The Environment Foundation – now the Foundation for Democracy and Sustainable Development – originated in the world of insurance, as perhaps the City of London’s first major environmental initiative. The core funding came from a levy on environmental impairment insurance policies, a market which proved to be highly problematic, particularly after the introduction of the ‘Superfund’ legislation in the USA. It’s an extraordinary fact that some 20% of the losses that almost brought the Lloyds insurance market to its knees related to such policies – and to the losses incurred in underwriting risks linked to such issues as asbestosis, contaminated land and radioactive waste.
One (as it subsequently turned out) financially murderous aspect of the Superfund rules, introduced by a government that was increasingly desperate to tackle toxic waste challenge in the US, was the joint and several liability dimension – which meant, to take an extreme example, that if Corporate X was the last surviving business out of, say, 50 that disposed of toxic waste in a landfill site later covered by the Superfund regime, then you became liable for cleaning up the waste dumped by all the businesses involved. This certainly concentrated minds wonderfully – and got a lot of money into the pockets of lawyers, but it put a pretty deep dent in the prevailing insurance models in this area.
Having been involved in The Environment Foundation since 1994, I am delighted with the change of name – and the linked evolution of our mission. Democracy is a profoundly important factor in shaping our understanding of – and capacity to respond to – sustainability challenges. This is a subject that John Lotherington (at the time Director of The 21st Trust and now also a Trustee of FDSD) and I explored in an article published by OpenDemocracy. We also co-hosted a debate on related themes at The Science Museum’s Dana Centre.
At a time when when many aspects of our prevailing economic and business models are imposing significant externalities on other people, including future generations, a critical question is whether our democratic governments will be as poor at picking up looming environmental risks as those insurers were 20-plus years ago? And, if so, what we can do to ensure better outcomes? Our aim at FDSD is to do our bit towards ensuring that democracy rises to the challenge. Your views on how we best do that would be very welcome.
