On Tuesday 2nd March we had the pleasure to hear Mr. Gustavo Grebler, who presented his research on "Sustainable finance and the design of ESG securities".

The recording of the webinar is available at this link: https://uofglasgow.zoom.us/rec/share/CQJKJZUAQhcY2Y_RikNRKzmQPZVbO26P-qOzI68657j2Ef_zQp7A-pmbfrrhkQLX.VmwWM2wM3Cg-tOMS

Passcode: QW9^88!q 

Mr. Gustavo Grebler is a partner at Grebler Advogados, Brazil. He also acted as legal head of a financial institution, is a fellow of the Max Planck Institute für Internationales und Privatrecht, and a legal scientist for the Sustainable Architecture for Finance in Europe - SAFE, now Leibniz Institut. He has published and lectured in the fields of Corporate Governance and Corporate Law as well as contributing to the draft of the Directive on Corporate Takeovers issued by the Brazilian Institute of Corporate Governance (IBGC).

Abstract of the presentation

Aside from laudable ethical values, sustainable finance is really about mitigating negative externalities and placing economic costs on the shoulders of the agents who created them. So far, such costs have been partially regarded as non-excludables, i.e. devolving on the social group given the impracticability of their allocation onto individual members. Producers are responsible for 100% of the manufacturing process output, subdivided into products, waste and second-order environmental impact, and bear less than 100% of the costs. Taxpayers, as a class, take no part in the manufacturing and bear whatever part of the cost not picked up by producers. It is easy to see that taxpayers subsidize producers insofar as the costs of monitoring, cleaning, physical reparation, medical treatment, and medical facilities, to name a prominent few. It is Pareto efficient to measure the tax burden and move taxation from ex post redress to ex ante transfers to producers and debt holders proportionally to their contribution to the reduction of the negative externalities. It is likewise efficient to establish primary and secondary intermarkets for the trading of ESG securities price sensitive to producers’ deviation from predetermined targets. International coordination and transnational market regulations are called for.

First published: 3 March 2021

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