⚡Policymaking
Morning! For anybody who missed yesterday’s newsletter, here it is. Today, we’re shifting our focus a little bit from the usual conversation — check out the stories below to see how!
A Worsening Refugee Crisis
The Turkish incursion into northeastern Syria after the US withdrawal has had a swift and devastating impact on the region. Scores of Kurdish refugees have been migrating into Iraq, with over 7,000 in just the first week.
As the number of refugees around the world continues to grow, with the total at 25.9 million as of mid 2019, one would hope that countries step up — and thankfully, many around the world are. However, the US has been backsliding in the opposite direction — recently, the Trump administration lowered this year’s refugee cap to 18,000, down from 231,000 in 1980.
The systemic impact. In addition to lowering the cap, the administration is instituting a number of policies aimed at making the refugee / asylum process more difficult. These policies are going to be difficult for future administrations to unravel:
Stopped accepting new referrals from the UN refugee resettlement agencies — no new applicants will even be allowed to enter the process
Increased the vetting of most refugees, even those that were previously approved, slowing their arrival into the country — the vetting policies for refugees were already far more extensive than any other immigrant group
Set caps for special categories of refugees, including Iraqis who aided the US military
What this means. With these processing roadblocks, the real number of refugees admitted in the US this year could fall well beneath the 18,000 target. For example, last year, the cap for Iraqi refugees was set at 4,000, but just 465 were admitted.
Our take. The stories we have featured to date have largely been focused on the interplay between business and social impact. Today’s story is different — there are no business solutions to this problem. Of course, businesses are incredibly important in supporting refugees in their new homes through employment and more. However, these solutions are simply fixes that do not address the root cause of the problem — business cannot stop the conflicts that have resulted in 25.9 million refugees, and businesses cannot fix the broken processing systems that leave refugees without a home. These problems will only be fixed through better policymaking and diplomacy. At Tomorrow, we believe that our future leaders need to understand the interplay between business and policy to meaningfully address society’s largest problems, and we will continue to highlight stories that do so.
Principles for Impact Investing
The International Finance Corporation recently collaborated with several impact investors to launch the Operating Principles for Impact Management. These principles require that “investments be managed with attention to both financial performance and impact at all stages of the investment cycle.” See the graphic below for the full set of principles:
More than 70 institutional investors including traditional asset managers have committed to follow the principles in all their impact funds and products. They will publicly disclose every year on how they are complying, and they will allow independent verification of their claims. This will allow for best practices, benchmarks, and just overall greater transparency.
Our take. As we covered in our very first newsletter (before we even went daily!), impact should not be an excuse for generating lower than market returns. This goal is unfortunately often forgotten by some “impact investors” who invest in less-than-ideal business models and then give excuses for their smaller returns. We are hopeful that the IFC’s principles can bring the learnings needed to help all impact investors achieve these market returns. Overall, we are big fans of systemic solutions and frameworks like these (one of our writers is a consultant, are you really surprised?) — so if you’ve seen other great ones, please reply to this email and send them over!
Short Takes
Nearly a third of the world’s electricity will come from renewables by 2024, especially as solar is getting cheaper and offshore wind expands. However, this will still be short of what’s needed to meet climate change targets.
Top women executives in the UK have called for legal board quotas for women. Across, the FTSE 100 today, women make up 38.9 percent of non-executive positions, but this number falls to 25 percent at executive positions.
New York State’s case against Exxon is going to trial. The attorney general sued Exxon in October 2018, claiming that Exxon “falsely told investors it had properly evaluated the impact of future climate change regulations” on its business.
For any of you applying to business school, check out how business schools around the world measure up on social impact research. As always, keep an eye out for hypocrisy - business schools are not practicing what they are preaching on sustainability goals.
Monday, October 28
Conversations on Plant-based Entrepreneurship: Vegpreneur is a global entrepreneurs community that is made up of innovators who are building a plant-based future and they’re hosting an evening panel on the state of plant-based entrepreneurship at General Assembly. Light snacks and refreshments will be served.
Saturday, November 9
92Y Food Summit: From spotlights on innovation and burgers once thought impossible, to balancing the thrill of the delicious with social responsibility, to how immigrant chefs are transforming American cuisine, to what you’ll be eating in 2020, check out this event for this tantalizing think tank for food lovers.
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