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Principles of Sustainable Finance

Principles of Sustainable Finance is also supported by teaching materials and

cases available at https://www.rsm.nl/erasmus-platform-for-sustainable-value-
creation/our-work/book/
 PRAISES FOR THE BOOK

‘Sustainable finance has emerged as a major new field for practitioners, but has
largely bypassed the classroom for lack of a good textbook. Principles of
Sustainable Finance is an impressive textbook that fills this important gap. It
lucidly explains the fundamental challenge climate change poses for financial
markets. It is extremely well-informed about the latest developments and
weaves together a coherent account of widely dispersed approaches, including
research that is otherwise inaccessible to the layman. It is essential reading for
any student seeking to understand the main ideas and trends in sustainable
finance.’
Patrick Bolton, Professor of Business at Columbia University
‘The financial system is integral to achieving a smooth transition to a low
carbon economy. Based on their extensive careers in finance and academia,
Schoenmaker and Schramade set out an insightful vision for a sustainable
financial sector, one where social and environmental dimensions are inte-
grated within financial decisions. At a time when the need for a sustainable
financial system becomes ever more pressing, this book furthers the debate on
how to get there and what role each financial market participant has to play.’
Mark Carney, Governor of the Bank of England
‘The UN Sustainable Development Goals 2030 are predicated on the idea that
current and future generations have the resources needed to ensure access to
clean water, food, shelter, health, education and energy, irrespective of the
place of birth, while caring and preserving our common home: the Earth. In
Principles of Sustainable Finance, Dirk Schoenmaker and Willem Schramade
discuss the importance of sustainable finance and how it can help allocate
resources to individual and social needs, over time, while respecting our
planet’s boundaries. It is an indispensable read for students, professionals
and policy-makers.’
Vitor Gaspar, Director Fiscal Affairs Department
at the International Monetary Fund
‘I am sometimes asked what a biologist is doing at the Ministry of Finance.
The answer is simple: there is no better place for a biologist than working with
finance. With the monumental challenges we are facing, such as climate
change and the loss of biodiversity, mainstream finance needs to become
truly sustainable. This implies that a larger skillset is needed for those dealing
with economics. This textbook contributes to the change needed.’
Per Bolund, Minister for Financial Markets in Sweden
‘The investment decisions of today shape our future. We have a choice. Do we
maximise short-term returns, or create long-term sustainable value? It is
becoming increasingly clear that society is reaching ecological and social
boundaries, and that we can only prosper if we respect these boundaries.
Principles of Sustainable Finance provides investors and financiers with the
tools to make the right decisions, now and in the future.’
Eloy Lindeijer, Chief Investment Officer at PGGM
‘With this work, Schoenmaker and Schramade make an invaluable contribu-
tion to the role of finance in the transition of the global economy to a low
carbon growth path. It should be required reading in the C-suite of any bank
grappling with what climate change means for its lending strategy.’
Stewart James, Managing Director Public Affairs at HSBC
‘Principles of Sustainable Finance comes with a perfect timing: all around
the planet a new, long-term and responsible capitalism is emerging. It requires
combining a new academic perspective and attention to its concrete imple-
mentation. This is exactly what this important book achieves and makes it so
valuable for both students, researchers and practitioners.’
Frédéric Samama, Co-Head of Institutional Clients at Amundi
Principles of
Sustainable Finance

Dirk Schoenmaker and

Willem Schramade

1
3
Great Clarendon Street, Oxford, OX2 6DP,
United Kingdom
Oxford University Press is a department of the University of Oxford.
It furthers the University’s objective of excellence in research, scholarship,
and education by publishing worldwide. Oxford is a registered trade mark of
Oxford University Press in the UK and in certain other countries
© Dirk Schoenmaker and Willem Schramade 2019
The moral rights of the author have been asserted
First Edition published in 2019
Impression: 3
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Links to third party websites are provided by Oxford in good faith and
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contained in any third party website referenced in this work.
If your plan is for 1 year, plant rice.
If your plan is for 10 years, plant trees.
If your plan is for 100 years, educate people.
Confucius
■ PREFACE

As a team of authors we have followed the emergence of sustainable finance

(SF) from different angles. We have been teaching a course on finance and
sustainability, from which this book has emerged, and we have contributed to
the academic literature on this topic. On the policy side, we have advised the
government on the role of large shareholders in long-term value creation.
Moving to the practices of SF, we have been directly involved in impact
investing at leading sustainable asset managers and have advised banks and
pension funds on sustainability practices.

