Atelier WeekNotes w/c 20 Jan 2025
Immortal Address in memory of Robert Burns. investment principles for the next ten years.
The first WeekNote of the year is not what I was promised to write in the last WeekNote of 2024 (one on trends and my sense of what is going on, and then a second on the performance of the Atelier in 2024, and intentions in 2025). I have had a series of deadlines that have got in the way, including a new term in UCL.
This WeekNotes has two deliverables for two deadlines:
Immortal Address in memory of Robert Burns.
Theme: it is possible, in tough, uncertain and revolutionary times, to live our lives as artistic expressions of our deeper selves. Sections:
Introduction.
His times.
His life.
Life as expressing something deeper.
Riding the turbulent politics.
Celebrating the particular, not the universal.
Our current challenge: swimming in bullshit.
Let us live our lives as expressions of our deeper selves, despite the times.
Investment principles for the next ten years.
The brief.
The method: engagement.
Considerations: the user, the wider world, the need.
Users – financial institutions: weak incentives to take a risk on the new.
The wider world: severe headwinds AND great tailwinds.
The need: create a flywheel.
Evolution of ‘responsible investment’: responsibility, sustainability, industrial revolutions?
Updated and more ambitious investment principles.
Do No Harm: the existing UN PRI Responsible Investment Principles.
The ‘Industrial Revolutions on a deadline’ Investment Principles.
Would love your feedback on either or both!
Note: there is some light editing and additions to the Investment Principles section compared to the emailed version.
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Immortal Address in memory of Robert Burns
This Burns' night I was asked to give the Immortal Address. My theme: it is possible, in tough, uncertain and revolutionary times, to live our lives as artistic expressions of our deeper selves. The text is below. (Except where otherwise noted, my sources are the In Our Time episode I mention and the Wikipedia.)
Introduction
Good evening. Thank you for the invitation to speak..
When asked, I had to actually look up what the immortal addressed means, and I found out that it is the main speech, a testimony to the life and legacy of Robert Burns. I also found an instructional video on YouTube which told me how to create my own immortal address:
Read two biographies of Burns
Choose a theme
And then just keep it to 15 minutes, because that's all an modern audience can deal with.
So, strap in, everybody!
As it happens, I didn't have time to read two biographies of Robert Burns.
So, I turned to turned to those two most trusted sources: an episode of BBC Radio 4's In Our Time and the Wikipedia page. (I didn't use chat GPT. In my work at UCL, we tell the students that it is like the bright friend who likes to show off down the pub. Sometimes it's right, but oftentimes it makes things up.)
So I listened to the episode and read the Wikipedia page. And I found my theme.
Right up front I'm going to tell you what I'm not going to talk about.
I'm not going to talk about how Burns had at least 11 children, nine of them with his wife, two of them out of wedlock, and he also out of the nine that he had in his wedlock through marriage, only three of those survived infancy.
Because of his dalliances outside of his wedlock, he had to stand for rebuke on three Sundays in his local church. He died when he was only 37. Not, as you might imagine, from sexual exhaustion or from being tired out from all those children. Instead, from ill health, something he'd suffered from since his 20s.
That’s what I’m not going to talk about. Instead, when I went through his life and went through his times, I actually did find a different kind of theme.
Burns showed that it is possible, in tough, uncertain and revolutionary times, to live our lives as artistic expressions of our deeper selves. Burns' Immortal Memory can inspire us to do that.
His times
So first, let's unpack and understand bit more about his times. He was born in 1759, died in 1796
In that brief almost 40 years, lots of different kinds of things happened which still echo through to now [dates below taken from Wikipedia].
The American Revolution, 1775 to 83.
The French Revolution. 1789 to 99.
The start of the Industrial Revolution, which Wikipedia starts in 1760.
The first phase of the Highland Clearances, which started in 1760.
There was also the Scottish Enlightenment, with Adam Smith in particular, publishing The Theory of Moral Sentiments in 1759 and Wealth of Nations in 1776. Apparently Smith was quite an influence on Burns' own philosophy.
