Our world dancing on the precipice: a time for introspection and change

Our world dancing on the precipice: a time for introspection and change. Photo: Shutterstock

However, it is but one chapter in a greater unfolding tragedy of climate emergency, massive biodiversity loss and rapidly-growing inequalities. The damage this could wreak on us all is enormous, far bigger than anything we have experienced so far.

We have disregarded these underlying issues for too long. Before the coronavirus, we were content to ignore what the science was telling us. Nearly 30 years after the Rio Earth Summit, when climate change and biodiversity were put on the United Nations agenda, there have been many worthy reports, initiatives, and declarations. All were well-intentioned but in truth, all the reasoned argument, science, and ambition have not moved us on much.

I would say that over the past few years, there has been an increasing recognition of the need to act. A recognition that we have been content to think about the flows of benefits nature and society give our economies, but that we have not paid attention to maintaining the stock of natural and social wealth that give rise to these flows. As a result, we have eroded to dangerous levels the things we depend on for our prosperity. There is no prosperity on a dead planet and economic success will elude us if our societies fail. For us businesses, if we do not solve this, our liabilities will be beyond measure and our assets will have no value.

The COVID-19 crisis has been our wake-up call and we have witnessed a growing consensus and a determination across politics, science, academia, business, and society to find a way forward that brings together the needs of the economy and society but one that is rooted in nature’s carrying capacity. They are talking about post-crisis development plans that are green and just. Some commentators are even suggesting that a green rebuild will be cheaper than a return to pre-crisis business as usual.

We now have an opportunity to ensure that the choices we make will create a pathway to that better tomorrow rather than back to where we left off. If we try to repair the colossal damage of the current crisis by returning to where we were, we are setting ourselves up to fail.

We have a vision of what that better tomorrow looks like in the UN Sustainable Development Goals, which through the 17 outcomes they describe, offer a framework for the rebuild. We also have an opportunity to change the way we make those choices to one that is collaborative and inclusive as well as issue-driven.

This inevitably requires that we change the way we understand the economy and economic success. It was back in 1968 in a speech at Kansas University that Robert Kennedy made his famous critique of gross national product (GNP), which he concluded with the remark: “… it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.”

illustration photo (shutterstock)

More than 50 years later we are just fully recognising this. GDP does not capture the distribution of income and therefore does not allow for the cost of rising inequalities. Nor does it include the cost of damage to the environment (climate change and biodiversity loss) on which we depend for our prosperity. It cannot take account of the interconnections of economy, society, and nature that are necessary to understand how the current crisis occurred and how we can move beyond it.

Factoring in these would enable us to make better-informed decisions precisely because we would have a more complete understanding of our world, and it would help us to build a way out of this crisis. It would also enable us to chart a course to sustainable thriving economies. Furthermore, the problems we face are global in nature and require international, collective solutions. We must learn from the last decade and not retreat into nationalism to solve the current problems.

We all have a lot to learn from Vietnam’s response to COVID-19. In a recent piece in UN News by Kamal Malhotra, the UN Resident Coordinator in Vietnam points out: “Vietnam’s success has drawn international attention because of its early, proactive, response led by the government, and involving the whole political system, and all aspects of the society. With the support of the World Health Organization (WHO) and other partners, Vietnam had already put a long-term plan in place, to enable it to cope with public health emergencies, building on its experience dealing with previous disease outbreaks, such as SARS, which it also handled remarkably well.”

Vietnam’s successful management of the COVID-19 outbreak so far can, therefore, be at least partly put down to its investment during “peacetime”. The country has now demonstrated that preparedness to deal with infectious disease is a key ingredient for protecting people and securing public health in times of pandemics such as COVID-19.”

Vietnam’s “peacetime investment” is key here. Where some of us seemed unprepared for how to respond to this crisis, Vietnam was ready. Much as the mainstream might have wanted to call the COVID-19 crisis a black swan, it isn’t. There was too much discussion and reference to disease and pandemics in the mainstream for this to be a black swan.

Take a look at the last 15 years of the World Economic Forum’s (WEF) annual Global Risk Reports. Diseases and pandemics appear enough to know they were a major concern. Looking at the connectivity the infographics in the WEF report this swan came with strings attached and we knew it. In this year’s risk report nearly all the “most likely to occur” and “greatest impact” risks are environmental, and especially climate change-related, and there is an increasing density of social risks emerging.

In a world of such uncertainty, we cannot forecast or predict with any confidence what is going to happen, but we can be prepared. In terms of our economies, this means building resilience by taking account of our dependency on nature and society and limiting it.

As a professional body representing over 150,000 chartered accountants, what do we think their role should be? Chartered accountants create trusted information and insight, which inform our understanding of the world and the resulting decisions that shape our lives. Comprehending and making sense of risk, uncertainty, and opportunity and helping craft a way forward through the storm is what we do. As whole new vistas of risk rapidly open up, now more than ever the leadership of this profession is needed.

This is, I believe, the profession’s moment: chartered accountants are in the business of solving problems and the crisis we face now is a problem like nothing we have ever seen. As a profession we must ask: what does this mean for each of us personally; what does it mean to the organisations we advise or work in; and are we professionally ready?