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Values-based Capitalism: What is the Aussie Treasurer planning? w/ John Humphreys – EP175

Australian Treasurer Jim Chalmers argues for values-based capitalism and against neoliberalism in a January 2023 essay in the Australian Monthly magazine. In this episode, show host Gene Tunny discusses the Treasurer’s essay with Dr John Humphreys. John is the Australian Taxpayers’ Alliance (ATA) Chief Economist and the founder of the Australian Liberal Democrats. Gene and John discuss just how literally we should take the Treasurer, the risks of the so-called co-investment approach, and whether the Treasurer is arguing for socialism (or a different -ism).      

This episode features audio from an ATA Econ Chat livestream broadcast on 31 January 23. You can watch the whole thing here:

https://www.facebook.com/AusTaxpayers/videos/509950911277607

You can follow the ATA on various platforms including Facebook and YouTube.

You can follow John Humphreys on Twitter.

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored

You can listen to the episode via the embedded player below or via podcasting apps including Google PodcastsApple PodcastsSpotify, and Stitcher.

What’s covered in EP175

  • Jim Chalmers’ idea of co-investing with the private sector [4:21]
  • Regarding superannuation funds increasingly having social goals that they aim to meet as well as financial goals [9:12]
  • The Australian stage 3 tax cuts and values-based capitalism: are they compatible?  [12:37]
  • ESG, stakeholder capitalism, and socialism [15:24]
  • How does the Treasurer intend to direct investment? [23:28]
  • How a poor government policy can lead to another poor government policy [27:31]
  • The social impact investment bank expected in the 2023 Australian budget [32:34]

Links relevant to the conversation

Jim Chalmers’ essay Capitalism after the Crises

Clean Energy Finance Corporation Financial Outcomes 2021-22

Australian Government principles for social impact investing | Treasury.gov.au

Impact Investing Won’t Save Capitalism  

Transcript: Values-based Capitalism: What is the Aussie Treasurer planning? w/ John Humphreys – EP175

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:06

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode, please check out the show notes for relevant information. Now on to the show. Thanks for tuning into the show. In this episode, I discuss so-called values based capitalism with John Humphreys. John is chief economist of the Australian taxpayers Alliance, and he’s President of the Australian Liberal Democrats. The idea of values based capitalism has been injected into the Australian policy debate by the Australian treasurer of Jim Chalmers. In a monthly magazine essay, the Treasurer argues we need greater coordination between the public and private sectors, and we need co investment. He argues that government business philanthropic and investor interests and objectives are increasingly aligned and intertwined. The Treasurer is the top economic official in Australia. He’s the equivalent of the US Treasury secretary in the UK Chancellor of the Exchequer. So obviously people pay attention when he tells us what he thinks. The audio of my conversation with John Humphreys is taken from a live stream I did with him on the 31st of January 2023. I’ll put a link to the full live stream in the show notes. Okay, let’s get into the episode. Please stick around to the end, because I have additional thoughts after my conversation with John. Well, I think we have to chat about this essay by the treasurer Jim Chalmers capitalism, after the crises, rather extraordinary for the treasurer to publish something like this. I mean, although we had the former PM, Kevin Rudd, publish something similar about how he was going to save global capitalism in I think it was around February 2009. While we’re all busy in Treasury, with actually managing the budget and all of that, somehow, the pm found time to write a 8000 word essay. And now, I mean, Jim Chalmers is done. Well, I think is 6000. It may not be as long as the one Rudd wrote. And Jim Chalmers wants to remake Australian capitalism. I don’t know if he necessarily wants to remake global capitalism. But he does have a critique of neoliberalism. So that’s the new thing that everyone hates. And I mean, it’s similar to a lot of critiques of so called neoliberalism that, you know, we we’ve gone too far in the direction of the market, and we don’t care about society as much anymore and isn’t as all dreadful. And isn’t all this inequality, terrible. It’s causing problems for Democracy Now look, okay. There’s certainly issues and in some countries, inequality has certainly increased, there’s no doubt about that. Overall, it’s this very simplistic analysis. And look, it’s Jim Chalmers is views. I mean, you know, fine. That’s his philosophy, it’s probably what you’d expect from Jim chamas. He’s entitled to those views. I mean, my personal view is you should be looking at specific policies. I mean, what exactly do you think we did wrong? Okay, let’s look at specific issues and see how we can fix those up. I mean, is it tariff cuts? You don’t approve of them in tariff cuts that the whole Keating government supported? I mean, what is it precisely that you think is the problem? So there’s this general critique of neoliberalism, which is no different from a lot of stuff you see online by various progressives? And, look, I mean, I’m not necessarily going to defend everything that that’s been done in economic reform. I mean, there certainly been like, I think there have been some great successes. But there have also been areas where the insert less than stellar results. There’s no doubt about that. But I think what’s important is to get it all. Okay, let’s understand what he actually wants to do because he’s got this general critique, okay. But what do you want to do? And his main idea seems to be this idea of co-investment. That’s the real substantive thing. That seems to be how he’s going to define his time as treasurer or his time as PM if he later becomes PM, because in a way, this is job application for PM he wants to be Labour leader. He sees this as defining his philosophy as a labour treasurer. We’re going to fix capitalism. He talks about values based capitalism, he thinks capitalism, we want to move away from a system where it relies upon people beings If interested in greedy and the private sector alone, we want to have a cooperation between the private sector and the public sector. We want the public sector, getting the policy settings right and and then co-investing with the private sector to provide some, some ideas about how that will occur. He talks about the Clean Energy Finance Corporation, which is designed to provide finance for various renewable energy projects. He sees that as a success, even though it doesn’t appear to be meeting its investment mandate. So I had a look at that, because I found it interesting that that was his one, the example that he gave, so he talks about co-investment as a powerful tool at our disposal. The Clean Energy Finance Corporation has been a great success, partnering with investors to direct capital where it can have the greatest impact, not by subsidising returns, but by helping structure investment vehicles in a rapidly emerging economic sector, we will employ this co-investment model in more areas of the economy, with programmes already underway in the industry, housing and electricity sectors. Okay. So they’re looking at providing some type of framework, having these entities like the Clean Energy Finance Corporation, and I think they’ve set one up similar to that in housing, it’s to encourage investment by the private sector and by I guess, providing more accessible finance, or making creating financial products, perhaps with some government guarantee, I don’t know, we have to wait and see what exactly the treasurer is, is talking about here. So yeah, that’s where I think we’ve really got to focus. This seems to be his idea of how he’s going to be this innovative, new wave labour treasurer. Yeah, Nick’s made a good point here in the comments that they want the super funds to, to invest in some of these areas such as housing, or an infrastructure. But again, I mean, we’ve got to ask exactly how are they going to do that? There’s, what I see is the risk that the government provides some sort of guarantee or does provide financing, he’s saying it’s not subsidised. But, I mean, you’ve got to wonder about if it isn’t subsidised? Or if if the government’s not making finance more readily available in the market within the banks would then what exactly is the market failure they’re addressing? Why wouldn’t the private sector do it? So I think there is going to be some sort of subsidy or, or risk taken on by the public sector that’s not compensated for. And so when I looked at the Clean Energy Finance Corporation webpage on financial outcomes, I discovered that and this is what this is a an institution that the treasurer claims has been a great success is its return its lifetime annualised portfolio benchmark. Return. So this is, this is a return that they’ve earned. So 4.38%, which is, you know, hardly anything, really, if you think about what you’d really want to be earning as an investment vehicle like that. So I think there is a risk that this sort of thing is subsidised. I think there’s a risk that they’re taking too much risk onto the government balance sheet. And there’s a potential to fund projects, which are uneconomic. So if that’s the big idea, I mean, okay, well, let’s see the specifics, and let’s analyse exactly what you’re, you’re recommending, and we can talk about that. Yeah. And there’s that point about, yeah, they do want access to the super funds, money, they will have to make sure that it’s a compelling investment opportunity to actually get that money. And, and that is a big risk. I mean, we don’t yeah, that those super funds, if they just invest in something because the government wants them to invest in it, then they are breaching their fiduciary duties. That would be a terrible thing if the government does direct where that money should go.

John Humphreys  09:12

Interesting points on that today. I think this is part of the problem that we’re sneaking up on the situation several ways. Super funds increasingly have social goals that they need to meet, as well as financial goals. You make a good point that, well, that needs to show that they’re going to meet the financial needs of the super investors. Increasingly, the super funds feel the need to meet their social KPIs, rather than their financial KPIs. And if they are required to meet social KPIs, then they’ll very easily get away with it. Remember, it’s not like this super is optional. We’re forced to give it and if the government gives the super funds who have guaranteed access to our money, social KPIs, you must do something social. By the way, here’s something social we want you to do. You can imagine it happening, even if it doesn’t have financial risk. I think the point Nick can correct me if I have not expressed her concern accurately, please jump into the chat again, Nick. But that’s my understanding of your point.

