Reasons for Optimism
“It’s a scary time to be alive,” opened Lily Cole, model, actor, and filmmaker, on the mainstage at Money 20/20 Europe in June.
Beyond her work in the fashion industry, Cole is deeply committed to social and environmental causes, which led her to explore sustainable business and financial technology – and the Money 20/20 stage.
In conversation with President Tracey Davies, Cole leverages the insights from her book, “Who Cares Wins,” to dive into the crucial intersection between technology, finance, and social impact.
We here at Fintech Is Femme are no strangers to the potential of fintech for social good, sustainable business models, and financial inclusion initiatives to empower and uplift underserved populations.
But from Cole, I learned that advocating for a future where others’ well-being is not just a moral imperative but also a pathway to success in the modern world is more than just a nice thought – it’s a goal we can all strive towards.
It’s an incredibly daunting time to be alive, but it’s also interesting to be discussing money as an agent of change at this moment.
Money is a universal language that influences our social environment to some degree in every moment – for better or worse.
In that realization, I see a lot of potential. We can rapidly create systemic and global change through how our monetary system works, where the money flows, and the changes already taking place.
This kind of systemic, local change needs to happen quickly to give ourselves, future generations, and other species a chance at living on this planet.
Navigating the tension between sustainability and the economic system
A recent report from Deloitte made a startling prediction: if the world does not act quickly to combat climate change, the global economy could lose an estimated $178 trillion in the next fifty years.
On the other hand, they argued that if we switch to a net zero trajectory, we could gain an estimated $43 trillion over the same period.
These figures alone make it clear that the current system is neither economically nor environmentally sustainable.
This raises the question: can capitalism be made sustainable?
While this is a huge question – far too complex to answer in this newsletter right now — it’s clear that various solutions and perspectives are available.
For example, it’s been proposed that economic growth does not need to be linked to carbon emissions, and in fact, advanced economies like the U.S. and parts of the E.U. are already beginning to decouple the two.
Evidence suggests that global emissions intensity, or the amount produced per unit of GDP, is also decreasing, which is a hopeful sign for the future.
What’s more, it’s not just growth we should strive for but growth in sustainable business practices. After all, in the long run, these are the ones that will benefit us most.
New metrics for success
While economic growth is undoubtedly an essential measure of success, we must be mindful of the type of growth that we are pursuing.
As far back as the 1930s, the same business which created the concept of GDP warned that growth must be carefully monitored and measured for its quality, not just its quantity, and yet, here we are 90 years later, still struggling to accurately assess and prioritize the type of growth that will yield the best outcomes for humanity.
Fortunately, companies, countries, communities, and individuals are all beginning to view growth holistically, understanding that GDP or profit may be necessary.
Still, numerous other metrics should be considered to ensure we are progressing rather than stagnating. It’s time to heed the warnings of the past and strive for quality growth, not just a quantity of it.
Widening the metrics
Partha Dasgupta, an economist commissioned by the U.K. Government, published an interesting report called the ‘Economics of Biodiversity’ a few years ago.
Cole had the chance to meet him at university and shared his analogy that demonstrated our market failure in measuring success.
He said that if we measure success only through GDP, it would be like a football team only counting the goals they score and not the goals they lose.
This illustrates our narrow view when assessing value and success, and we must broaden the picture. We also have to consider the goals we are scoring that we aren’t even counting.
Currently, GDP doesn’t consider factors such as the volunteer economy, the care economy, the ability to benefit from an ecosystem, or the health of nature. We must take a much broader view and consider those aspects of success too!
Positions of power
After two decades of working in fashion, Cole has enjoyed observing the vast progress in the supply chain and business models. For her, it’s been inspiring to witness the collective realization amongst people from all walks of life that we must address an environmental crisis, which was all too evident 20 years ago.
Recent initiatives such as the World Economic Forum’s manifesto and the B Corp movement demonstrate that it isn’t just activists calling for change but those in a position of power who are beginning to see the need for reform on both a moral and financial level.
“All in all, I’m confident that consciousness is ever-growing and that solutions to our shared issues are being tested and implemented creatively and progressively,” Cole said.