So this was a time of great change, of uncertainty, of revolution and indeed, of censorship. A Scot had to be careful about what they said, about the American Revolution, about the French Revolution, about the king. There was a period of time when Burns himself was under investigation for what he was saying.
His life
So then let's sketch out his life.
He was born to a liked, but basically ineffectual, farmer who had to keep moving around his family. He only had a sporadic education, much of that at home.
He tried various ways of earning money, including being a flax dresser. And he was apprentice flax dresser. I'm not quite sure what a flax dresser is, but I imagine it involves dressing flax.
Unfortunately, the factory where he was learning to do his flax dressing bent down during a New Year's party where he was one of the many people who were there. So he had to come back to the family farm.
He himself was a farmer for a period of time, but he was, by all accounts, pretty rubbish at it. He was about to migrate to Jamaica to work on a plantation, what he said himself was "a poor Negro driver".
Throughout all that time, he was writing poetry. And he started writing poetry in his early and mid teens, basically away as chatting up girls. Men!
As he was about to go to Jamaica to pay for his passage, a friend of his suggested that he pull a book together and get it published via subscription.
That book itself was such a success, and it took Scotland by storm. He was able to go down to Edinburgh and lived there for a time, where he was the toast of the town, with many people from across the England coming to pay homage to his poetry and to the man.
Even so he had ongoing money troubles, in part because he was helping out with his brother. He felt under great pressure to perform after having the first breakthrough album, as it were, the second and third albums were all the more hard.
So he left Edinburgh, went to Dumfriesshire, where he worked as an exciseman, so a tax collector. He kept writing through all of that time, eventually he died whilst always having money trouble.
Life as expressing something deeper
So that is a life, a life for 37 years, and it was a tough life in uncertain and revolutionary times.
And even so, it was an artistic life which created poems and songs that still move millions over 200 years later.
Burns was able to express something about himself and his world, which was very particular, in a language which few other people spoke, often in some kinds of Scottish dialect. But even so, that resonated with people then, far beyond his part of Scotland, and resonates with people now, in a completely different time.
Riding the turbulent politics
He had a somewhat complicated politics and somewhat obscured politics. So he certainly wrote an ode to George Washington, something about celebrating the American Revolution, and he was perhaps supportive of the French Revolution. But he also enjoyed dining with English lords.
For some of the people I've been reading on the internet, it's clear that Burns was a supporter of the French and American Revolutions. For the more careful academics on In Our Time, it's a little it's it's more occluded. So maybe he was concerned about being arrested. Maybe he was somebody who just stayed above the fray and didn't commit on such issues. Maybe he was somebody who could ride the ride the wave of uncertainty, or maybe he was even genuinely torn.
We don't know, but what we do know is it's not completely possible to pin down his politics.
Celebrating the particular, not the universal
We can know about his poems and his songs. They have a spontaneity, a directness, a sincerity, a wit about them that is rare and shines out even many decades later.
And when it comes to the songs, apparently, he absorbed and took many traditional songs and sort of transmuted them using his own voice. So there was something about inhabiting the past, and bringing it into his now.
And what innovation scholars call bricolage, using what is to hand, assembling something different out of from what, but from what came before.
And this goes to show you don't need to be utterly novel to be utterly compelling and lasting with your work.
For the poems, the very first book was called "Poems, chiefly in a Scottish dialect". And interestingly, that's kind of the opposite of how you would talk about your work at that time if you wanted to succeed.
This was in the blushes of the Enlightenment and the industrial revolution, where there was a great deal of standardization. Under the Industrial Revolution: standardization of screws and other kinds of technical implements, physical things. Under the Enlightenment and the growing power of the modern state, a standardization of language and all kinds of things like that, in the words of James C Scott, make society more legible to the state (more here). And indeed, and Adam Smith argued that we would need to have one global language in order to have seamless international trade.
Universities at the time were arguing and pushing for their students to learn proper English, and local dialects were being eroded away, and yet still, that is what he wrote in.
So to write chiefly in the Scottish dialect was a radical and counterintuitive act, and I think that gives Burns's work a groundedness and a directness that contrasts with what you get from the more enlightenment work, which is more abstract and attempts at universalisms.