Gene Tunny  10:09

Yeah. So the whole thing with this values based capitalism, one of the concerns is that you end up with this very odd relationship between the government and banks and super funds. And in a way, it’s very odd for a Labour leader or an aspiring Labour leader. And this is a point that Matt Canavan made that he was very critical, as you probably would expect of this sort of thing. And I mean, he was saying that the treasurer seems to have been spending too much time in the boardrooms of banks and super funds. So yes, it’s, it’s very strange, but what I think might be going on, and this is, this is one thing that I’m wondering is, is this because he really doesn’t have many other options due to the state of the budget due to the high amount of debt, and due to the fact that he’s committed to the stage three tax cuts? Katherine Catherine Murphy on the Guardian podcast asked him, Okay, if you’re talking about values based capitalism, does this mean or she, she was basically asking me if you actually, given what you’re professing about values based capitalism and your concerns about inequality, etc? Does this mean you’d revisit those stage three tax cuts? And other there was a good question, and he just gave the standard line? I look, we’ve already dealt with that. And we’re, you know, my position on that. I think she probably could have pressed him more on that because it is a legitimate question, if in terms of traditional Labour government, some people have been saying that with this essay, Jim Chalmers is channelling Whitlam or it’s going back to the Whitlam government, I’m not entirely sure about that, because the Whitlam government was big spending on social welfare programmes, I really ramped that up. I mean, I know now we are spending more on that sort of thing. But there’s, I don’t know if there’s a capacity for this government, given the fiscal situation to really increase those welfare payments, or expand the welfare state much at all. And so he’s really falling back on this sort of thing, because he may not have any other option. And to an extent, that’s because the government’s had to go along with the stage three tax cuts for political reasons to win the last election. And now they can’t go back on it. So you know, this could be the only shot he’s got in the locker, so to speak. That’s one thought I’ve had on this, this essay.

John Humphreys  12:47

It will be interesting to see what they do in the next budget in terms of tax, I suspect, I’ll sneak that tax rate up, they are going into that. Look, I think that was politically hamstrung with their previous commitments. And quite frankly, I think they made the right decision to stick to their promise, both because I’m a big advocate of the stage three tax cuts, but also politically, if you want to keep any political capital, you can’t just line up lie after lie after lie in your first year in power. So I think it was the right political move and the right economic move. I suspect they also know it’s the right political move. They think it’s the wrong economic move, but they’re stuck with it. And so I’m happy about that. You’re not just a couple of quantifications. I haven’t thought about this article as long as you have, but I think you’ll write in one very important point. There’s been a lot of furor about the words. And I think the words of what Jim says, if taken literally, we shouldn’t be worried if they can, literally. But you pointed out, I think that it’s not necessarily true that we should take it literally, because there’s a lot of fluff and waffle in the middle there, that could be interpreted multiple ways. And to a large degree, what we have to do is go back to them and say, what does that mean, exactly? Exactly what I’m suggesting here. And I suspect what’s happening is there’s two things it’s worth responding to both. I suspect he’s the policy recommendations coming out of this, I suspect will end up being tinkering. I don’t think it’d be good tinkering. But this is probably a lot of grandiose statements. I’m not sure if they’re going to follow through on grandiose actions. I gotta say, as I say that, if I’m right, that would be a good thing. Because if they followed through on all the grandiose statements, I think it would be a supreme mistake for the future evolution of our country. So I am hopeful that this is a lot of bluff and bluster. But also if history is anything to go by, politicians are often full of bluff and bluster and grandiose statements. And then once they actually sit down and work out, what does this mean? It can be a tweak here and tweak there.

Gene Tunny  14:46

Okay, we’ll take a short break here for a word from our sponsor.

Female speaker  14:51

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Gene Tunny  15:21

Now back to the show.

John Humphreys  15:24

I do worry about them targeting the super funds, I do worry about what they when they say race, it just sort of interaction cooperation between the government in the corporate sector, that could be done in several different ways. Some of them supremely damaging, and some of them rather mild. And some of them perhaps useful, we really need to know the details first, but I worry that what he’s talking about is not the mild version. But hopefully what he does is the mild version. But what he’s talking about here has echoes of a lot of things that have been growing over the last couple of decades. Some people have actually said it in the chat and see if I can find some here. I think Percy said this twice. It’s the ESG goals. A lot of the language here is also the language of ESG, the environment, the social and governance systems. And it’s steadily in being embedded through several different means fair and foul into the goals of a lot of companies sometimes basically being shoehorned in there by governments, sometimes by industry super funds, which as was also pointed out by Percy, I think, that they are closely related to the union’s so you are getting lots of deviations from normal capitalism for ESG. Another term that’s been thrown around a lot by people that are it looks like Jim Chalmers is influenced by the stakeholder capitalism, and stakeholder capitalism, it sounds so benign, but if you scratch the surface, it’s a very worrying idea. The whole point of capitalism is that corporations are supposed to represent the owners and benefit the owner, it is capitalist who make a profit and the profit goes to the people who made the investment. That’s the idea. Stakeholder capitalism basically means all you know that ownership thing we told you about, yeah, not so much. Right? I mean, you don’t have to be an owner to have a stake, you could be a consumer, or a worker, or a neighbour or just anyone with a pet dog that ran across someone’s front yard. And that basically means society, if society is the owner, where that’s not a real thing, right? That’s always code word for government. If society is the owner of the business, i.e. government is the owner of the business. That does not, that system and economics does not have a good track record at work. There’s a couple of things here. The Chalmers thing has been likened to out and out socialism. I don’t think that’s quite right, because what he’s talking about is this incestuous relationship with big business and big government and big unions. And now socialism, just what’s the leaders of big business up against the wall, shoots them and takes their property. This is like traditional socialism. It’s been likened a bit to Whitlam. And you already mentioned that before, but it’s not quite that either. Because what Whitlam wanted to do was have the government take over all of the realms of how you help the massive welfare state, massive redistributions. He’s not really talking about changing the welfare state. He’s talking about changing the way business operates. So it’s not quite socialist. It’s not quite Whitlamisk, what I call it an eco socialism. It’s instead, this incestuous mix of big government, big corporations, big unions, and we need another word for that. There was a word for that this is not a new idea. This is the thing I’m seeing showing up by some of the op ed writers look at this wonderful new idea. It’s not Whitlam. It’s not Marx, it’s a new idea. It’s actually not a new idea. These ideas have been around for quite a while they were quite prominent, about 100 years ago. I believe, Jim Chalmers is the follower of an Italian economist at the moment. These ideas were very popular amongst a certain Italian politician. From about 90 years ago, if anyone knows their Italian history, El Deus, the Mussolini ideas were basically exactly this. But we don’t need to get rid of business. What we do is we need to have a really close relationship between big government, big business, big unions, we all work together. It may be better than for more efficient for socialism, but it’s a bloody dangerous system. And of course, if you actually call it fascism, everyone gets upset because they say no, no, no, Jim Thomas doesn’t hate the Jews. But fascism isn’t only the economic system of fascism isn’t just about being a Nazi. The economic system of fascism was quite literally the idea that big business can exist, but they just have to cooperate in bed with big government. That was literally the idea of the fascist model of the economy. And it’s not a new idea. I don’t think it has a good track record is actually working as an economic idea. And I’m not trying to say Jim Chalmers is a fascist, I’m just simply saying that we can look at how this has worked in the past. And I don’t think it’s been pretty. The other thing to note about this is they talk a big game about how much they want to cooperate with big business and integrate with them. It’s as if they that they’re unable to draw a distinction between the markets and a business. Right. I mean, most people on my side of politics we believe that a market is a better way of cool donating things, then bureaucrats and politicians. That’s true. That’s not from a love affair with business. Indeed, business are often also the enemy of markets. Like I am not pro business, I am pro markets and markets happen to have business in them. And it seems when a lefty stumbles across this idea and sees markets working, they think markets work, because there’s a couple of nice businesses. So they Co Op those businesses. But it’s not the existence of those businesses that make the market work. It’s the nature of the dynamic nature and the competitive nature of the market. That helps the market system to work. And sometimes a good market needs businesses to fail. If businesses make enough bad decisions, they fail this idea that markets defending markets are about defending businesses. Some people on outside of politics need to get out of that way of thinking, bad businesses should fail. We’re not here to defend businesses, I’m happy to defend people who make good decisions and get ahead and are rewarded for that, whether they are in any field of Endeavour. But it’s not just about defending businesses. And this approach the Chalmers has seems to be pro business anti markets, whereas I am pro market and indifferent to any individual business. And that’s some of the things I do notice in some of his language. He talks about redesigning markets, and that markets need to be carefully constructed. So I think once again, that shows a fundamental misunderstanding of what we mean with markets. Markets are evolutionary concepts. They’re not design. They’re not constructed at all. They happen sort of spontaneously out of the interaction of a bunch of voluntary interactions between consenting adults, it is a it is an evolved system. And one of the most dangerous things we have is these politicians that lack the humility to realise that they can’t design such a complex system meddling in a hugely complicated evolved system that is probably beyond their capacity, it’s beyond their can to actually understand the dynamics. It’s beyond the understanding of most people. Leonard Reed famously wrote a book saying no one knows how to, it’s called “I pencil”. And he pointed out that no one knows how to make a pencil, seems like a crazy statement. But if you unwrap each part of making a pencil, someone has to know how to cut down the wood, which means they have to know how to use a chainsaw, which means they have to know how to make the chainsaw, which means they don’t have to know how to get the metal for the chainsaw, which means they have to know how to make the iron, which the steel which comes from the iron, which comes from the mining. So you go back through all the parts of making a pencil, no one person can do it, but it comes together spontaneously, seemingly spontaneously without any central controller. That’s the important point. There’s no central controller in that. And yet, you can go and buy a pencil now for 10 cents. It involves the cooperation of literally 1000s of people around the world who speak different languages, and may not even like each other, they may hate each other. And yet 1000s of people around the world all coordinated and managed to bring you a pencil at your local store for 10 cents. That is insane. And there is no controller. It wasn’t designed, it wasn’t carefully constructed, as Jim Chalmers seems to think, it was a spontaneous order coming together. And that is the dangerous thing. I think there is when these politicians decide that they need to redesign markets in their own image. And often they have wonderful goals, right? I mean, their vision of the world, that vision of the future is not some dystopian nightmare. That’s just the accidental byproduct of their arrogance and their lack of humility. So anyway, that’s my rant on this. Now, I haven’t spent as little thinking about it as you, so maybe I’ll have to duck into it a bit more over the next week.