How does this textbook compare with other books?

Principles of Sustainable Finance differs from other textbooks in its wide
coverage, as it deals with the various elements of SF, supported by examples.
This coverage implies that we not only discuss sustainability challenges but
also apply them to the corporate and financial sector. We cover the full range
of financial intermediaries, from institutional investors to banks and insurance
companies. Based on new data, we document the gradual shift from finance as
usual to SF.
While there are several sustainability books in the field of business (e.g.
Business Sustainability, by Rezaee, 2017) and economics (e.g. Ecological Eco-
nomics, by Daly and Farley, 2011), the field of finance is only partly covered.
There are titles in sustainable investing (e.g. Evolutions in Sustainable Invest-
ing: Strategies, Funds and Thought Leadership, by Krosinsky, 2012; Sustainable
Investing: Revolutions in Theory and Practice, edited by Krosinsky and Pur-
dom, 2017) and sustainable banking (e.g. Sustainability in Finance: Banking
on the Planet, by Jeucken, 2004; Sustainable Banking: Managing the Social and
Environmental Impact of Financial Institutions, by Weber and Feltmate,
2016). However, many books are edited volumes comprising a collection of
papers (e.g. Designing a Sustainable Financial System, edited by Walker,
Kibsey, and Crichton, 2018). These books are not primarily meant for peda-
gogical purposes.
Principles of Sustainable Finance is different in five respects:
1) it first deals with thematic issues (sustainability, externalities, governance,
strategy, and integrated reporting) before moving on to SF;
x PREFACE

2) it covers the full scope of SF: investing (both equities and bonds), banking,
and insurance;
3) it adopts an interdisciplinary approach;
4) each chapter starts with an overview and learning objectives; at the end of
each are suggestions for further reading and a list of key concepts used;
5) there is extensive use of figures, boxes, and tables to clarify concepts and
provide examples.

How to use this book?

Principles of Sustainable Finance is an accessible textbook for undergraduate,
graduate, and executive students of finance, economics, business administra-
tion, and sustainability. Each chapter initially provides an overview and
identifies learning objectives. Throughout the book we use boxes in which
certain issues are explained in more detail, by referring to theory or practical
examples. Furthermore, we make abundant use of graphs and tables to give
students a comprehensive overview of the sustainability challenges and their
application to finance. At the end of each chapter we provide suggestions for
further reading. Oxford University Press provides a supporting website for this
book. This website contains exercises (and their solutions) for each chapter.
A very basic understanding of finance is needed to use this textbook, as we
assume that students are familiar with well-known finance tools, such as the
discounted cash flow model and the capital asset pricing model. The book can
be used for third-year undergraduate, graduate, and executive courses.
Dirk Schoenmaker
Rotterdam, Willem Schramade
April 2018
■ ACKNOWLEDGEMENTS

