Quarterly capitalism: The pervasive effects of short-termism and austerity

Quarterly Capitalism

Instant gratification is usually associated with limited attention spans, temptations to eat unhealthily or the tech-enabled on-demand economy in which many of us live. Each of these behaviours has known side-effects which we have identified and tried to limit.

However, in the complex economic system which is capitalism, the problems associated with the tendency to prioritise short-term over longer-term gains has only recently started to gain traction. Part of this slow uptake is attributable to the gradual recognition of the problematic symptoms, including increased inequality, dissatisfaction towards government policies of austerity and a general distrust of corporations. The side-effects have taken time to become noticeable.

In this blog post, I’ll take a look at the consequences of short-termism, ranging from financial and economic dimensions to the social implications. The unfortunate irony is that short-term behaviours often have the longest lasting effects.

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Quarterly capitalism: The pervasive effects of short-termism and austerity

Anatomy of an “investor responsibility map”

Apple Map

Socially responsible investment (SRI) and corporate social responsibility (CSR) go hand-in-hand. Both practices have rightfully gained in prominence as investors have delved deeper into the environmental, social and governance (ESG) aspects of corporate behaviour.

However when considering an investor’s responsibilities, ownership goes beyond simply the direct exposure to the company itself. Investors are also ultimately responsible for the corporate’s supply chain practices, both directly and indirectly.

The aim of this blog post is to take a closer look at the characteristics of large investors, with a particular focus on how they interact with a company’s supply chain. This is done by introducing the concept of an “investor responsibility map” which summarises an investor’s direct and indirect exposures to a corporate’s supply chain.

To illustrate the concept, Apple’s investor base and their supply chain is used as an example, due to the company’s position as the world’s largest by market capitalisation. Interestingly, large investors such as fund managers and pension funds not only own significant stakes in Apple, they also own large portions of Apple’s suppliers. This puts these large investors in the prime position to engage and influence on ESG issues as part of their overall responsibilities.

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Anatomy of an “investor responsibility map”

Choice and effect: Review of “World Factory” and “The True Cost”

WorldFactory

Newton’s third law of motion states that “for every action, there is an equal and opposite reaction”. Two recent productions highlight how this is relevant in the world of fast fashion.

“World Factory” at London’s Young Vic theatre takes audience members on the journey of “operating” their own clothing factory in China for a year. The decisions and their implications create an eye-opening experience of how the seemingly innocuous can have far-reaching consequences.

In a similar vein, the recently released “The True Cost” film explores the way in which growing consumerism in developed countries has led to human suffering and environmental destruction, particularly in developing countries.

The productions raise uncomfortable and morally challenging questions. How can the actions of those in of us in developed countries be changed to prevent damaging reactions elsewhere in global supply chains?

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Choice and effect: Review of “World Factory” and “The True Cost”

Cheap labour + government aid = corporate profits?

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Recently published reports in the UK and US highlight how low wage employers are being subsidised by the social welfare system in what is effectively a transfer from taxpayers to shareholders. While this link is clear within developed countries, it is possible to argue that a similar, albeit less direct, effect is also occuring in developing countries.

This blog post will explore whether corporates headquartered in the developed countries effectively receive similar subsidies as a result of paying low wages in developing countries. Is foreign aid actually funding corporate profits?

Continue reading “Cheap labour + government aid = corporate profits?”

Cheap labour + government aid = corporate profits?

Spot the difference: Nestle’s confusing cocoa plan

Kit Kat

On a recent trip to Germany, I was surprised to notice that the Fairtrade mark was missing from a Kit Kat chocolate bar I saw in the supermarket. So I picked up the bar to take a closer look and realised that I unfortunately, I wasn’t mistaken – Kit Kat is not Fairtrade certified in Germany in contrast to the variety sold in the UK. It seems that not all Kit Kats are created equal.

So I decided to take a closer look at how Nestle, the producer of Kit Kat in the UK and Germany (and many other European countries), approaches the matter of using cocoa sourced on fair and sustainable terms. Unfortunately, I’m still a little confused. Consistency and transparency are required in order to provide confidence for consumers.

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Spot the difference: Nestle’s confusing cocoa plan

Another Nike moment for Apple?

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BBC Panorama raises some salient questions regarding Apple’s production practices in developing countries. There are significant implications for consumers and investors in developed countries. What is the role of the Fairtrade Foundation and Fairphone?  Are you indirectly investing in Apple via the UK’s National Employment Savings Trust, the BBC’s pension fund or a myriad of other pension funds?

Continue reading “Another Nike moment for Apple?”

Another Nike moment for Apple?