Gene Tunny  23:28

But I want to have a closer look at just what these vehicles are and how they intend to direct investment. I mean, he talks about, well, we’re not going to pick winners. Okay, that’s great. Oh, but we’re just gonna set the priority. So it’s like this state directed model that the French had, I think in the 50s or 60s, I wouldn’t call it fascism. I’d call it corporatism, or, or whatever the French used to call their system back in the day, the government’s got an idea of where the investment needs to go broadly. It’s sort of national economic planning. That’s the type of mindset and one thing I’m waiting to see is will they try and revive this idea of an infrastructure bank? So this was something that was raised during the time of the Rudd Government but got knocked down. Turnbull criticised Kevin Rudd has been Kev Lonnie, with reference to Kim Lonnie and there was the people were talking about well is this gonna be the new transcontinental I don’t know if you remember it was it transcontinental, the tri-continental, the, the Merchant banking arm of the state bank of Victoria that went bust in the late 80s. Victoria, when it just got into, you know, just made all these crazy loans during that, that colossal boom in the late 80s. There’s a real risk to government balance sheets here, and I just want to wait and see just what they’re proposing. And whether there is some bold scheme like that, that the treasurer could be announcing. That’s what I’m going to be looking out for.

John Humphreys  24:58

I think on the retail politics that is the right thing to look for I should reiterate, I don’t actually think Jim Chalmers is intended to be a fascist, because I don’t think he intends to follow through on the logical consequences of his own article. But I still think it’s worthwhile pushing back on the substance of the article, even if I don’t think you’ll follow through on it. I don’t want people to think of it as an ideal, because I still think the ideals in there are very dangerous. And look, I also take your point, in reality he’ll be whether it’s fascism, or corporatism, it’ll be a watered down version of that. And we need to see the details I agree. But still, the steel man version of that is worth addressing, in case it seduces the thoughts of any young people that stumble across these ideas. You make a good point that perhaps corporatism is the better word for it than fascism. I’ve thought about that a bit lately, that could work. I wonder though, whether there is a difference between the two, they both involve this incestuous relationship of big business and big government. Perhaps the difference is who has the upper hand. And I think in corporatism, perhaps the idea is that big business has the upper hand, and they kind of use big government as their tool for success. And in fascism, it’s the government has the upper hand, and they use big businesses, their tool for enforcement, or getting things done. But anyway, that’s a thought bubble there on what the potential difference could be. I don’t know which one Jim Thomas hopes he would achieve. Probably not corporatism. But I’ll cheekily put that aside for the voters. What he

Gene Tunny  26:17

wants to achieve is he wants to get enough votes from the labour left by imagining he’s can remake capitalism, where, really, he’s going to get some he’s going to create some investment vehicles. There’ll be some additional money into into renewables and housing. But is it really going to make much of a difference? And I don’t know, I mean, in housing that, you know, that’s one of their big challenges. I mean, that housing affordability is a massive problem now. And the number of people who can’t find accommodation, particularly in Brisbane, I mean, I go for a walk along Wickham terrace in Spring Hill. And I mean, the usual homeless people, you see, but now you see there are people living in cars, they’ve got all their worldly possessions, in, in the back of their vehicles. And it’s just tragic. And it’s because for years, we’ve just stopped people from building houses where people want them. So we’ve got, we’ve got problems that have been created, in part through government regulation. And now that’s going to be used as one of the excuses for remaking capitalism and providing, I don’t know, whatever, they’re going to do subsidised housing, there’ll be some money for that social housing, but it’s not really going to be enough to solve the problem, in my view.

John Humphreys  27:30

But it’s so often the theme, isn’t it? A government programme goes wrong. And the lefties turn around for capitalists to say, Why did you do that? And then they use that to justify another government programme that also goes wrong. And the whole cycle repeats itself. I do like the fact that every time I try to get us distracted in a conversation about the grandiose philosophy of the implications of Jim Chalmers article, he brings us back to the real retail politics, which I think is entirely correct. I think your read on this is true that his grand philosophical statements, they’re mostly just fluff and waffles so that he can try to get the Labour leadership and it’ll mean a bit of tinkering. I think you’re right. I just still enjoy rebutting the actual words. Anyway, that this has been a fun discussion.

Gene Tunny  28:13

Definitely John. Okay, I hope you enjoyed my conversation with John Humphrys about the Australian treasurer’s essay on values based capitalism. I’d say the takeaways from the episode include firstly, that there’s clearly been a big change in the intellectual climate since the financial crisis, and treasurer Jim Chalmers has picked up on this making some of the standard criticisms of so called Neo liberalism. Secondly, it’s important to consider specific policies and to weigh up their costs and benefits and the likelihood that claim benefits will be achieved in my view. If we do so it’s understandable why there’s been such a negative reaction to Jim Chalmers essay by economists and financial commentators here in Australia, I should say, I don’t want to be too negative. I have met Jim Chalmers in the past when he worked for treasurer Wayne Swan, and he struck me as a nice person. He clearly thinks a lot about economic issues, and I respect that. And the treasurer did say some say on things in the essay, for instance, he writes, in the wider world, the contest between democracies and autocracies is economic as well as military. Despite deep disquiet about our own economic models. The reality is that democracies largely work. As of 2021 GDP per capita is around 60%, higher in democracies than in autocracies and the gap isn’t closing. Thankfully, Chalmers is a Social Democrat rather than a revolutionary. But he argues that to protect democracy, we need to have greater economic inclusion. That’s fair enough, but we need to think critically about the measures he proposes to promote it. obvious questions include, will they actually achieve greater economic inclusion, what will they cost? What are the risks to the government’s balance sheet and to taxpayers who will ultimately bear the cost of any bad investments? As I suggested in my conversation with John, history tells us we should be wary of governments owning banks or other financial institutions that don’t have a great track record. The failures of the state banks of South Australia and Victoria were big news in the early 90s. But now three decades have passed and the lessons may have been forgotten sadly. Also, as I noted, when chatting with John the results of the body that the treasurer calls a great success, the Clean Energy Finance Corporation, well, they’ve been pretty ordinary and they don’t appear to be meeting the target of return. The presentation of the financial results for the corporation is rather confusing, but it looks to me that they’re underperforming. I’ll put a link in the show notes so you can see for yourself. One thing I should have covered in my chat with John is the concept of social impact investing. This is an investment where there are both financial and social returns, such as in a profitable social housing development. Social impact investing is one of the concepts that Jim Chalmers is fond of. In a recent financial review article, John Keogh referred to an example from New South Wales in 2013, a social impact bond which raised $7 million from investors to finance the new PIN programme. N E W P I N. New PIN stands for New Parent Infant network. It appears to be a programme to support new parents so they look after their children properly and the children don’t end up in foster care. It looks like the Queensland Government has tried something similar. Typically, impact investments require government involvement of some sort to ensure that the private sector investors get a return. For instance, governments could pay performance bonuses if certain social outcomes are achieved. There’s a handy note from the Treasury which summarises the Australian Government’s principles for social impact investing, which I’ll link to in the show notes refers to such things as payments by results, contracts and outcomes focus grants, that’s how the investors will be rewarded if the investment achieves its social objectives. These payments could be justified because successful programmes could result in budgetary savings in the future. For example, if programmes result in healthier children, that could reduce health costs in the future. You could also imagine programmes resulting in savings in welfare spending, or cost of the justice system. I’d say that such savings are possible, but we should think critically about the likelihood of such benefits and follow up to make sure that they do actually occur. That is, so we’re not paying nonprofits and investors additional money for results that they don’t actually achieve. It looks like treasurer charmers might end up announcing a social impact investment bank in his next Australian government budget in May 2023. James says that the Financial Review gave a good summary of what this bank could do in an article in October last year, which I’ll link to in the show notes. He wrote, the new body would work with investors to supply capital to intermediary funds, which would direct private investment into social housing, aged care, early education or disability services alongside government funding. This could take some pressure off the government budget for providing these services alone. Okay, that’s the point I made in my chat with John, that some of the motivation for what Chalmers is proposing is the poor state of the government budget, they just don’t have the money to undertake traditional programmes. He’s talking about impact investing because he doesn’t have a lot of options. With his social impact investing bank, he can support things that he wants to do off budget, so to speak. James Ayers continues, the institution would make returns when service providers who would typically be receiving some government funding make predetermined improvements to social outcomes such as housing, education or caring for more people under agreed service standards. Apparently, there’s a body like this already in the UK called Big Society Capital. There’s a fair bit to explore with impact investing, so better return to it for a closer look at a future episode. There are a lot of players involved and I’ll do my best to get someone familiar with impact investing on the show for a deep dive. In the Australian model, it looks like there’ll be a government backed social impact investment bank referred to as a wholesaler. Major commercial banks could also provide capital for this bank. It appears based on reporting from the financial review. There’s talk about 200 million coming from the government and 200 million from the private sector. I expect the social impact investment bank will provide finance at lower than market rates for social impact investing funds. These funds then invest in nonprofits or so-called Social Enterprise causes which are delivering programmes under government contracts. An example of a social impact investing fund is the $91 million social impact investment trust, established by social ventures Australia, a nonprofit and Hester a superannuation fund. How the performance bonuses are shared by the nonprofit, the investors and the government back bank will need to be defined by various contracts between the players. This all seems very elaborate to me. There are no doubt a lot of investment bankers and fund managers earning healthy fees along the way. Does this lead to better results? It may do so if the investors push the nonprofit to deliver superior services. As always, I’m open minded but sceptical. I’ve seen that the consultancy firm Airbus has undertaken a positive evaluation of the New South Wales new ping programme. So it could be good to go through that in a future episode. I haven’t had a real chance to dissect that one yet. I do wonder just how much we can rely on impact investing to solve social problems compared with other measures. As I noted with John, I doubt it will solve the housing availability shortage, which to me appears related to restrictions on housing developments. And it’s not going to replace welfare state programmes such as Australia’s various support payments and the National Disability scheme. Maybe you can do positive things at the margins, we have to wait and see because it’s still early days when it comes to impact investing. For a sceptical take on impact investing, which I’ll link to in the show notes, I’d refer you to a 2020 Harvard Business Review article by Ruben Finnegan, who I know well and Alan Schwartz is a prominent Australian businessman. Impact Investing won’t save capitalism. Okay, that’s all from me on values based capitalism for now. If you’d like a closer look at impact investing or any other topic, please let me know. Thank you. Right oh, thanks for listening to this episode of Economics Explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact@economicsexplored.com Or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting outlets you then please write a review and leave a rating. Thanks for listening. I hope you can join me again next week.