I think this is one of the things which makes Burns' work alive at the time, and an inspiration over the centuries.
So we know that the Romantics took and were inspired by Burns to consider nature and consider direct experience (and also as a counterpoint to the dark, satanic mills of industry).
We know that across Europe, nation-building movements took inspiration from Burns and used keeping and codifying their particular language to build their imagined communities that went on to be nations through the late 19th century and into the 20th century.
There are some also surprising inspirations and situations. So A Man's A Man For All that was a key song in the 1848 revolutions that swept around Europe, and also from 1918, onwards, the German translation was a key song for the German left
Also on The Long March, which was when the Red Army retreated during the Chinese Civil War, the pivotal moment in which Mao became in charge of the Chinese Communist Party and eventually the retreat then led to them being able to win and push out the nationalists. Their key song on their 1000s of miles of marching was My Heart's In The Highlands. Robert Burns provided their go-to song.
Thinking about today, we live in a period of strong globalization, of economics, of information and culture, and of issues like climate change. Even so, in my work there's a push to engage with the particular and local, this place here and now with these people and this dynamics which is different to that place context over there, with its own people and dynamics.
Noted French philosopher of science and technology, Bruno Latour, when writing about what we need to do to address climate change in Down to Earth: Politics in the New Climatic Regime, talks about we need a science of the six feet of soil, not a science of the moons of Saturn. So not an abstract science just trying to take a completely objective view, but a science which is grounded in this place and this now.
We also know that many of the developing responses to the challenges of biodiversity, climate adaptation and air pollution have to be and are increasingly local in their particulars.
And my own work with one of the global climate NGO called the Climate Group, we found that there's a shift from committing to global goals to acting to achieve those goals. When it comes to implementation, all implementation is local. And that's because if you're wanting to have 100% renewable power or 100% electric vehicles you've got in sport, got to install those solar panels. You've got to install that charging station. You have to have an electric vehicle fleet in this place. (More on that experience here.)
So, I'd claim Burns has historically been an inspiration to people wanting to preserve and celebrate their particular place, language and culture. And, now, as a response to today's pervasive gloablism, there is a turn towards focusing on and celebrating the particular.
Our current challenge: swimming in bullshit
In my view, for at least next four years, we'll be swimming in even more bullshit. I mean that in a very particular way.
Harry Frankfurt wrote a book On Bullshit where he says bullshit speech is intended to persuade without regard for the truth.
So both someone who's a liar, a deliberate liar, and someone who's trying to tell the truth, are both fixated on the truth, one to avoid it, and the other to tell it.
But a bullshitter does not care about the truth. They just want to spread so much bullshit around that they get to happen what they want to have happen.
And of course, over the last decade, we've experienced this a lot, not least in the Brexit referendum and all the kerfuffle around the £350 million that would go to the NHS.
But Trump is something special. He is a world leader in bullshit, and he was inaugurated as President earlier this week. So we are going to have many years of having to deal with his bullshit, and of all of his enablers and hangers-on and other members of his court.
So how are we to cope? I am trying to take inspiration from something closer to our time, and in particular, Vaclav Havel, the writer and activist who went on to be the first president of Czechoslovakia after the fall of the Iron Curtain. He lived in a parallel but different circumstance.
He was in an authoritarian regime which tried to control all information and opinion. We live in a bullshitting time, which is trying to confuse and distract and exhaust us of any understanding of information and opinion.
In Havel's book, The Power of the Powerless, he argues for living in truth that we have a choice and a responsibility to differentiate ourselves from the officially mandated culture and make our own choices so we don't automatically join in. We don't automatically reinforce the culture that's around us.
And so for us, I think in this time of bullshit, we do not have to play the bullshit game by responding and reacting to each new utterance. We can be grounded in our own reality and believe our own eyes, on whether that was a Nazi-style salute and so on.
Let us live our lives as expressions of our deeper selves, despite the times.
And that takes me back to Burns, who lived in his truth despite tough economic times, an industrial revolution and great political turbulence, which focused which had censorship and punishment for disloyalty.