We would like to thank our colleagues at the Rotterdam School of Management,

Erasmus University, for their very generous support and guidance in shaping
this book, which draws on different disciplines. Special thanks to Dion
Bongaerts, Mathijs Cosemans, Mathijs van Dijk, Gianfranco Gianfrate, Abe
de Jong, and Marno Verbeek (finance), Steve Kennedy and Eva Rood (busi-
ness sustainability), Paolo Perego (accounting), Derk Loorbach (transition
management), and our students, who commented on draft chapters and
provided valuable feedback. We are grateful to Peter Roosenboom, chair of
the Finance Department, who provided an excellent teaching and research
environment for writing this book.
At NN Investment Partners we would like to thank in particular Hendrik-
Jan Boer, Bram Bos, Jeroen Bos, Jeroen Brand, Adrie Heinsbroek, Faryda
Lindeman, Johan Vanderlugt, Huub van der Riet, and Alex Zuiderwijk for
their feedback and support—and for being great colleagues who help shape the
practice of sustainable investing.
We would also like to thank Andrew Coburn, Jaap van Dam, Adrian de
Groot Ruiz, Han van der Hoorn, Marcel Jeucken, Jan van der Kolk, David
Korslund, Rob Lake, Karen Maas, Roland Mees, Simon Moolenaar, Andrew
Newton, Ilan Noy, Paul de Ruijter, Frédéric Samama, Hans Stegeman, Thomas
Steiner, and Rens van Tilburg for valuable advice and comments on draft
chapters.
Dirk Schoenmaker
Rotterdam, Willem Schramade
April 2018
■ CONTENTS

LIST OF FIGURES xv
LIST OF TABLES xix
LIST OF BOXES xxi
LIST OF ABBREVIATIONS xxiii

PART I WHAT IS SUSTAINABILITY AND WHY DOES IT MATTER?

1 Sustainability and the transition challenge 3

PART II SUSTAINABILITY’S CHALLENGES TO CORPORATES

2 Externalities—internalization 39

3 Governance and behaviour 74

4 Coalitions for sustainable finance 102
5 Strategy and intangibles—changing business models 117

6 Integrated reporting—metrics and data 150

PART III FINANCING SUSTAINABILITY

7 Investing for long-term value creation 179

8 Equity—investing with an ownership stake 211
9 Bonds—investing without voting power 252

10 Banking—new forms of lending 282

11 Insurance—managing long-term risk 316

PART IV HOW TO GET THERE?

12 Transition management and integrated thinking 351

NAME INDEX 369

SUBJECT INDEX 374
■ LIST OF FIGURES

1.1 The world model 5

1.2 The planetary boundaries 8
1.3 The doughnut: the safe and just space for humanity 12
1.4 Sustainable development challenges at different levels 15
1.5 Managing sustainable development 19
1.6 Levels of SEV 27
1.7 Value creation: From an old to a new vision 29
2.1 Recycling rates for 60 metals 43
2.2 Internalization of social and environmental impacts 46
2.3 From financial value to integrated value 51
2.4 Solar power capacity: predictions versus actual 58
2.5 Non-linear renewable energy expansion trajectories 59
2.6 Global carbon law guiding decadal pathways 59
2.7 Impact of scenarios on DCFs 61
2.8 Possible trajectories of carbon emissions 63
2.9 GHG emissions and GVA by sector, EU 64
3.1 Time horizon and factors in SF 80
4.1 Rise of institutional investors 103
5.1 Linking sustainability and strategy 120
5.2 The business model canvas 125
5.3 The rise of intangibles 127
5.4 Intangible resources versus intangible assets 127
5.5 Types of materiality 129
5.6 Novozymes’ materiality matrix 130
5.7 Sustainability issues 134
5.8 The value hill of raw materials 138
5.9 Delivering value for all stakeholders (2017) 143
5.10 NPV at various probabilities of losing the license to operate 146
6.1 Value drivers of Novozymes 156
6.2 Value drivers of a mining company 156
6.3 The six capitals in IR 160
6.4 Example of a company’s traditional balance sheet 166
xvi LIST OF FIGURES