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Podcast episode

ESG: Useful concept or greenwashing? w/ Rachel Baird & Stephen Howell – EP145

ESG, short for environmental, social, and governance, is proving difficult for companies to implement in practice, and some have been accused of greenwashing. What exactly is ESG and has it come to the end of its useful life, as the Financial Times has suggested may be the case?  

Joining show host Gene Tunny in episode 145 to discuss ESG are some highly experienced corporate governance experts: Dr Rachel Baird and Stephen Howell, part of HopgoodGanim Lawyers. Both Stephen and Rachel advise boards on ESG matters and Rachel is currently facilitating the Law & Sustainability short course delivered in partnership between Pearson and Oxford University.

In this episode you’ll learn how good corporate governance is the critical foundation for everything, and how company leaders should ensure their company’s policies are not dictated by inexperienced people posing as ESG experts pushing their own agendas. 

You can listen to the conversation using the embedded player below or via Google PodcastsApple PodcastsSpotify, and Stitcher, among other podcast apps.

Links relevant to the conversation

Dr Rachel Baird, GAICD, FGIA – Director – IcebergSRC | LinkedIn

Stephen Howell – Director – Effective Governance – Part of the HopgoodGanim Advisory Group | LinkedIn 

Origins and Consequences of the ESG Moniker (paper mentioned by Rachel in the episode)

Who Cares Wins 2005 Conference Report: Investing for Long-Term Value

Tim Paine scandal a mess of Cricket Australia’s making — and it will get worse – ABC News

How ESG investing came to a reckoning | Financial Times

Effective Governance

Transcript of EP145 – ESG: Useful concept or greenwashing w/ Rachel Baird and Stephen Howell, Effective Governance

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:01

Coming up on Economics Explored…

Rachel Baird  00:04

We don’t even know what the implications are of lithium, like, is that actually going to be environmentally friendly? We don’t even know; you know, there’s movements about green steel. We don’t know what the impacts are of all the cloud-based servers in the American desert. So, there’s so much more potential to understand what we’re doing.

Gene Tunny  00:22

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host, Gene Tunny. I’m a professional Economist based in Brisbane, Australia, and I’m a former Australian Treasury official. This is episode 145 on ESG, short for Environmental, Social, and Governance.

According to Investopedia, ESG criteria are used to screen investments based on corporate policies and to encourage companies to act responsibly. But ESG is proving difficult for companies to implement in practice, and some have been accused of greenwashing.

What exactly is ESG? And has it come to the end of its useful life, as the Financial Times has suggested may be the case? Joining me to discuss ESG this episode, are some highly experienced corporate governance experts, Dr. Rachel Baird and Steven Howe, of effective governance, part of HopgoodGanim lawyers. Both Stephen and Rachel advise boards on ESG matters. And Rachel is currently facilitating the law and sustainability short course delivered in partnership between Pearson and Oxford University.

In this episode, you’ll learn about how good corporate governance is the critical foundation for everything, and how company leaders should ensure their company’s policies are not dictated by inexperienced people posing as ESG experts, pushing their own agendas. In the show notes, you can find relevant links, corrections and clarifications. You’ll also find details of how you can get in touch with any questions, comments, or suggestions.

Please let me know what you think about this episode. And if there are any topics you’d like me to cover on the show. I’d love to hear from you. Right now, for my conversation with Rachel Baird and Steven Hale from effective governance on ESG. Thanks to my audio engineer, Josh Crotts for his assistance in producing this episode. I hope you enjoy it.

Rachel Baird and Steven Howell from effective governance part of Hobgood Ghanem Lawyers, welcome to the program.

Rachel Baird  02:26

Thanks. Great to be here.

Stephen Howell 

Yeah. Great to be here, Gene.

Gene Tunny  02:29

Yes, it’s good to have you back on again, Steven. We chatted about corporate governance a while back and I reached out to you because I’m interested in this issue of ESG. And you mentioned that Rachel is an expert on ESG. So, I thought, that’s great. Let’s bring her into the conversation. So, Rachel, it’s good to have you.

Stephen Howell  02:51

It’s good, Gene, because, in our practice, we recognize the importance of the Australian; ESG is not just Rachel’s area of practice, she does right across the governance advisory work, but she does have an interest in ESG. So, that was one of the main reasons that we brought Rachel into the business to assist us with that. Because of the increased activity, particularly from boards.

Gene Tunny  03:21

Right. Okay. I’ll be interested to hear about that. Rachel, could you just tell us a bit about your background? When I spoke with Stephen last time, I learned a bit about Stephens background at ASIC and, and before that, in the Police force. I’d be interested in your background; you’ve been in the law, haven’t you?

Rachel Baird  03:43

I have, but I actually started my legal career in the defense force. So, Stephen and I share that; we come from, I guess, regulatory backgrounds, which is good for governance. And I was a lawyer in the Airforce and decided that I needed to have more challenges and got out into the masters of environmental law. And that led to practice at Clayton Newts, which was great; big law firm, lots of exciting work. And then, children came along and I ended up doing academic work and did my PhD in International Environmental law with Gillian Triggs, who was a great supervisor. And I’ve always had this very strong interest in ESG. And even in the late 1990s, that corporate social responsibility concept was starting to take seed. In a way, I feel like I’ve written this wave where environment wasn’t accounted for on the financial pledges, and now it’s very firmly on the board table conversation. And I’m really excited about that. And obviously, of course, social as well, and we’ll unpack that acronym soon. But yeah, I have a strong sort of academic and practical background in environmental social issues. I’ve worked on big oil and gas projects, I’ve been exposed to the social impact, I have done large projects as well.

Gene Tunny  05:02

Right, okay; very good. Let’s get started.

Rachel, would you be able to tell us what ESG is exactly? You mentioned corporate social responsibility; is this a successor to that concept? What is it exactly?

Rachel Baird  05:20

You could say it is. I guess to start with, it obviously means something, because there’re some estimates that, by 2025, around US 53 trillion dollars, will be held in ESG assets, whatever that could be. And it’s a very nebulous term. And I think it’s an acronym with a huge remit. And, I could be cynical and say that it’s like, avocado on toast, or soya balls; it’s the big fad. But I don’t want to be that cynical, because ESG is very, very important. But you can trace its roots back; I think the first time it was mentioned was 1999, the UN came out and they were more forward looking. And they talked about this global compact where they wanted big business and banks and government to be part of a social conscience. And so, there was a report that came out of that global compact, called Who Cares Wins. I guess that was by James Bond,

Gene Tunny  06:23

Yes, yes, very good.

Rachel Baird  06:27

So, Who Cares Wins, and buried in this report was a statement that said, “better inclusion of environment, social and corporate governance factors in investment decisions from there and its use.” Well, that was the statement, sorry; “better inclusion of environment, social and corporate governance factors and investment decisions would lead to better outcomes.” But from there, its use really grew in investment decisions and investment circles. So, for a long time, it was spoken about in investment circles. And I think that’s borne out by a lot of the standards about, climate change related disclosures, financial disclosures, you know; are there climate change related risks or litigations that are going to impact the financial bottom line of a corporation? But gradually, it sorts of crept out of the investment circle.

So, in 2005, there was a UN report that linked ESG factors to financial performance, and that was increasingly being recognized. So, it wasn’t just nice to have that, it was actually proving its worth looking at environmental issues, social issues, and corporate governance, decision governance issues.

Gene Tunny  07:37

So, what was this report, again?

Rachel Baird  07:39

In 2005, the UN report, I’m sorry, I don’t have…

Gene Tunny  07:43

That’s okay. But they were making the case that it does improve financial performance.

Rachel Baird  07:49

And I think that’s been accepted. Well, and truly now, with 17 years later, there’s a definite link between improving your environmental and social and corporate governance factors. I mean, Stephen…

Stephen Howell  08:01

I think it links back to good, or highly effective governance processes and procedures in place. We know from other reports, we know from a lot of research that’s been done, we know from our own businesses, and our own business activity, that, investment decisions often relate to good governance practices within corporations. Investors will look for those good practices; investors will be turned off by those bad practices.

