Just before Christmas, a few members of the Prosper Social Finance team attended the 2019 Ethical Finance Conference organised by the Global Ethical Finance Initiative (GEFI). The conference was spread over two days focusing on a variety of topics, from financing a green transition of the economy to changing corporate ethics. As guests of the conference, we were privileged to listen to a wide range of speakers and panellists that included Scotland’s First Minister, Nicola Sturgeon, The Archbishop of Canterbury, Dame Susan Rice and many others, all of whom gave innovative and insightful opinions on the changes that must occur within finance in order to make it a more ethical industry. With $3 trillion of assets represented in the room there was a palpable sense of the extent of change that this sort of shift could affect.
From Prosper’s perspective, it was somewhat comforting that many of our values and aspects of our investment philosophy continually came up throughout the conference. In particular, there was a call across many of the panels for greater transparency in the finance industry. Georgia Stewart, founder of Tumelo, is at the heart of this movement. She discussed how her app shows people exactly where their money is invested and in turn enables them to have impact through campaigns and voting. Many of the panels focused on the problem of ‘short-termism’ in finance, demanding that we stop thinking in quarters and begin thinking in decades.
In order to finance a green transition of our society, we must be willing to forgo immediate returns and search for greater, more sustainable profits in the long term. One panellist, Russel Napier, suggested as asset managers, we must demand for changes in the equities market that encourage investors to hold their money in companies for longer periods and act like they really do own these companies. He proposed preferential voting rights and greater dividends for longer-term shareholders of a company. In addition, one would hope this sense of ownership should force investors to engage more with companies and express the concerns or suggestions they may have. At Prosper we feel this act of stewardship is crucial, and as shareholders we believe it is our responsibility to ensure that the companies we invest in act responsibly and sustainably.
All in all, it was a hugely enlightening two days at the conference, and a real pleasure to hear from and meet so many people that believe that finance can be a force for good. We would like to thank GEFI for hosting us and for putting on what was truly a fantastic event.