The corporate sector has fueled the transition to “values-based capitalism,” says Jim Chalmers | Australian economy

According to Jim Chalmers, Australia’s business and investment community has been driving a shift towards values-based capitalism, and has hit back a volley of criticism from some news outlets after the release of the Treasurer’s 6,000-word essay, which advocates co-investment and economic inclusion .

Chalmers made the observation Wednesday as he chaired a round of consultations with the investor community on a new framework for climate-related risk disclosures. The Treasurer attended a round table convened by the Australian arm of the UN’s Principles for Responsible Investment initiative.

In his new essay, published Monday in the Monthly, the Treasurer signaled he wants to expand opportunities for “impact investing” while driving regulatory reforms, including a “new taxonomy” to help investors “make more informed decisions.” to match that of the government”. ambitious emission reduction targets.

The Treasurer said that a renewal of the institutions and regulatory framework is essential so that capital can be used for private profit and “public value in the purpose economy”.

He advocated a form of “values-based capitalism” based on public-private partnership rather than antagonism. Chalmers said in the essay that the private sector is “key and central to sustainable growth, and there is a real appetite among so many forward-thinking businesspeople and investors for something more aligned with their values ​​and our national aspirations.”

While Chalmers’ views are not hostile to the foundations of capitalism and are consistent with mainstream analysis by regulators and sections of the business community, the essay has sparked a flurry of hostile commentary in Australia’s two national newspapers, the Australian and Australian Financial Reviews.

Chalmers addressed the controversy during Wednesday’s meeting with investors. He noted, “The investors represented here, and the broader investment and business communities, not only support values-based capitalism—they drove it forward.

“This is not a left fringe idea. It’s about better designed and better informed markets and more collaboration between investors and governments to modernize our economies and deepen and expand our industrial base, fueled by cleaner and cheaper energy.

“Your enthusiasm and determination to push Australia towards a suitably ambitious sustainable finance agenda is an important example of this, but not the only one.”

Chalmers said the reforms the government is enacting on climate-related risk disclosure and financial market transparency are aligned with what investors and lenders have been campaigning for “for years”.

He said the reforms should create guard rails and political stability to ensure markets are well informed and capital can be freed up for productive investment.

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Chalmers noted that while a “minority” of market participants are keen to cling to “a kind of outdated ideology,” the government will pursue “a forward-looking, internationally-focused, sustainable financial agenda born of economic opportunity and contemporary imperatives.”

Labor frontbencher Tony Burke, who appeared separately on the National Press Club, was asked by a reporter if he could define values-based capitalism “in his own words”.

Burke said the arguments Chalmers made in the new essay are consistent with the values ​​”in the mission statements of big companies”, including members of the Business Council of Australia.

Burke said there has been a “rush” in comments to castigate the Treasurer’s analysis, but he advised some of the critics to “look at what a whole lot of big companies are putting out in black and white as the principles they’re putting out as represented importantly”.

“It’s about much more than just the bottom line and for the government to support these concepts is right and proper and I’m really glad Jim wrote the essay.”