Looking to 2021- Michael Bloomberg Advises: What President Biden Should Do

December 31, 2020

by Hank Boerner – Chair & Chief Strategist – G&A Institute

This is my last post of 2020 – indeed, a chaotic, challenging and tumultuous year for corporate managers and investment professionals.  And the rest of us!

At this time last year we were looking forward to continued peace and economic growth. That new virus spreading infection inside China was a blip on the horizon for many people. 

Most of us did not foresee the rapid spread of this dangerous virus to all corners of the globe, and the resulting tragedy of the immensity of deaths, as many families lost loved ones,  We were not adequately prepared for the resulting economic upheaval posing serious challenges to leaders in the private sector, public sector and capital markets.  At year end we are still working our way through the mess. 

And so we come the start of a new calendar year — 2021! — with all of humanity wishing for better days! 

Many eyes are on the United States of America, the world’s largest economy, which will soon have new leadership in the White House and the important arms of the federal government, the cabinets. Those are State, Treasury, Defense, Interior, Energy, Labor, Commerce, and other departments as well as in key agencies such as the Securities & Exchange Commission, and the Environmental Protection Agency (US EPA).

The better days could start on January 20th when a new President and Vice President are sworn in and a new Congress will already be in office (the 117th Congress will convene on January 5th with 100 Senators and 435 Members of the House of Representatives). 

And there is much work for all of those leaders to do!  There are especially high expectations of soon-to-be President Joe Biden and Vice President Kamala Harris…and the men and women they will appoint or nominate (for U.S. Senate confirmation) to help in leading the USA forward, working in cabinet offices or federal agencies. .

President Biden has said that his will be the “climate change administration” and that meeting the challenges posed by climate change is a top priority.

What should / can be done as these leaders settle into the office?

Mayor Michael Bloomberg, head of the Bloomberg LP organization — he with the loudest megaphone to reach and influence capital markets players, government leaders, NGOs, climate activists, multilateral organizations leaders, and many more leaders and influentials — has some specific suggestions for the Biden-Harris team as they assume office.

Here are some of the highlights of Mayor Mike’s suggestions:

  • “Biden Needs to Lead on Climate Reporting” (the headline of the editorial with the suggestions – there’s a link below).
  • Biden’s pledge to rejoin the Paris Agreement should be carried out and this will send a strong signal to the world. But that will take us back four years (when Secretary of State John Kerry led the US delegation in joining the agreement).
  • To move forward President Biden on his first day in the Oval Office should begin the effort to bring together the leaders of the G-20 nations (the world’s leading economies*)  to endorse a mandatory standard for global businesses to measure and then report on risks all nations face from climate change.

There are mechanisms and players in place to help make rapid progress.

Remember that Michael Bloomberg heads the TCFD – the Task Force on Climate-related Financial Disclosures — which was formed by the Financial Stability Board (FSB) —  the board a creation of the G20 nations after the disaster of the 2008 financial crisis. 

The concept of the FSB is to serve as a sounding board and think tank for the leading economies of the world to address among critical issues risks to the financial system. 

This is the organization’s official description: “The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system.  The FSB promotes international financial stability; it does so by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies. FSB fosters a level playing field by encouraging coherent implementation of these policies across sectors and jurisdictions.”

This means that the FSB, working through its member organizations, seeks to strengthen financial systems and increase the stability of international financial markets. The policies developed in the pursuit of this agenda are then implemented by jurisdictions and national authorities.  

Members include the US Department of the Treasury, the Federal Reserve System, and the Securities & Exchange Commission.  

The TCFD is a creation of these and other members. 

The TCFD issued recommendations for companies to measure, manage and report on risks and opportunities related to climate change — which Mayor Bloomberg sees as key driver in directing capital to companies with smarter, more responsible leadership that protect and company and seize opportunities related to climate change.

The TCFD guidelines have been adopted or endorsed by 1,000-plus companies and organizations in 80 countries on six continents, Michael Bloomberg pointed out in his editorial.  Sovereign members of the G20 are among the endorsers — Japan, Canada, France, New Zealand, the United Kingdom. 