So, good, solid governance frameworks, good processes in place, good controls in place, having the right people with the right skills sitting around board tables, having the right people with the right skills, in the executive teams making those decisions, always attracts investors and investors nowadays will go out of their way to seek out good companies to invest in based on their governance practices. And that’s what Rachel was saying. By having; investors will now look towards those organizations that have good ESG practices in place.

Gene Tunny  09:37

Yeah, they mean to have a closer look at those types of studies because the skeptical economist is going to wonder, to what extent is the correlation rather than causation? or to what extent is it; is it the fact that it’s something else? I mean, it’s the fact that these companies are better run, they’ve got all of these other processes and then they adopt ESG because they like to have that suite of policies and procedures and it may not necessarily be ESG that’s improving their performance. It’s the fact that they’re well run in the first place.

Stephen Howell  10:12

Some really game commentators will talk about percentages of increase in performance levels, based on good governance practice. I think that’s a bit dangerous to do that. Because, it sends the wrong message. And but, I think a lot of it, Gene, is also based around government policy, particularly around particularly the regulators; we’ve got a lot of regulators in this country, we talk about ASIC, our company regulated when we got our pro rail, prudential regulator, we’ve got the ACNC, charities regulator, and all those regulators always talk about the; sorry, not so much, talk about they articulate the level of scrutiny of companies that aren’t abiding by good governance practice. And they will highlight the fact that they need to have the people that are able to make the right decisions. The people that have the background and experience. It’s a big push from regulators at the moment to ensure that directors and executives for that matter, have the right skill, they’re the right people to make decisions that are going to affect shareholders, stakeholders, consumers.

Rachel Baird  11:47

I think economists can be encouraged by the fact that the term ESG started in investment circles, okay? So, it’s earned its chops so to speak, because it’s proven that it relates to a better financial performance. But it’s true that the better organized you are; the better your governance structure is, the better equipped you are to take advantage of opportunities. Some people talk about ESG is a risk, but it’s an opportunity. So, if you’ve got a really well operating organization, then you can go; let’s take advantage of the opportunities that an environmental and social strategy provide us. So, if you just look at environmental, and we’re talking about this before, it’s becoming a requirement of government tenders to show that you’ve got an ESG strategy.

If you don’t, you’re straightaway cutting yourself out of those opportunities to get the government work. We also know with our young workforce, the millennials entering the workforce, they want an organization that’s aligned to their values.

A research shows that employees want to work for companies that have a strong environmental and social moral license, whatever that means. But then you’re going to have more engaged employees, you’re going to have theoretically lower attrition rate, a higher discretionary effort. There’s also benefits to your bottom line where you’re operating more efficient processes; there’s a lot of economic benefits to be gained. And I used to say to my environmental law students years ago, when we get very idealistic, and they go, why does environmental social issues; why do they always lose out to the Big E economy? And I’d say, it’s time will come when it will have a financial value and I think that time has come.

For the ASX 200 companies would not be involved in ESG because it’s voluntary in Australia still. If there wasn’t a financial benefit to doing it, because they still at the end of the day, have shareholders to be responsible.

Gene Tunny  13:46

Okay. I mean, it’d be good to explore that a bit later. And to what extent they’re doing it because it is of economic value, or to what extent is it just for PR, or is it so called greenwashing, that sort of thing? So, we can we can chat about that? There are a couple of things I want to pick up on what you’ve said.

It’s ESG; and you mentioned the statement relates to environment. Is it society or social? Social issues and then corporate governance. So, to create the ESG abbreviation, they’ve dropped the C because ESG sounds better than ESCG, presumably. So yeah, that makes sense. Environment, social, and corporate governance. What typically are these issues; what are the big ESG issues, Rachel?

Rachel Baird  14:37

Okay. Well, before I go to that, I’ll just talk a bit about how I think the term can be misused or misappropriated. So sometimes it’s used for investment analysis and a lot even more and ASIC has made some comments that we can talk about later. Some say we’re ESG friendly, whatever that means. It can also be used from a risk management point of view, opportunity point of view; it can be used in what I call corporate social responsibility context, which is really values-based or morals-based. And then it can also be just its trend, like the vibe of people want to go to the movie, the castle, it’s the vibe.

So, I do sometimes get a bit cranky that people misuse the term or bandied around and don’t know what it means because it’s complex. And so, when people get, I just want an ESG strategy as well, I want one piece. What do you really want from your strategy? And it goes down to what your business is.

So, short climate change, greenhouse gas emissions reductions, sea level rising, they’re huge, big-ticket items, from a global point of view. But your local florist is not going to have much of an impact on that. What does ESG mean to them? So, then you have to really translate it to them and go, well, what are your environment impacts? Are they waste to energy use transport suppliers? What are your social impacts? What’s your supply chain? Are you employing staff properly? There’ll be micro level but, to them, don’t make a difference. And then also, what’s your what’s your governance impact? So, a florist who’s running a chain of florists might say, well, how governance impacts or compliance or decision making policies about employment or whatever they are, but you relate it to the florist.

But then if I move to say, a suite of health, transport operations, they would have completely different E, S and G issues. I guess, there’s no one size fits all, you can’t just roll out a roadmap or a playbook to a company and say, we’ve got your ESG sorted, because it will depend on their level of maturity, where they are in the businesses; some businesses might be so broken that until they get their governance framework sorted, people throw around diversity is a governance issue. Yes, it is. But if you if your governance framework is so broken, I can’t even talk to you about diversity until you get the governance framework working.

I’m working with an organization at the moment, who going on; we need women on the board, we need women on the board. I said, yes, you do. But governance is not static, it’s dynamic – it’s a journey. So, let’s sort out your basic hygiene first and your policies. And then you can talk about diversity on the board. And I think with ESG, people try and promise too much, as in, over promise and under deliver. And I think they really need to be realistic and going, what can we actually deliver? And that goes to greenwashing which we’ll talk about but don’t over promise and under deliver because that’s greenwashing territory.

Stephen Howell  17:34

I think it’s really interesting, Gene, with the activity that we’re seeing, at the moment. Yes, ESG is a big issue. But some of the questions that were being asked, as you know, in my role as the Principal Advisor for effective governance, I spend probably about 95% of my time working directly with boards. And the questions that I get asked all the time by boards is, those questions that you’ve posed today, what is ESG? How do we deal with it? Should we be dealing with it at board level? Should we be just ensuring that we’ve got the right people with the right skills in the management team? Or do we need people on the board? And if we do need people on the board with those skills, where do we get those people from? How’s that going to affect our business? How do we report on that? So, they’re asking all the right questions.

I’m talking about boards in the listed area, in the unlisted area, the public companies, even governments, of course. You know we do a lot of work with government and corporations, and we do a lot of work with charities, which is really interesting; the big charities around Australia. And they are asking those questions, because that’s going to improve their governance footprint, if you like. Particularly when they’re talking to funding bodies, about how they might be operating the hospitals, that we do a lot of work in the hospital; health sectors. in working imagine the ESG implications for within hospitals.

Rachel Baird  19:29

I was just going to say charities are; they’re going to have the biggest impact on the SRP – ESG. Because their whole purpose; their purpose driven for social impact and social change. So that’s where we’re going to see a lot of a lot of good work.

Gene Tunny  19:46

Okay, we’ll take a short break here for a word from our sponsor.

Female speaker  19:51

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Gene Tunny  20:20

Now back to the show.

So, one of the criticisms of, I think it’s a criticism of ESG, or maybe it’s a criticism of the whole sort of woke concept in the States, particularly is that there’s this concern by some commentators, particularly on the right, that companies such as Disney, and well, I think Netflix has pushed back on it recently, we chat about Netflix, perhaps. But other companies, Nike, they’ve gone, so woke, so to speak, and that they’ve embraced particular sort of positions. They’re promoting diversity. And I mean, I think diversity is great. But it looks like they’re taking political positions. To some extent they might be; Disney will be changing traditionally, male characters into female characters. There’s a huge debate about all of this. And that, I mean, there’s an argument that it’s gone too far. I’m just wondering to what extent is what you’re seeing in the States, I don’t know, maybe it’s a bit of a beat up? I don’t know. You’ve seen similar things in Australia? Is this something you’re concerned about?

Rachel Baird  21:34

Yeah, it’s really good question. And before I get to that, Steven mentioned something about the boards asking lots of questions. There’s a real dearth in ESG talent. Okay? So, what I worry about and it goes to your question, is there’s not enough people who have the skills to talk about this in an informed and intelligent way. So, and we can’t just call someone a sustainability officer, okay. So that they are so if you’re sticking someone in a big multinational and saying, drive sustainability, if they’re a young generation person, they might drive it from a me too lens because that’s all they know. Or if they’re a greeny who; I shouldn’t say greeny. It’s not in a pejorative sense. But if there’s someone who recycles and, and it has zero waste and doesn’t use plastic and all that, they’re going to drive it from an environmental sense. So, you’ve got to be really careful about what the corporate strategy is.

So, Nike, for example, their purpose is people, planet, profit. And so, they are going to go out and make comments about; and a lot of companies go people, planet, profit, because the planet is environment, people are social and profit is still their shareholders. Like I said before, there is the risk that the term gets misappropriated to drive different agendas. So for example, if we’re going to say that we’re going to have more animated characters – female because there’s been a dearth, and it’s been to male, that goes to gender diversity and social. But is that really part of ESG? Is that really the roots of ESG? And that’s where; you could be debating about that the whole time. But it probably has lost its way. And there’s a really interesting article that I’ve got with me, written by an American academic, where she out of the Wharton School, University of Pennsylvania, and it’s a really good one. It’s called the Origins and Consequences of the ESG moniker by Elizabeth Pullman. And it explores how the term evolved and has been appropriated.

