Paul Donovan and Julie Hudson, CFA argue in From Red to Green? How the Financial Credit Crunch Could Bankrupt the Environment that twin credit crunches – both environment and financial – have been underway for some time. With chapters on food, water, energy, infrastructure, housing, consumer durables, health, education, work and leisure accompanied by a thorough economic analysis regarding both credit and environmental debts driving supply and demand of these goods and services, the authors discuss at length how global economics may be impacted in an environmentally constrained future.
As discussed in From Red to Green? How the Financial Credit Crunch Could Bankrupt the Environment, the economics of the current financial credit crunch may impact future consumer behavior and pricing of goods and services. This is because, as the authors explain, as we continually “borrow today” against our “future ecology”, we could be entering a global environmental credit crisis that could take many years for our current ecological debt to be repaid through improved future ecosystem services as watersheds are restored, biodiversity returns to normal levels, and climate change is eventually mitigated.
The Social Responsibility of the Investment Profession, also by Julie Hudson, CFA, published in 2006, describes how investors decisions have a moral component involved with both the sum and the parts of
their investment decisions. Building on this initial publication published by the CFA Institute, From Red to Green? How the Financial Credit Crunch Could Bankrupt the Environment in its well thought out summary includes detailed action points for food, water, energy, infrastructure, housing, durable goods, and health for socially responsible investors to consider when considering how they should make their impact investing decision so as to decrease our potential future environmental credit crunch. For example, action points for energy include developing a greener version of gross domestic product (GDP) and creating a new specialized credit – or lending – market that can promote clean energy.
From Red to Green? How the Financial Credit Crunch Could Bankrupt the Environment is a great book for graduate students who study impact investing and who are interested in developing tools that can provide mechanisms today for us to mitigate climate change, improve watersheds, and enhance biodiversity at speed and scale.
Gabriel Thoumi frequently contributes to Mongabay.com.