And so the United States of America — the world’s largest economy — could serve as the catalyst, the unifier, the key player in the drive for adoption of global standards under Biden-Harris leadership. 

This would serve to bring a coordinated effort to deal with the challenges posed by climate change on a global basis, help to develop the right regulations for the world’s family of nations to develop uniform, comparable regulations for climate change disclosure and reporting, and remove uncertainty for corporate leaders and their providers of capital. 

Michael Bloomberg, whose own company’s widely-used platform (“the Bloomberg”) carries volumes of ESG data, tapping his own knowledge of ESG data, advises us that such data must be useful, comparable, and not be confusing (as is frequently now the case). 

Even with the increasing flow of ESG data, the world’s financial markets, Michael Bloomberg points out, operate in the dark today in terms of climate change – which he sees as the biggest risk to the global economy.

Michael Bloomberg is urging the Biden-Harris team to take action “…to help to develop a single global disclosure framework for climate risks that helps drive a faster and more effective response to climate change”.

Or else we will continue “with competing frameworks that make it harder for investors and businesses to identify risks, leading to more economic harm and lower progress”.

Mayor Bloomberg’s summing up his views:  “Climate disclosure is not flashy but it’s one of the important tools we have to speed progress on prevent climate change and economic hardship…which could dwarf the effects of the financial crisis.  The faster we make [disclosure] standard practice globally, the safer and stronger the economy will be.  The US can help lead the way.”

There’s the complete editorial and more perspectives shared at bloomberg.com/opinion.

And so we end 2020 (farewell!) and begin a new year, filled for many people with great hope and promise for better days.  Stay Tuned!  And best wishes to you for the new year.  

#  #  #

P.S. Michael Bloomberg was also the Chair of the Sustainable Accounting Standards Board (SASB) Foundation, 2014-2018 and remains supportive of the organization.

You can follow Michael Bloomberg on his web site:  https://www.mikebloomberg.com/

*  The G20 nations are the USA, UK, Germany, France Italy, Japan, Canada (these are the G7); Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey.  Plus “guests” – Spain; two African countries; the International Monetary Fund; World Bank; United Nations; the World Trade Organization; the Financial Stability Board (all attend G20 summits).  

To understand the influence of the Financial Stability Board, here are the members: https://www.fsb.org/about/organisation-and-governance/members-of-the-financial-stability-board/

The members of the Task Force (TCFD) and other information: https://www.fsb-tcfd.org/about/

Moving The World Forward Toward a More Sustainable Future: The Member Nations of the United Nations, Working Collaboratively For Progress in the 21st Century

by Hank Boerner – Chair & Chief Strategist – G&A Institute

“The United Nations” began as a World War II-era strategy as President Franklin D. Roosevelt talked about the allies of the United States of America partnering in the fight to save democracy and collectively battling the regimes of fascist dictators in Europe and Asia.

On January 1, 1942, 26 nations “united” in Washington DC to coordinate the battle with the “Axis” powers.  (“Axis” – the axis line, said President Roosevelt, ran from Berlin (Germany) through Rome (Italy) and to Tokyo (Japan) – the clear linkage in his mind of the fascist leadership.)

In February 1942 the president addressed the nation in his 20th “fireside chat” (broadcasting nationwide on “the radio”) to talk about the progress of the war.

The U.S. was coming from far behind in terms of preparedness for a global battle, and so an important part of the progress in this, the start of the first year of U.S. involvement in the global conflict, President Roosevelt explained to the nation of 125 million souls:

“The United Nations constitutes an association of independent peoples of equal dignity and equal importance. The United Nations are dedicated to a common cause. We share equally and with equal zeal the anguish and the awful sacrifices of war. In the partnership of our common enterprise, we must share in a unified plan in which all of us must play our several parts, each of us being equally indispensable and dependent one on the other.