It’s becoming increasingly clear that science is showing us exactly how dire the situation is, with emissions continuing to rise yearly despite a brief dip amidst the pandemic.
It’s a dangerous place to be, and it’s unrealistic to think that there’s a single solution to fix it.
Instead, we need a variety of experiments and pilot certifications – and the fact that these solutions are being explored and implemented reflects our desire to move away from Milton Friedman’s famous maxim that the sole responsibility of business is to make a profit.
The rules of the game must change if we’re to create real, tangible change – and this change won’t come from physics or science but from consumers pressuring businesses to do better.
With a capitalist framework, we all get to vote with our wallets, choosing which companies to support and which suppliers and organizations to work with.
This power and language are empowering and suggest that many of us have more agency than we realize.
Unfortunately, those who do not have access to money have very little influence on the global conversation. However, for those with access to wealth, there is a lot of power and responsibility to nudge the system.
We see consumer, employee, policy, and scientific pressure contributing to the discussion. Ultimately, those with more access to this power are more responsible for using it responsibly to benefit our ecology and human welfare.
Transparency to avoid greenwashing
Greenwashing has become commonplace in today’s society. Companies and individuals are so scared of not doing the right thing that they often do nothing. It’s almost comical to think that merely changing the color of a logo is enough to pass as being “green.”
And yet, we’re seeing it more and more. While this is ultimately a symptom of a more significant issue of environmental awareness, it’s a peculiar moment we’re in as we don’t yet have the tools and data points to verify green claims.
As a consultant, Cole has enjoyed working with a few companies trying to become more sustainable.
“It struck me how few of them knew they could be impact neutral – they were trying to, for example, take a fashion brand with a huge, spread out supply chain and couldn’t even figure out where the majority of the impact was created; be it farms or petroleum based fabrics,” she said.
“It’s downright shocking how little transparency exists within our supply chains.”
That’s why Cole has been working together with the UNECE on a pledge to create a dialogue about the issue – something that concerns politics, technology, and business opportunities all at once.
The goal is to create proper transparency within our supply chains so that companies can better understand their impact and consumers can make informed decisions based on verified information.
The onus on perfection challenge
It’s easy to be intimidated by the need for perfection. It’s a feeling that’s experienced on both an individual and corporate level, but the truth is perfection is impossible.
We shouldn’t use the perfection standard to shut down climate change conversations.
Instead, we should be encouraging honest dialogue. Companies don’t have to pretend to be perfect or hide their areas of limitation and failure.
Instead, we should be engaging in a grown-up, adult conversation that is honest and open so that we can all move forward and make progress. It’s time to get honest about climate change and move towards a solution.
It’s often used actually to shut down the conversation. Stop trying to be perfect, and start learning and taking action.
Technology for good
Remember that significant reduction in emissions from GDP I mentioned earlier? A big part of that is thanks to technology and its advancements.
Cole firmly believes that technology is central to our efforts to decarbonize the economy and thrive within the capitalist framework.
We have exciting prospects like quantum computing and electrification, to name a few. But let’s not forget that on a deeper level, we must be cautious not to become apathetic and simply rely on technology to solve everything.
There’s no silver bullet, and many promises are yet to be fulfilled. We need to question whether we can achieve the lofty goals, like the nuclear holy grail the community hopes for.
So, I’d be careful not to place all our hopes in technology and instead make room for the power of nature for concepts like rewilding.
I believe hope isn’t just wishful thinking, waiting for someone else to swoop in with a magical technology fix. Hope comes from action, from realizing that each of us has a role to play, no matter how big or small, in addressing this existential crisis we find ourselves in.
We are living through an extraordinary moment in history, facing existential risks, but it’s not a time to be overwhelmed into inaction; it’s a time to rise and face the challenge.
Humans are an innovative species capable of incredible things.
We’ve achieved remarkable feats in the past, and we can rise to this challenge too.
“Imagine going to our deathbeds, knowing that we contributed to solving this problem and made a difference. That feeling alone should inspire us to take action and be part of the solution,” she said.
This is the essence of working in fintech. What legacy will you be proud to leave behind?