Gene Tunny  23:29

Okay, I might put that in the show notes. I’ll have a read of that. Okay. Good stuff.

Rachel Baird 

I’ll send you the link

Stephen Howell  23:35

From the Institute of Law and Economics, Gene.

Gene Tunny  23:39

Oh, good. Excellent. So, another thing I wanted to chat about was, you mentioned the younger cohorts. I mean, we’ve got, millennials have come into the workforce. And now, we’re getting what came after Millennials or Gen Zs; they’re coming in.

Rachel Baird  23:58

I forgotten I’m a Gen X. I’m just sandwiched between the baby boomers who spend my inheritance and my children who inherit it.

Gene Tunny  24:05

Yeah, same here. But I remember when I first entered the workforce, I mean, I don’t think anyone cared what I thought about. I wouldn’t have been presumptuous enough to try and change the culture of the, the organization of the company. I don’t know. But yeah, it’s extraordinary. It’s become an issue in the States because I think, it was Netflix; there were some employees at Netflix who complained about the Dave Chappelle special. I don’t know if you’re aware of that. Or was it, Josh Dave Chappelle the comedian and Ricky Gervais has had a controversial special on recently, and whether they’ll make comments that upset some of the people working because the people in the organizations think that they’re not respectful of the rights of marginalized groups or whether it’s gays or whether it’s trans people. And yes, there was some pushback internally, and then Netflix, I think, put out a memo that said, ultimately, we have to make the business; the business has to work, and we have to produce content people want. Just settle down people, was basically what they were saying. I thought that was interesting, because ultimately, these companies have to make money. They do have an obligation to shareholders, don’t they?

So, how do companies balance these considerations? Because the traditional economists view and what Milton Friedman argued, in that infamous Newsweek article in the early 70s, was that companies just owe an obligation to their shareholders. And so, they’ve just got to maximize profits. That’s what they do. They should abide by the law, but they shouldn’t go beyond that and do much more for the environmental social issues, and that they should just maximize profits. That’s how they’ll maximize well-being.

But is that right? That companies still owe an obligation to shareholders, don’t they? And how do they balance all of these things?

Rachel Baird  26:04

It’s a double-edged sword because this new phrase of stakeholder capitalism has been gaining traction. And then it’s, well, how long is a piece of string? Because shareholders are stakeholders, but so are the community that you operate in. So, if you’re operating in a developing country, they’re stakeholders. So are your employees, so are your suppliers, so is the government. So, how do you keep all of those stakeholders happy? It’s a huge balancing job. And I think the key is to be really strong on what your strategy is, so that you’re not doing what I call the 24/7 news cycle, knee jerk reaction, that if someone says something, you go; I’ll be better put out a press release to keep them happy. The board goes back to its strategy and goes, well, look, we can’t keep everybody happy all the time. But our strategy is this, we’re happy with it, we’ve deliberated on it, we in a moment of quiet deliberation, we agree this was our strategy. So why in a moment of crisis, would we deviate from our strategy and make some kind of knee jerk comment? A bit like I guess, if you want to say cricket, Australia, when they handle the Tim Payne thing, stick to your strategy.

Gene Tunny  27:18

Can you elaborate on that?

Rachel Baird  27:20

I don’t know a lot about it. But I just think that they probably acted in the heat of the moment when they decided to part ways with Tim Payne rather than sticking to; and again, I wasn’t in the boardroom, sticking to a strategy and going, we don’t need to feed the 24/7 news cycle, we can take a moment, we can issue a press release that talks about strategy. So, the Netflix one sounds like they’ve done something where they’ve gone no, this is our pathway. We’re not going to keep everyone happy, but as long as we’re not being egregious, we’re being socially and environmentally, sustainable and responsible. We’re not going to apologize for who we are. I think that’s where boards are the second guessing themselves a bit trying to think well, we just got to keep; so I think really, Cricket Australia was trying to stay on the right side of the me-too movement. But if you ever try and stay on the right side of a movement, you’re never going to be on the right side of it.

Gene Tunny  28:13

Gotcha. So, Tim Payne was an Australian cricketer. And I’m trying to remember the circumstances; did he have an affair with someone who was working at Cricket Australia?

Rachel Baird  28:21

I think there’s something about that incident, messages exchanged or something. Okay, even the facts aren’t really relevant. It was I was more raising my eyebrow about how it was managed.

Gene Tunny  28:33

Right. Okay. I’ll put some links in the show notes. Can’t remember the facts.

Rachel Baird  28:39

And he was ultimately stood down as captain of Australia for something he did several years ago.

Stephen Howell 

Several years prior.

Gene Tunny  28:46

Right. Okay. I’m interested in the companies that are asking for this. You talked about a wide variety of companies; there’re public companies, but what about private companies where the owners have a strong control over the operations of the company? I can see why charities would want something like this because they’re trying to achieve some social purpose. But what if you’re an Elon Musk or something; actually that’s not a good example, because these companies are public, aren’t they? But he’s been trying to privatized Twitter, but what about private companies? Are they immune from this or they’re not? Do they want ESG as well? what’s driving…

Stephen Howell  29:33

They might not want it now, but particularly, I always think about the private companies being some of the big building corporations, some of the big builders that are building not just homes;

Rachel Baird  29:51

We’re getting commercial work that needs to comply;

Stephen Howell  29:55

They need to comply. Yeah. It’s really interesting. Yes, the private companies are going to be involved as well.

Rachel Baird  30:05

They’re slower, they’re definitely slower than public companies. And I’m seeing in Europe because I’m, I’m involved in this course that’s run by Oxford University. But I’m employed by Pearson, I’m not allowed to say I’m employed by Oxford University even though I teach the university course. And I’m seeing talking to all my students who are from all around the world, that I mean, environmental law really started in Europe anyway, and those streets ahead of Australia, and we’ve been following the lead of the Europeans. And the private companies are jumping on and realizing they have to comply with ESG requirements as much for their customers, their employees, and also to be competitive, definitely. They might not have the stakeholders who are shareholders, but I’ve got all the other stakeholders.

Gene Tunny  30:55

Okay, so this is something that will you mentioned, the younger, potential employees, it’s something that they care about that if you want to get the best people, you need to show that you’ve got ESG. Right? That’s interesting.

Rachel Baird  31:11

You’ve got everything, so you care about your staff, you’ve got good leave programs. You do waste recycling, and you give them leave days to do like, say, a law firm, pro bono, or whatever it is. You’ve got a social conscience, what does that mean? it’s defining it for the firm. Like you said, when you join the workforce, it was just you just turn up and work and do what you’re told. But now it’s like, I know, I want to have a work life balance, but I also want value in the work I do.

The worst thing my son told me was, I don’t want to grow up and be like you because you just leave the house and you look sad, and you go to work, and you come back and you’re tired. I really do enjoy my work when I’m at work. But they seem to think there’s a utopia out there in the workplace. I don’t know; it is still works.

Gene Tunny  32:02

Yeah. Well, ultimately, if you’re in business, you need to make money, you need to make a profit to keep going. just with this regulatory requirement or this requirement intenders, that you need to demonstrate your ESG credentials. I know for government that’s right; is it also corporations that are pushing this on their suppliers as well? Are they pushing for ESG?

Rachel Baird  32:32

It’s becoming more evident. I was talking to a very large company, I won’t say what industry they’re in, or it might be easy to pick them. But they found out dealing with other commercial providers that they were needing to show that they had an ESG strategy. If you think of it as like a food chain or supply chain. If they’re tendering for work, they needed to be able to demonstrate that the suppliers that they deal with how socially responsible. So, it goes up that whole ecosystem.

Gene Tunny  33:08

Gotcha. Yeah. Okay.

Stephen Howell  33:11

Also Gene, as I mentioned earlier, the push; there’s a significant push from government and regulators, and my experience is that when there’s a push from government, when there’s a push from regulators, boards and corporations will take note because they need to take note; because government and regulators don’t have a heightened scrutiny in particular areas for no reason. They do it based on  what’s driving that, and it’s normally driven by shareholders, the people, those investors and the general public who want to see higher levels of  ethics and responsibility in organizations. So, that’s what’s normally drives it.

And so, boards and organizations will take note of what the regulators have to say and as we were saying earlier about the; yesterday, ASIC made a press release in respect to that whole issue of what’s described as greenwashing. particularly Australians, the Australian Securities and Investments Commission, and, who are responsible for Australian or most of Australians companies.

It’s interesting that they targeted superannuation funds and managed funds. There’s a similar push from the corporate ring at the prudential regulator, ASIC being the corporate regulator; APRA, the Australian Prudential Regulation Authority, being the prudential regulator, the ones that the regulator looks after the financial institutions. Being, of course, some of the super funds and managed banks and insurance companies. And, in fact, I was only talking to a life insurance company this morning, one of their clients along the similar lines about skills that are needed in particular areas, and this particular area came up.

It’s all about what the regulator is saying, what ASIC is saying is that, these firms need to be very careful about how they represent their financial products, or their investment strategy. Particularly around being environmentally friendly, sustainable and ethical. If they market their products as being ethical and sustainable and environmentally friendly, they need to be able to show that that’s in fact, correct.

