Global Ethics Forum, 28-29 June 2012

The International Environment Forum and the European Baha'i Business Forum were again partners in the Global Ethics Forum (http://globalethicsforum.org) held at the International Conference Centre Geneva on 28-29 June 2012, on the topic "Seeds for Successful Transformation: The Value of Values in Responsible Business", with 80 speakers and panelists from all over the world. The report of the forum with recommendations will eventually be published. The following are a few highlights from the forum of interest to IEF and EBBF.

In his plenary keynote, Martin Dahinden, Director-General of the Swiss Agency for Development and Cooperation, commented on Rio+20 which concluded the previous week. He said there were two parallel worlds, the intergovernmental which gave no clear political signal, and the many side events such as the corporate sustainability forum that served as an incubator for concrete projects and public-private partnerships. An approach constrained by national perspectives produced a fatal misjudgment of the risks posed by resource constraints, climate change, water shortages, ecosystem changes and planetary limits to growth, raising issues of global justice. He said we must change our patterns of thinking to reflect the global common good, requiring technical, social and institutional innovations. To narrow the gap between diverging interests and perceptions, we need a dialogue on norms and values, aiming for sustainability through fair burden sharing. This will require a change in our institutional and cultural heritage comparable to the industrial revolution, in a more pluralistic vision of governance, with new values and priorities in a spirit of justice linked across the local, national, regional and global levels. He said we should mainstream sustainability, and that decoupling our well-being from resource consumption is the challenge of our time.

A first plenary panel including the CEO of a big Indian IT company, a former supreme court justice from South Africa, a director from the World Business Council for Sustainable Development, the director of a Russian think tank and the Deputy-Director General of IUCN, was on "Managing the Sustainability Crisis: Next Steps after Rio+20". Some of the distinguished speakers emphasized the ethical issues in Rio and beyond. Environmental governance is an ethical question. We know how to raise everyone out of poverty and to stay within planetary limits, but we do not do it. Our political system is not effective and did not deliver in Rio, but there are many things we can start doing anyway. We cannot sit back and wait for governments.

The discussion addressed questions such as: How can ethics and values be part of the process? Do we need innovation in ethics? What is the role of spirituality? They can help us to come up with new mindsets for the age of less. The highest type of capital is moral and spiritual capital, which is the real driving force. Our economy has a heritage of the wrong spiritual ideals (Adam Smith, John Nash), when we know we need solidarity and cooperation for a successful result. To counter the disproportion between wealth and poverty, we need to replace greed by other patterns of living, aiming to be spiritual billionaires.

The panel noted that GDP is not a relevant measure. We need to include natural and social capital. A green society must pay for the losses of nature. Nature-based solutions are the real solution to the green economy. Growth will no longer be a relevant concept. There is no world legislation and no enforceable code of ethics. The era of the nation state is yesterday's arrangement. In today's borderless world, we need an economy of collaboration.

The second plenary panel including the deputy editor of the leading Swiss economic magazine, a forensic accountant from USA, an Italian imam, a Chinese financial expert and a sustainability economist, discussed "Managing the Debt Crisis: Transformation Towards an Ethical Economy".

It started with the observation that speculative finance was a greater risk to governments and societies today than sustainability. One banking expert who has testified in many court cases in the USA, giving him access to thousands of internal documents from the big banks, said they show clear evidence of the widespread fraudulent use of financial instruments. There has been collusion between the banks, the US Treasury, the Federal Reserve and the European Central Bank, using untransparent derivatives as "weapons of financial mass destruction" in commodity swaps (Enron), cross-currency swaps (hiding Greek and Italian debt off their balance sheets and then betting against them) and sub-primes to make huge profits while getting bail-outs of their losses for being too big to fail. Three quarters of all derivatives are for speculation, totaling over $700 trillion (when US GDP is $15 trillion). There is an urgent need to make the financial system environmentally friendly and socially responsible.

The Islamic scholar said that money was a means, not a goal, and cited sharia doctrine on finance as an alternative. The Chinese expert described the rapid evolution in the Chinese financial system over the last 20 years, and the role of the banks in investment-led growth. The problems of the short-term horizon in finance, the manipulation of interest rates by central banks, the lack of global standards and accountability, sharing of insider information, the excessive remuneration in the financial sector, market manipulation to increase the value of stock options, and the billions spent on litigation and lobbying, were also cited as ethical challenges. The result has been global chaos and financial disruption. Yet new financial thinking has not yet emerged.

The fact that the US dollar was the de facto global reserve currency allowed the US to borrow without limit, and this flood of money created opportunities for the bankers. The massive American spending spree was irresponsible, with consumption all out of proportion with revenues and an over-valued dollar resting only on its reputation protecting it from rational thinking. There was follow-up discussion of the need for a new global reference currency to replace the dollar, with evidence that the collapse of the dollar was only a matter of time, as China and other countries implement their exit strategies.

There were workshops on multicultural ethics, ethical dilemmas in business, corporate social responsibility, business ethics in conflicting legal and ethical systems, a new global reference currency, sustainable, transparent and ethical finance, social media, sustainable global responsibility in business schools, and business ethics networks in emerging countries. Apart from the finance discussion, other parts of the Forum were much more positive on the role of ethics in business.