Longer-term returns could be a better investment objective in the future. More patience could have improved the West’s response to the pandemic. New accounting standards could now include sustainability. 2021 will not be without risks, amongst them the psychological fallout from the pandemic, but there will be opportunities too, and a chance for positive change.

QUOTE OF THE WEEK
“What is cheap today may become impossibly expensive tomorrow.” – Robert Skidelsky


Robert Skidelsky, The end of efficiency
(Project Syndicate, 17 December 2020)
The politician / economist asserts that his fellow economists have ignored the need to trade off efficiency for longer-term sustainability. In his view, this is because their equilibrium models regard the future as an extension of the present, but there is no reason to believe that what is efficient today will be efficient tomorrow. What is cheap today, for example, may become impossibly expensive tomorrow, so we need to invest in sustainable technologies that can yield a long-run return to humanity, rather than just short-run gains for businesses and consumers (reads in 6-7 min).
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Mathew Burrows and James Manning, The top ten risks and opportunities for 2021
(Atlantic Council, 16 December 2020)
It’s tempting to say that in 2021, there’s nowhere to go but up. But there will be further unanticipated shocks and no shortage of risks. The two foresight experts draw on their best judgment to identify the top ten risks in 2021 (focused on the US but with global implications) and attach a probability to each potential scenario. In the spirit of optimism, they also identify ten opportunities in the coming year for the new US administration (10-15 min).
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Branko Milanovic, Impatience: a deep cause of Western failure in handling the pandemic?
Global inequality, 15 December 2020)
At the end of 2019, an authoritative report asserted that the three countries best prepared to deal with a pandemic were the US, the UK and the Netherlands. Ever since this disastrous forecast, pundits and experts have been trying to figure out why some countries did better than others, and vice versa. But how to explain the debacle of Western countries and the success of East Asian countries? The economist comes up with an intriguing explanation: impatience – obsession with “pure time preference” is the West’s Achille’s heel! (4-5 min).
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Richard Barker, Robert Eccles and George Serafeim, The Future of ESG Is … Accounting?
(Harvard Business Review, 3 December 2020)
Sustainability is now a quasi-universal concern, but there are still no coherent standards on how companies can measure it and report it. This might change thanks to a quiet revolution in the accounting community. The IFRS Foundation (which oversees the work of the International Accounting Standards Board) has proposed the creation of a parallel Sustainability Standards Board (SSB). If this moves forward, investors and other stakeholders will have a much clearer view of any company’s sustainability performance, just as they do with its financial performance – a fundamental step forward for sustainability (reads in 6-7 min).
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Paola Cocozza, Has a year of living with Covid-19 rewired our brains?
(The Guardian, 13 December 2020)
The answer is yes – COVID-19 is “akin to a world war” in its emotional fallout. This article is based on extensive interviews conducted with psychologists and historians who see a second pandemic coming “in the train of the Covid-19 first pandemic: a psychological pandemic.” We’ve all been living (with many different degrees of intensity) with uncertainty on a “really intense scale.” There is no new normal coming – just an evolving estrangement, but we can also use this pandemic as a “galvanising force for change” (reads in 10mn+).
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