“We have unified command and cooperation and comradeship. We of the United Nations are agreed on certain broad principles in the kind of peace we seek. The Atlantic Charter applies not only to the parts of the world that border the Atlantic [Ocean)] but to the whole world; disarmament of aggressors, self-determination of nations and peoples, and the four freedoms – freedom of speech, freedom of religion, freedom from want, and freedom from fear.”

The leader of the free world of that era envisioned an global organization that could bring about a new world ordering, to assure greater peace and prosperity to many peoples of the world.  President Franklin Roosevelt passed away in April 1945; soon the global conflict ended; and then what he long envisioned became the possible:

On October 24, 1945, 50 nations gathered in San Francisco to sign on to the “United Nations Conference on International Organizations” – and the UN as we know it today was launched.  (We celebrate UN Day on 24 October in commemoration of that historic event.)

Today the UN has 193 members – sovereign states that have equal representation in the UN General Assembly. The UN is the world’s largest intergovernmental organization – a forum for governments, not a world government.  And within the organization are important initiatives that have been shaping corporate responsibility, corporate citizenship, sustainability, and for capital markets, as well as for sustainable investing.  These are agencies, programs, institutes, global collaborations, and other entities.

You know some of them as the UN Principles for Responsible Investing (PRI); the UN Global Compact (UNGC); the UN Sustainable Development Goals (SDGs); the work of the UN Environmental Programme (UNEP).

Today we are hearing quite a bit in the corporate sector and in the capital markets about the Universal Declaration of Human Rights (adopted 1948); the UN has been the driving force behind 80-plus “human rights laws”.  Consider:  the declaration has been translated into 380 languages to date, says the UN High Commissioner for Human Rights..

We are sharing with you three recent highlights from the UN universe.   First, an update from the UNGC CEO Lisa Kingo, stressing that now is the time for society to invest in the 1.5C future…”there never has been a time”, she points out, “like today for coming together and jumpstarting a worldwide transformation towards a more inclusive and sustainable net-zero economy.”

Also from the UNGC, news of the launch of the Ocean Stewardship 2030 Report – to be a roadmap for how ocean-related industries and policymakers can jointly secure a healthy and productive ocean by 2030.

We are now in the Decade of Action on the Global Goals (the SDGs). The UNGC is an initiative of the UN Secretary General, a call to companies everywhere to align their operations and strategies with 10 universal principles focused on human rights, labor, environment and anti-corruption.

The Global Reporting Initiative (GRI) is today an independent global foundation that was birthed by the United Nations, building on the principles advanced for corporate responsibility by the NGO Ceres (based in Boston). An organization known for a philosophy of “constant improvement”, GRI recently organized an Agriculture and Fishing Project Working Group that will lead the work to create a new sustainability standard for ag & fishing.

This is part of the work of GRI’s New Sector Program – a multi-stakeholder group will move forward the initiative to help companies with ag and fishing in their value chains promote transparency and accountability, and better understand their role in sustainable development.

It’s almost 80 years now since President Franklin Delano Roosevelt – one of the most progressive leaders in U.S. history – conceived of the “united nations”, as a necessity to bring together the resources of other nations to fight a war on all of the continents, whose outcome was then uncertain.  And then to assure the peace and work to end wars, or at least settle disputes peacefully.

In November 2010 Secretary General Ban Ki-Moon noted:  “Sadly, FDR never saw the fruits of his efforts.  He died weeks before the founding conference. Yet his vision lives on in the UN Charter’s collective commitment to peace and security, economic and social welfare, tolerance and fundamental human rights.  Franklin Roosevelt’s Four Freedoms. This legacy of multilateral cooperation guides us today…”

Well said!

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OOPS
In the June 8th issue of our newsletter (Highlights), with headline “Will We Ever See SEC Rules/Guidance for Corporate ESG Disclosure and Reporting?  The Question Hangs in the Wind..”  We incorrectly identified the corporate reporting regulations being reviewed by the Securities & Exchange Commission – should have said “Reg S-K” (not Reg F-D).  Sorry for the any confusion caused.  A more complete commentary on all of this is here on our blog.