The financial system is accelerating systemic failures, from climate change to biodiversity loss, widening inequalities to democratic and political institutions.
We work with positive mavericks – professionals who share aspirations for a sustainable and ethical financial system – to challenge the status quo and propose ambitious solutions.
A financial system that safeguards social cohesion and the environment. Who wouldn’t want this? But common sense isn’t common practice in the finance system and today’s financial system is the opposite of what we need. Which is why Preventable Surprises exists.
We are a group of investment industry insiders – some retired, some in post – and related experts who seek to persuade institutional investors to accept their fiduciary responsibility to mitigate systemic risks before the next preventable surprise.
Our unique contribution
Overcoming the inertia of business as usual requires multiple players using multiple strategies. Here’s how we fit into this puzzle:
1) Many groups have investment firms as members or clients but we work with individual “positive mavericks” within the investment industry to push for faster, deeper change than might, at first, seem possible. Many of the strategies that responsible investors are pursuing today will only have incremental impact on the real world. Most strategies ignore systemic risks. Many ESG professionals – and a growing number of traditional investment professionals too – know this gap exists between “walk” and “talk”. “Positive mavericks” are those who are conscious of this gap and want to do something about it. We support, challenge and coach them to aim high, and push their organisations to deliver.
2) We don’t shy away from explaining the wrongs of the present-day investment system. But as a “think-do tank” we go much further, developing bold thinking and fresh proposals which are fit for purpose given the severity of the issue. Our proposals are authentic yet practical. And we place significant emphasis on getting these ideas adopted by raising the profile and building the necessary alliances. We don’t seek PR and indeed often work behind the scenes because this has more impact.
3) We ensure that conflicts of interests do not get in the way of how we work. We accept support and sponsorship from foundations, individuals, asset owners and other relevant partners, provided it does not conflict with our independence. We do not accept direct funding from asset management firms, though we may partner with organizations who do. Our Directors, staff and consultants are subject to a conflicts of interest policy. Every funding arrangement is subject to review and approval by the Board of Directors.
For many years, Preventable Surprises has been addressing financial disasters that investors could–and should–have seen coming. Concerns about BP’s safety record, the accounting practices of Tesco, sloppy mortgage lending–these were in the public domain for years before disaster struck.
Preventable Surprises is an influence tank that seeks to prevent or mitigate corporate and market implosions.
We work with a group of positive mavericks within the investment industry to persuade and cajole the financial sector to better address systemic risks. We define systemic risks using three features:
While regulators, the media, NGOs and consumers each have a role to play in building a more transparent and sustainable market system, most of the power lies with corporations and their investors. Preventable Surprises focuses on institutional investors because, through the trillions of dollars in assets under their management, they have enabled corporate and market dysfunction. While this may be unintentional, the continuing damage caused to investors and to ecosystems in untenable.
Long-term investors cannot use stock-picking or hedging strategies to avoid systemic risk. Institutional investors’ end beneficiaries will pay the price as the extent of portfolio risk is revealed. That is why investors must mitigate systemic risk through forceful stewardship.