What ASIC is saying today is, these promoters need to use clear labels and they need to clearly define what sustainability terminology they’re using, they need to define that. What does that actually mean?  This product will help maintain a sustainable, organization or product. But unless you properly describe it, it doesn’t make much sense, and clearly explain how sustainability considerations affected in to the investment strategy. How does that all work? How do you actually factor all that into any investment strategy?

They made it clear; the regulators made it clear that it’s what they call it a priority area of focus. And they’re going to be looking at it and monitoring the market.. And they specifically highlighted that any misleading claims about ESG and sustainability will come under their notice. What I’ve seen of recent times, Gene, is how the regulators making these sorts of comments about monitoring, and about how they’re going to be, really watching the market clearly. So, it’s not just ASIC, it’s APRA, and it’s the ACNC – the charities regulator,

Rachel Baird  37:54

Even the securities [exchange] ASX has come out and said, companies should check their sustainability claims. But what’s interesting is I think, this comes off the back of litigation. So, Australia is a bit of a hothouse of litigation. But in America, there is a shoe wear company called Allbirds. And they manufacture wool; they’re called slippers, but they’re not slippers. They are like soft linen, sunlight pleasure shoes, and their statement was that their wool was sustainably sourced. Now somebody in New York who had a lot of time on their hands delved into that and challenged that in a New York court and found that their wool wasn’t sustainably sourced or their statement was greenwashing. And I think everyone in Silicon Valley was wearing Allbirds shoes.

But then in Australia, we’ve had Santos; there was a federal court claim made by the Australasian Centre for corporate responsibility, alleging that they engaged in misleading and deceptive conduct saying that they would produce clean energy and had a clear pathway to net zero emissions. So that was what I mean about over promising because, they were tested and then the Commonwealth Bank, a shareholder, must have been a large individual shareholder, made a claim in a federal court, and they ordered that he be given access to documents in the bank’s premises to, I guess, scrutinize the bank’s decision to finance oil and gas projects. So, more and more claims are being challenged to be verified the accuracy of those claims. And so, as Steven mentioned, the ASIC information sheet that just came out, came off the back of ASIC’s own review. They just looked at a sample of superannuation funds and found there were some areas for improvement.

We’re not at the stage yet, as the UK and New Zealand where they have actually; the government has mandated there’s got to be disclosures of financial related climate change, material risks or material disclosures. We are not there yet. But I think the change of government, they’re probably testing the mood of the public. I don’t think we’re that far away from some kind of mandatory reporting or tighter scrutiny. And the ASIC guideline is enough to put every single ASX company on notice to go. We can’t be cavalier anymore about ESG and greenwashing and just say, those terrible shows you see where you have marketers ago, just put that out that will do. This can’t happen anymore because it will be scrutinized.

Gene Tunny  40:38

I better make sure I understand what the actual requirements are now. Is it under the Corporations Act and other countries would have, I mean, the UK would have a Companies Act? And the US has got some legislation for corporations, but companies are supposed to look after the interests of shareholders or obligation to shareholders. I guess we’ll talk about Australia, given you’re working in this jurisdiction? What are the requirements for reporting on environmental and social and governance issues at the moment? They don’t have any, do they?

Rachel Baird  41:09

Directors have a responsibility to exchange due diligence in relation to climate change.

Gene Tunny  41:13

Due diligence in relation to climate change? That’s included in the corporations act, is it?

Rachel Baird  41:20

There’s no requirement to produce an ESG report, for example. There is a preference from shareholders, that any such report was integrated with the financial report, because a lot of companies are doing standalone reports, but there’s no requirement to do; just a financial disclosure report, is all that’s required.

Stephen Howell  41:39

So, directors just generally have a duty of care and diligence. Like, that’s one of the fundamental wrong to govern, with due care and diligence in the interests of the organization. I just think that we really do need to; I will be advising my clients to be very careful about how they label and explain any of their products, because any misinformation that will erode investor’s confidence in the Australian markets, is going to be looked at very, very closely by the regulators, and by the market supervisor, the ASX.

Gene Tunny  42:33

Yeah, I have to look into that provision about climate change, because I’m going to be the skeptical economist again. Because, the government saying you’ve got to give due diligence, or you’ve got to pay attention to climate change. But what’s wrong with a company just abiding by the law? And if there’s no carbon price imposed? What do you do? I mean, how do you know what to do? I mean,  what if you do too much, and that adversely affects your company and the viability of your company? I mean, you’ve got employees, what if it affects our competitiveness relative to other countries?

Anyway, I know, these are big questions, and we can’t answer them today. But it just strikes me as just over the top to have that in the act at the moment.

Rachel Baird  43:21

It relates to financial disclosures. So, you’re obligated to make financial disclosures, material risks of climate change might be material risk. You’re not obliged to make non-financial disclosures. Does that makes sense?

Gene Tunny  43:34

It’s not imposing an obligation to do anything in a positive sense, to get to net zero? I misunderstood what you are saying.

Rachel Baird  43:43

There’s no obligation. And again, I don’t have it right in front of me, but I know that there’s been talk about; I wish I could remember the name of it. But some kind of safety mechanism, it might be called the safeguard system for over 200 Children 21 large emitters in Australia, those companies to help them transition. So even if there is something that comes in, there’ll be a recognition that you can’t require, say AGL for example, or Santos to suddenly pivot and stop emitting greenhouse gases, because otherwise we’d all be sitting around in the dark.

There’s got to be that pragmatism that we want to move to; not just net zero but just reducing our footprint waste use. Food waste is one of the worst contributors of carbon emissions and people don’t even talk about food waste. So, there’s all sorts of ways we can reduce our carbon emissions.

Stephen Howell  44:47

I saw a great thing, talking about food waste; I saw a great innovation just recently, one of our colleagues showed us, was in here in Brisbane or around and all the public hospitals, you can only just imagine the food waste within public hospital systems. And it all traditionally just gets delivered out to a waste disposal facility somewhere. What they’ve been doing is there’s a company been gathering all waste food up and turning it into fertilizer and putting it into carryback packaging and selling it as fertilizer. It’s just amazing. Rather than take it all the way and dispose of it, turn it into something that’s going to be useful and, and making money out of it as well. So, turning it into fertilizer

Gene Tunny  45:45

That’s useful, particularly because the price of fertilizer has been spiking, hasn’t it because the cost of the inputs;

Stephen Howell  45:54

I thought that was a very innovative, sort of a process; deal with what would otherwise be a total waste of product.

Rachel Baird  46:05

And that reminds me like ESG, you can take it really, really high and say okay, what’s Wesfarmers doing about ESG? Or you can take it really, really low and say what’s Rachel doing about ESG so in where I live, I can have my little worm farm and my little recycling compost thing and I cannot use plastic; that’s the thing, it’s such a huge term that can go across all these layers of human activity.

So, if your listeners, I’d encourage them to say well, what can you do to ensure you don’t have a net zero? Some of my students at Oxford are talking about an individual passport, so when you buy something you get to choose, you might go and the product actually has a little ESG rating like the heart smart or the energy rating you can go I’m choosing that loaf of bread because it has a lower carbon footprint. Yeah, and that goes onto my little smartwatch and I can show everyone that my carbon footprint, kind of gamify which the young people would like but we’re not there yet.

Gene Tunny  47:02

Just as long as this doesn’t end up going to some government agency…

…We’re going to have to start wrapping up. This is a good conversation.

Stephen Howell  47:29

Isn’t it the smallest garbage bin you’ve ever seen in your entire life, Gene?,

Rachel Baird  47:34

Does that makes you rethink? That’s the bin in our office.

Gene Tunny  47:37

It’s slightly bigger than a Rubik’s Cube.

Stephen Howell  47:46

That’s what I was thinking. It’s the size of a Rubik’s Cube.

Gene Tunny  47:49

Yeah, that’s tiny. I was just going to ask you about Wesfarmers; that owns, is it Coles? One of the major…

Rachel Baird  47:57

I think they’ve diverted from Coles, they did okay. Bunnings and Officeworks.

Gene Tunny  48:03

Right. Okay, so they’ve got some retail businesses in Australia.

Rachel Baird  48:07

And then, they got the chemicals part in their fertilizers partners, WesCEF.

Gene Tunny  48:12

I know that at least one of the major supermarket chains is trying to have it all of its energy, renewable energy, by some date, and I think they’ve signed some agreement with the clean energy company here in Queensland, if I remember correctly, I’ll try and find some information about that.

Rachel Baird  48:29

That’s really smart because you’re going to get customer loyalty. So, a lot of my friends who don’t work in law at all, but they ring me up and they say, oh, shop here, because that’s an environmentally friendly company. I don’t always take it on face value. I like to investigate and make sure they actually are. But it’s a great PR tool if you’re accurate. If you’re not accurate, you could be in front of the court.

Gene Tunny  48:52

That will cost you …I mean, if you’re making bold claims, like Volkswagen years ago, I mean, they got into trouble for what they were alleging about emissions, didn’t they? They were doctoring or they were manipulating their test results on the diesel engines, okay.

 I’ll just ask you finally, about this article that Stephen and I both found independently, it was published in the Financial Times, and then it was picked up by the Australian Financial Review; how ESG investing came to a reckoning. This is the sort of thing you expect to see in the Financial Times – very good paper. The term ESG is less than two decades old, but it may already be coming to the end of its useful life. Have you had a look at that article at all, Rachel? And any thoughts on that?

Rachel Baird  49:48

I did. Steven, do you want to start?

