-gen humans will have all the information known installed in their “memories,” and will live forever with replaceable, or renewable biological parts. His book, The Age of the Spiritual Machine, describes this revolutionary idea in more detail. This is not a joke and the investor will need to consider now and in the future, how much to support or reject such developments. One way is to avoid “too big to fail” tech companies that have the means to play on this level.  This also can help reduce financial correlation with popular stocks.

IBM’s Watson, is at the forefront in the rapid development of artificial intelligence (AI) that is replacing what “scientists” might consider the subjective and limited intuitions of “mere” humans. If the input to AI is limited by an agenda (the agenda of Big Pharma, for example, as mentioned earlier in the discussion on healthcare), then it may accelerate the problem of “garbage in, garbage out.”  What is most disturbing is that once we get beyond a certain level of digital calculation we humans can no longer follow with consciousness how the results are determined. The diagnosis of any issue by AI may be limited to the predetermined array of facts input from current scientific prejudices leaving out future bearing human intuitions or wisdom from the ancients.

Since information technology is becoming more and more ubiquitous, influencing the knowledge of most of humanity, we are facing an existential precipice or threshold, that we may not be able to control. How things get done will inevitably change and much will be automated. According to a recent McKinsey Report, https://www.mckinsey.com/global-themes/future-of-organizations-and-work/what-the-future-of-work-will-mean-for-jobs-skills-and-wages  by 2030, as many as 800 million jobs could be lost worldwide to automation.  

There may be many jobs that will develop in a new innovative economy, as the internet of things (IOT), robotics, AI and Big Data take care of the drudgery and detail. Still, there should be a concern for the danger that as more and more manual workers lose their jobs, the divide between the educated and uneducated may expand to the point of angry protest and violence.  This may be the momentum that Steve Case saw as a reason to launch a fund focused on the “Rise of the Rest”: funding small town entrepreneurs to create jobs.

Innovative companies that focus on the re-education of manual workers and the encouragement of creative skills will be essential for attaining the SDG goals by 2030. The human capacity to solve problems creatively in ways that cannot be replicated by machines will be essential as we approach the solutions for ending poverty, with good jobs for both genders in a world economy that works for all.

The Sustainability Accounting Standards Board (SASB) Materiality Map™ breaks down the Technology and Communications Sector using categories SASB considers material (i.e. worth tracking) in publicly traded companies. Note, as usual, that I believe all other categories are also “material.” This is especially true in the tech space, because it is almost impossible to imagine innovations to solve any category that will not involve tech.



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