He expressed his truth in poems and songs which speak to us and move us 200 years later. He did this by finding his own voice, assembling from the particulars around him, the past songs and the dialects, and using the tools of the time -- the printing press and the Enlightenment salon -- to inspire people to live out and protect their own particular in the face of the deep, long shifts in our lives.
Now we exist in tough economic times during an industrial revolution of AI and electrification, with political turbulence not focused on censorship, but bullshit and, in the US for now, punishment for disloyalty.
We can be inspired by Burns to live in our truth, find our voice from the particulars around us, and use the tool of our time, to inspire others, and to inspire ourselves.
Ladies and gentlemen, and all those otherwise, a toast. To living our lives as artistic expressions of our deeper selves, even in tough, uncertain and revolutionary times.
To the immortal memory life and legacy of Robert Burns.
Great chieftain o the puddin'-race.
Investment principles for the next ten years
Note: there is some light editing and additions to the Investment Principles section compared to the emailed version.
The brief:
“Taking the PRI’s principles below as a starting point, please draft an updated and more ambitious set of investment principles that are fit for the period to 2035 in light of the Sustainable Development Goals and the need to halve global carbon emissions by 2030.”
I was given 5 minutes and 5 slides to give my answer.
How I approached the brief: engagement.
Considerations: the user, the need, the wider world.
The evolution of ‘responsible investment’: past, present, future(?)
Draft updated and more ambitious investment principles.
How I approached the brief: engagement
Spoke with a bunch of folk. That said, all conclusion and errors are mine.
Considerations: the user, the wider world, the need.
Users – financial institutions: weak incentives to take a risk on the new.
Complain about the number of overlapping-but-different frameworks/standards/requirements.
Experience many responsibility requirements as the cost of existing, but not ‘really’ value generating.
Too much effort into disclosure; too little on investing.
Those who are trying feel threatened by legal requirements and political backlash, especially in the US.
Many ‘don’t know what they don’t know’. Still behaving as if climate and other issues are a choice, rather than a necessity for a dynamic global society and economy.
Why act when there is such a mis-match of time horizons?
Incentivised for short-term wins, even if that erodes long-term returns.
The sustainable option likely has stronger returns in long-term, but that’s too late.
The wider world: severe headwinds AND great tailwinds.
Geopolitical fragmentation, rise of populist protectionism.
Incumbent oligarchs (often with strong fossil fuel ties) and fossil fuel countries trying to hold on to the power, status, income and wealth that they have, using any means necessary.
AND ALSO Industrial revolutions already underway:
Renewable electrification: potential for abundant, cheap energy for all.
AI: potential for vastly increasing cognitive capacity of global society.
The need: create a flywheel.
Create a ‘flywheel’ for a Second Deep Transition. The parts of the finance system that serves our planet and its people are consistently out-performing the rest, and resources ‘defect’ from old to new finance system. (More on the flywheel metaphor here.)
Also, any new investment principles would need to be co-created with users.
(You can read my reflections on the recent conference on Deep Transitions here.)
Evolution of ‘responsible investment’: past, present, future(?)
My claim about the field of responsible investment:
The initial framing was 'Responsibility', with the push at investors "you break it you fix it". Leading investors would ask themselves 'what is my impact on this issue?". The main tools: were excluding the worst assets from portfolios pushing for disclosure and so on.
This became a framing of 'Sustainability'. The push at investors: "How will you succeed in the future?". Leading investors asking themselves not about their impact on the issues, but the issue's impact on them.
I'm arguing for a framing along the lines of 'Industrial Revolutions'. The push: "how will you win by joining in the industrial revolutions?".
My rationale behind creating this new framing:
We need to create strong incentives for investors to take risks.
We need to create a flywheel of positive feedback loop which means that the parts of the finance system which are serving people and planet outperform the rest.
For what it is worth, I'm not convinced by the name 'Industrial Revolutions'. But that's where I got to.
There are two initiatives I know that are playing in the new framing: TransCap and Deep Transitions Lab. They use a framing around 'systemic', which I think appeals to sustainability-geeks much more than mainstream investors.
Draft updated and more ambitious investment principles.
