Simon Edelsten, who is the manager of the Artemis Global Select Fund and the Mid Wynd Investment Trust, wrote in the FT this morning on sustainable investment. He said, amongst other things:
But we should also recognise the weaknesses of the free market. Companies do not price in pollution and social costs that do not hit the profit and loss line of their accounts. In truth, most companies do not give a jot about the damage they cause to the environment as long as they make money. Even Adam Smith warned that the market can never be totally free from government, warning especially against monopolies. Governments need to use incentives and penalties to shape good corporate behaviour.
I added the emphasis.
But he's right.
And that's why we need mandatory sustainable cost accounting. We can no longer tolerate corporate indifference to climate change.