Social Factor round-up
Just transition, immortal corporations and elderly regulators and other snippets
Tata Steel’s decision to close the blast furnaces in Port Talbot is significant for anyone interested in the social aspects of responsible investment. Unfortunately, it is clear that some will try to use the decision as a way to counterpose the need to decarbonise with the availability of good jobs. Try searching for ‘Port Talbot’ and ‘net zero’ on Twitter (no-one really calls it X, do they?) and you will get a lot of hits.
No-one should be under any illusions that some of those seeking to create political advantage out of this have any serious commitment to the welfare of steelworkers, or sympathy for their union representatives. However, there is no doubt that the message that Net Zero = zero jobs has some resonance. Port Talbot is not the only example and this is not just a UK problem. When I’ve talked to unions about renewables jobs over the past few years it has been easy for them to point to cases where numbers of jobs are down, or terms and conditions are worse, or work has gone to a different market.
At a general level, the finance sector tends to consider job losses as part of company or industry reorganisation to be something inevitable that should not be interfered with lest costs increase. Even the more enlightened corners of finance that are committed to decarbonisation can reinforce that message, with a view sometimes that workers and their organisations are vested interests that risk slowing down necessary change. Workers and their unions in turn are often suspicious of the motives and interests of the finance sector.
There definitely are good examples out there, but for a variety of reasons they don’t come as easily to mind as the bad ones. Unfortunately this can make it easy for a Nigel Farage type character to pose as the workers’ ally against wealthy progressives who more interested in grand projects than protecting jobs. It’s ridiculous, of course, but I fear that it does cut through with some.
These kinds of questions may become a headache for an incoming Labour government that is rather unlikely to be taking power with political or economic tailwinds, and thus may become even more risk averse in this area. If they lose power, the Conservatives may shift to an even more Farage-ist position on decarbonisation, increasing political pressure.
Clearly this is why the just transition concept is so important and needs to be proven. The challenges are significant. For an individual worker there may be no realistic opportunity to move easily to a new role, certainly with the same employer but even within the same industry.
In the case of Port Talbot, if we want to avoid making the same mistakes that scarred the UK in prior rounds of economic change it means a substantial commitment in one way or another. Are there ways to invest in the steel industry in order that we don’t just let it wither away? Are we willing to provide financial support to those workers who are unlikely to be able to retrain or move, and to the local community, in the style of the Spanish government’s approach to the coal industry?
At the moment the political leadership of the UK seems to have no stomach or ambition for anything like this. I think the longer term risks of appearing powerless to act, or treating job losses as simply a painful inevitability are large.
On a more positive note, there are some investors and others who have been pushing on these issues for a number of years. I would particularly flag the work of the Friends Provident Foundation and Royal London Asset Management, and now Border to Coast, and the Grantham Institute at LSE. My personal view is that this is one of the most important areas of work in RI and beyond.
Relatedly, I was (re)reading a few bits and pieces recently around the idea of lifespans - specifically the disconnect between human lifespans in general, and the lifespans of specific individual humans in particular, and the lifespan of the organisations, institutions and policies that humans create.
In the case of Port Talbot, an individual steelworker might personally be quite convinced of the existential threat of climate change, and thus the need to decarbonise the economy, and want to support the transition. But if they are reasonably close to retirement, the idea that they can retrain and to do a different job is likely impractical. Policymakers are often looking at the long term, and at the large scale - job losses now are a tragedy, but weigh them against the need to decarbonise and its implications for the welfare of many more people for years to come.
There is no right answer here, just another tension. But the difference in timescales is something that I’m personally interested in and will try and write more about in future.
Looking at non-human timescales, I think organisations can appear a little eerie because they outlive the people that create and reproduce them. I’ve plugged this before, but David Runciman nailed this:
Many of the things that we fret about when we imagine a future world of Als are the same worries that have been harboured about corporations for centuries. Corporations are man-made monsters. They have no conscience because they have no soul. They are able to live longer than people do. Some of them almost appear to be immortal. Corporations, like robots, can emerge unscathed from the wreckage of human affairs.1
Looking in the other direction, I think we inevitably default to thinking in terms of our own lifespan, meaning that humans like to anthropomorphise organisations.
For example, I instinctively like this quote from J K Galbraith from The Great Crash:2
“[R]egulatory bodies, like the people who comprise them, have a marked life cycle. In youth they are vigorous, aggressive, evangelistic, and even intolerant. Later they mellow, and in old age – after a matter of ten or fifteen years – they become, with some exceptions, either an arm of the industry they are regulating or senile.”
But when I think about it…
I generally get really put off when people ascribe human traits to non-living things. It is surprisingly common, and usually seems to be a way to allow the person doing it to treat an organisation/company/institution as a bad person as at least part of their critique of it. That does not strike me as a sound basis for analysis.
Which leads on nicely to my final quote of the week, which is an excerpt from Stuart Hall, a really interesting thinker/writer whatever your personal views are. I think his analysis of the failings of the Left and success of the new Right in the 1980s is really insightful and still stands up well. In my view that’s because he wanted to look reality in the face, and took his political opponents seriously. Anyway, this is pretty much how I try to orient myself to the world, even if it is sometimes hard to maintain:
I hold - against the odds - to the formula which Gramsci appropriated from Romain Rolland: 'pessimism of the intellect, optimism of the will'... What it means is that every commitment to the construction of a new political will must be grounded, if it is to be concrete and strategic, in an analysis of the present which is neither ritualistic nor celebratory and which avoids the spurious oscillations of optimism and pessimism, or the triumphalism which so often pass for thought on the traditional left. Ritual and celebration are for the religious. They are for keeping the spirits up; for consolidating and consoling the faithful; and for anathematizing the heretics. They inhibit advance, while keeping the spirit of sectarian rectitude alive and well. There is no alternative to making anew the ‘revolution of our times' or sinking slowly into historical irrelevance. I believe, with Gramsci, that we must first attend 'violently' to things as they are, without illusions or false hopes, if we are to transcend the present.3
Last but by no means least, a quick plug for a very interesting report from the Church Commissioners for England on the assessment of companies’ approaches to human rights, including the translation of this into voting outcomes. It’s a really useful read as it is very transparent about some of the challenges, particularly in relation to data, and how they plan to address them. This is very similar to my own experience in a related area. Also it’s just really encouraging to see an organisation make a serious attempt at informed voting on social issues.
From this https://profilebooks.com/work/how-democracy-ends/
https://www.penguin.co.uk/books/13545/the-great-crash-1929-by-galbraith-john-kenneth/9780241468081
From the introduction to this https://www.versobooks.com/en-gb/products/1252-the-hard-road-to-renewal