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Crisis to opportunity: policy suggestions for the inauguration of the Obama administration
Stronger governance, investor rights and a green-based economic revival.
The Obama Administration and new Democratic Congress take office at a time of extraordinary crisis but also potential opportunity. Even with U.S. and global financial markets plus entire sectors of the economy in turmoil, the elections have opened the door for fresh leadership and new policies. We now have the chance to contain the recession, shore up the financial system, and invest in a green economic renewal all at the same time. While all investors clearly have a stake in advancing each of these objectives, sustainable and responsible investors have an especially broad and timely perspective on the governance and regulatory underpinning of a sound economy. The incoming Administration and Congress will, of course, be focused first on stabilizing the markets, creating jobs, arresting the slide of the auto industry and other sectors in distress, and getting the economy back on track. Yet amidst the gloom, encouraging indications are mounting that tough lessons will be learned and applied that can strengthen the financial markets and broader economy in important ways.
Already there is a consensus that this crisis was caused in part by a combination of inadequate corporate governance (especially in the financial sector) and regulatory oversight, and that both must be strengthened in order to regain investor confidence and rebuild public trust in the markets. Moreover, there are also signs of an emerging consensus that economic recovery can be stimulated by accelerating, rather than delaying, bold steps to tackle the central sustainability challenge of our time: diminishing climate change and curbing our dependence on fossil fuels by investing in renewables. With a shrewd combination of vision and pragmatism, a “green recovery” can deliver short and long-term economic and environmental benefits alike. We have before us a rare convergence of opportunities that all are complementary: fresh, dynamic new leadership in Washington; a financial system that can be bolstered by stronger corporate governance and investor rights, and a world that should be ready to face the reality of the climate change crisis by making serious commitments and smart investments that create jobs and spur
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