Do No Harm: the existing UN PRI Responsible Investment Principles.
Keep the existing principles:
Avoid annoying folks who are just getting used to them.
Give an entry level for those who need it.
The ‘Industrial Revolutions on a deadline’ Investment Principles
The idea is that these principles would the next tier, for investors who want to win big while making a better world along the way.
ADDRESS RISK. We will act on the understand that there is currently a high risk of crossing tipping points which threaten the stability of the Earth, on which all our investments depend. (Example: implementing the findings of the Planetary Solvency report.)
GRASP OPPORTUNITY. We will invest in the industrial revolutions which are creating a dynamic global economy for all, within planetary boundaries, now and for the long-term.
CREATE CONDITIONS FOR SUCCESS. We will act to create the context for a financial system that succeeds by serving our planet and its people, including: engaging our beneficiaries; influencing industrial policy and financial regulation; promoting sectoral collaboration; and, being transparent for accountability.
ANTICIPATE TURBULENCE. We will prepare for disruption and difficult headwinds by: investing for multi-layered resilience (regional, national, sub-national); robustly and pre-emptively defending the legal space required; adjusting the priority risks based on emerging science; and, learning quickly from experience.
Obviously they are wrong, but hopefully in useful ways. For instance, the last two are very big buckets.
Some extra notes.
When I reached out to people, individuals had some specifics which they were concentrating on.
Specific risks.
Water risk. Many supply chains are exposed to water risk. Droughts that mean factories cannot produce the goods. Floods which knock out chip fabrication labs. That’s before you get to the knock-on effects on food prices and where people (from a business risk point of view, staff and customers) can live. Also, often climate risk gets flattened to just ‘how can we reduce greenhouse gas emissions. Paying attention water risk is a way to open up climate risk (which already has legitimacy and attention) to other impacts (like biodiversity).
Soil, regenerative agriculture and biodiversity. A lot of people came back with a specific focus on these three. To some extent, this reflects a sense of what we need to make sure keeps function, even as the climate potentially goes through tipping points.
My response: I agree that these are important risks. I thought it best to fold them into a larger point about addressing ‘Planetary Solvency’ risks, rather than choosing one over another.
Fiduciary duty. A number of responses were about the need to grow (or just protect) the notion that fiduciary duty does not prevent ‘responsible investing’ (in all of its different forms). Indeed, the size of sustainability-related risks (like climate change) and growing established and wide-spread ESG practices mean that fiduciary duty requires some kinds of responsible investing approach.
My response: agree. And my strong sense is that the fiduciary duty argument is being used by the incumbents to prevent creative destruction towards a renewable energy world. There is no amount of evidence or logical argument which will kill off their zombie arguments. The way to overcome them is to bring others into the fold, rather than trying to convince those acting in bad faith.
Change strategy
Many doing a little better than a few doing a lot? One person pointed out that we have the straightened economic circumstances, with financial flows into public markets stagnating, and strong political headwinds. For them, the two implications:
Get more into Private Equity. (My response: Agree.)
More impactful for more to do little than few to do a lot.
My response: I think this is an interesting choice point.
Option (A): get leaders to go further, hope they have outsized returns from big bets on ‘Industrial Revolutions on a deadline’, and then the herd wants to follow.
Option (B): get followers and laggards to be better, more financial capital into incremental innovations, hope some consistent (but not outsized) financial returns and impacts.
(A) looks all or nothing and (B) safer. But I fear there are lots of other (non-sustainability) incremental innovations which look more certain for similar rewards. Wonder if (B) is more risky than it seems.
Focus more on what gets insured. Financial capital only flows at scale to assets which can get insurance. An under-used leverage point is reducing access to insurance (at least: make the premiums eye-watering for eye-watering risks). That will re-shape the flow of capital.
My response: Agree.
“Industrial revolution on a deadline”
I have been using that phrase for about a decade. I thought I read it in Tim Foxon’s Energy and Economic Growth: Why we need a new pathway to prosperity (Routledge Studies in Energy Transitions). But I now can’t find that phrase in the book at all. So, maybe I made it up. Who knows? (Not me!)
Anyway, let me know what you think!