Stephen Howell  49:49

I think that’s just a way; what I read into that, Gene was that it was a way to, once again, highlight ESG, to say, it’s been around for a long time, we haven’t really sort of made too much of a movement. But really, we have. This what I read into it that it was a way to heighten the level of understanding of ESG. I don’t agree with that comment that it’s not going to be around, I think it’s going to be around for a long, long, long time. And it may even change shape in some way. But I think, from the way I look at it, Gene, from a governance perspective. And as a forensic accountant coming out in me, looking at the evidence and looking at the impact that ESG will have from a governance point of view, I just think it’s just that another level of good governance practice.

Gene Tunny  51:06

Okay.

Stephen Howell  51:07

That’s the way I’d describe it.

Gene Tunny  51:09

Yeah. I just thought I’d ask because this article is getting shared around a lot, and particularly by economists, who say, I’ve been saying this all along.

Rachel Baird  51:18

That’s interesting, because a couple of weeks ago, there was a Financial Times conference, where a very senior banker at a bank whose name escapes me, made a comment about how those hysteria carry on and it’s the same as like Y2K, and I think he got stood down, didn’t really test the waters. So, this might be the Financial Times way of saying, it’s a movement that’s come and gone. I think it’s not, there’s so much to do, like, we don’t even know what the implications are of lithium, like, is that actually going to be environmentally friendly? We don’t even know; there’s movements about green steel, we don’t know what the impacts are of all the cloud-based servers in the American desert. So, there’s so much more potential to understand what we’re doing. And every time we have a decision to reduce our impact, we don’t know what the trigger is for more impact.

This is not why we’re here and we’re aware. I mean, we can say that we’ve evolved as a species. And going back to my polar exploration, when mankind, because it was men first started exploring, they just left their rubbish in Antarctica, that didn’t take it back, right? So it’s taken years and years to clear those rubbish dumps from Antarctica, because it doesn’t degrade, right? There’s nothing to degrade it. So, we’ve just evolved as a species to understand that we can’t just keep polluting our environment, and keep abusing our people. That’s not going to go anywhere.

Gene Tunny  52:47

Yeah. And that’s why we have regulations and laws.

Stephen Howell  52:54

It’s like that concept, Gene, that I’ve been sort of, looking at closely recently about the consequences of decision making. And, the decisions that you make in respect to whatever the issue might be, what are the consequences? What are the likely consequences into the future? And so, we’re talking here about, ESG and environmental issues, what are the consequences, many decisions that we make in respect to our environment. The consequences of the decisions that we make in respect to the social impact within Australia and also corporate governance issues. I think you might be aware, I just said, there’s a fabulous book that I’m reading at the moment called Leadership by Algorithm.

Gene Tunny  53:45

Yes, my mother bought it for my birthday based on your recommendation.

Stephen Howell  53:57

It’s written by Professor David de Cremer. It’s all about artificial intelligence, but he does talk a lot about the consequences of your decision making. And he relates it to real life stories. It’s really interesting stuff.

Gene Tunny  54:16

I’m going to read it. It does look great. And I’ll see if I can get him on the program.

Stephen Howell  54:26

I think it’d be great to; he told a fabulous; I went to a conference that he spoke at, he related that to a to a decision that was made by the Singapore government, in respect to the COVID app.

Gene Tunny  54:49

Yeah.

Stephen Howell  54:52

And the COVID app in respect to identifying where people might be at any point at the time, so that they could be tested, etc. And then what happened there in Singapore is that the Singapore government then decided to go one step further and use the information for law enforcement. I am sure it happens in other jurisdictions as well. But it was only the Singapore government got caught. I’m sure we got closer in Australia, there might be something similar. It’s interesting, isn’t it? We think that okay, the government is going to do this for us, to help us, but we had no idea that we’re going to move further and use it for war enforcement purposes.

Gene Tunny  55:44

Yeah, okay. I just thought I’d bring up that FT article, because it has been shared around a lot. And I’ll put a link in the show notes, unfortunately, as paywalled, though, but anyway, I’d recommend getting a subscription to the FT if you don’t already have one, if you’re if you’re listening. I just what I did want to point out was that, one of the factors is this war in Ukraine, which is arguably making it more difficult for companies to meet ESG goals. I’ll just read this out before we wrap up.

On top of the allegations of greenwashing at the industry’s highest levels, there is the impact of Russia’s invasion of Ukraine, which is forcing companies investors and governments to wrestle with developments that at times appear to pit, the E, the S and the G against one another. For example, governments in Europe are reneging on environmental goals by turning to fossil fuels to reduce dependence on Russian gas in order to fulfil ethical goals because they don’t want to buy it from the Russians. They’ve got someone who’s a managing partner at Lombard od air is it? I probably mispronounced that.

The war in Ukraine is an incredible challenge for the world of ESG says Hubert Keller. This conflict is forcing the questions; what is ESG investing? Does it really work? And can we afford it? And that’s what we’ve been talking about today, Rachel.

Rachel Baird  57:07

I know; what it goes to that whole social issue, if you really want to take the high moral ground and the UN’s involved, and we’re not political. I’m not being political. But if you’re saying what Russia is doing in Ukraine is hugely immoral socially, because of the civilian casualties? Then that’s highlighting a failing of the whole international community to try and do something for social good. And I mean, I know you can’t just stop the war because you can’t take action against Russia, because then you’d have world war three. But you can see how ESG can just apply to any conversation, right? So don’t think it’s failing. I think it’s just showing how complex it is. Because there’s so many levers and there’s so much human interaction.

Gene Tunny  57:50

Exactly. And there are tradeoffs. And I mean, this is what economists would say. And ultimately, the companies have to be sustainable financially, so they can keep people employed, they can keep operating, and so if you can do these other things, and then that’s great, but fundamentally, that’s what they need to do. They need to produce products that people want to consume.

Rachel, we should wrap up. Any final words, I mean, anything you’d like to say anything you’d like to push back on anything? If you want to push back on anything I’ve said? Or if you’ve got other points you did want to make that haven’t been made, then please make them now.

Rachel Baird  58:27

No, I think what I’d like to; if your listeners if there’s anyone out there go, where do we start on this ESG journey? Is to just get the right advice from the right people who actually have the right credentials. Because there is a lot of; there’s a vacuum, we need skills on ESG, and the vacuum has been filled, and it’s not being filled equally, if you know what I mean. So, if you want to start embarking on this journey, or you want to have a critical conversation on ESG, do some reading yourself first, but then really test the credentials of the people that you’re talking to. Because you can’t afford to make a misstep on this now that we’ve got the heightened scrutiny by regulators and also stakeholders, which are not just shareholders on what you’re doing. So, I guess, I get a bit cynical that there’s the people who suddenly go, Hey, I’m an ESG expert, and I’m going, yesterday, you were, like a corporate lawyer. You can’t just be an ESG expert overnight. So, people please, look for someone who knows what they are.

Gene Tunny  59:26

So, you need the experience?

Rachel Baird 

I think you do.

Gene Tunny 

Do you need specific training?

Rachel Baird  59:30

Not necessarily. I’m talking to some people at the moment who are experts in greenhouse gas emissions measurements, right. So, it’s a huge ecosystem of talent from environmental scientists to accountants, who are forensic accountants to lawyers to bankers, so pick the person for the problem you’ve got at the time. So, it’s not particularly credentials, just matching. So don’t think you’re going to get one person to solve your whole ESG problem. It won’t happen

Gene Tunny  59:59

Okay.

Stephen Howell  1:00:02

That’s why we have an expert in Rachel.

Gene Tunny  1:00:06

I’ll put links to effective governance out of the hub good Ganon. Lawyers here in headquartered in Brisbane, but you work or live in Australia, you probably work internationally as well.

Rachel Baird  1:00:19

Yeah. I’ve practiced in most, a lot of different states in Australia, because we have environmental law, is state based, is Commonwealth based, it’s international. Again, you’ve got to understand how they operate. It’s quite complex.

Gene Tunny  1:00:35

I have to come back to environmental law. There’s so much of our law that’s driven by these international agreements and rams are and all of that, but that’s a topic for another time.

Okay. Rachel Baird and Steven Howell from Effective Governance; I’ve really enjoyed this conversation. Thanks so much for your time and your great insights. Really appreciate it.

Stephen Howell  1:00:59

Always great to be with you.

Gene Tunny  1:01:01

Thanks, Stephen.

Rachel Baird  1:01:03

Thanks, I really appreciate the chance to talk about something that I’m passionate about.

Gene Tunny  1:01:08 Okay, that’s the end of this episode of Economics Explored. I hope you enjoyed it. If so, please tell your family and friends and leave a comment or give us a rating on your podcast app. If you have any comments, questions, suggestions, you can feel free to send them to contact@economicsexplored.com and we’ll aim to address them in a future episode. Thanks for listening. Until next week, goodbye.

Credits

Big thanks to EP145 guests Rachel Baird and Stephen Howell, to the show’s audio engineer Josh Crotts for his assistance in producing the episode, and to Peter Oke for editing the transcript. 

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored. Economics Explored is available via Apple PodcastsGoogle Podcast, and other podcasting platforms.

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The Go Woke, Go Broke hypothesis w/ Darren Brady Nelson – EP139

I had a great conversation with regular Economics Explored guest Darren Brady Nelson on the Go Woke, Go Broke hypothesis in episode 139 of the podcast. I’ve cut a couple of clips (see below) from the video of our Zoom conversation so you can quickly see some of the highlights.

You can listen to the conversation using the embedded player below or via Google PodcastsApple PodcastsSpotify, and Stitcher, among other podcast apps. A transcript and relevant links are also available below.

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored. Economics Explored is available via Apple PodcastsGoogle Podcast, and other podcasting platforms.

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