6.5 Example of a company’s market value balance sheet 166

6.6 Example of a company’s six capitals balance sheet 166
6.7 Example of a company’s sustainability scoring by a sustainability
rating agency 171
7.1 A stylized investment chain 185
7.2 Financial impact of qualitative and quantitative ESG information 191
7.3 The increasing availability of ESG data 192
7.4 Diminishing benefits from diversification 193
7.5 Ideal versus actual investment chains and their components 201
7.6 Conditions for LTVC 202
7.7 Alignment in the investment chain on LTVC 204
8.1 Classification of equities investing 213
8.2 Business models as the link between ESG and finance 219
8.3 Why sustainability matters for shareholder value 219
8.4 Indirect link between ESG and investor performance 223
8.5 Internalization to align financial and societal performance 238
8.6 The impact dimensions of the Impact Management Project 240
9.1 Classification of bonds 254
9.2 From ESG to credit risk 259
9.3 Correlation of country ESG scores and credit ratings 262
9.4 Correlation of mean country ESG momentum and GDP
growth (2010–16) 262
9.5 Control of corruption versus foreign credit rating 263
9.6 Investment managers conducting responsible investment 266
9.7 Top ten country ESG scores in the RobecoSAM country sustainability
ranking 268
9.8 Robeco F-score 269
9.9 Green bond issues, 2007–17 273
10.1 Simplified balance sheet and P&L account of a bank 284
10.2 ING’s materiality matrix, 2016 290
10.3 Size of financial market segments, 2016 291
10.4 Dimensions of values-based banking 303
11.1 Simplified balance sheet and P&L account of an insurer 318
11.2 Heavy-tailed distribution 319
11.3 Insured catastrophe losses, 1980–2017 (in $ billions) 322
11.4 AXA’s materiality matrix, 2016 325
11.5 Sustainability scores of Allianz, 2017 330
 LIST OF FIGURES XVII

11.6 Global temperature change and sea-level rise (relative to 1986–2005) 336
11.7 Increase of frequency of present 100-year events with rising sea levels 337
11.8 Maximum annual storm surge, stylized example 340
12.1 The x-curve of transition dynamics 352
12.2 Backcasting: From long-term thinking to short-term action 354
12.3 Value creation: From an old to a new vision 355
12.4 Transition management framework 359
■ LIST OF TABLES

1.1 The ecological ceiling and its indicators of overshoot 9

1.2 The social foundation and its indicators of shortfall 13
1.3 Framework for SF 20
1.4 Integration of sustainability in financial instruments and sectors 30
2.1 Linking SDGs and capitals 43
2.2 Assumptions used in scenarios 64
2.3 Valuations calculated for scenarios 65
2.4 Probabilities applied to scenarios 66
3.1 Players in sustainability 77
4.1 Share of institutional investors in equity 104
4.2 Main coalitions for SF 108
4.3 Coalitions for SF 112
5.1 The business sustainability typology 119
5.2 Stakeholder impact map for a pharmaceutical company 136
5.3 Stakeholder impact map for a social media company 137
5.4 Primitive NPV analysis of a mining company 144
5.5 Correct NPV analysis of a mining company 145
5.6 Probabilities of scenarios and weighted NPV 145
6.1 Operational carbon footprint by scope 154
6.2 Comparing reporting frameworks 158
6.3 Comparison of Philips using the seven guiding principles of
an integrated report 164
6.4 Comparison of Philips using the eight elements of an integrated report 165
6.5 Benefits and costs of IR 168
6.6 Examples of sustainability data providers 171
7.1 Traditional versus long-term investing 180
7.2 Example of fund performance metrics 184
7.3 Fund performance against a range of indices and a peer group 196
7.4 Fund performance on an absolute return basis 196
8.1 Classification of ESG approaches in equity investing 212
8.2 DCF valuation with the value drivers—analyst extrapolation 216
8.3 Suitability of methods per type of investing 228
8.4 ODDO’s scoring model for management quality 236
xx LIST OF TABLES

8.5 Impact criteria for Novozymes 240

8.6 Mapping impact KPIs for Novozymes 241
9.1 Sovereign and corporate bonds: Underlying factors 260
9.2 The RobecoSAM country sustainability framework 267
10.1 Financial comparison of values-based and global banks, 2015 288
10.2 Integration of sustainability into lending 292
10.3 Sustainability criteria integrated into credit risk management 293
10.4 Scorecard for values-based banking 304
10.5 Missions of the ten largest microfinance institutions 308
10.6 Global outreach of microfinance institutions, 2015 310
11.1 Catastrophes: The 25 most costly insurance losses, 1970–2017 320
11.2 Largest re-insurance companies, 2015 323
11.3 Event loss table for a simple portfolio 333
11.4 Increase of frequency of present 100-year floods in New Zealand 338
■ LIST OF BOXES

1.1 The Deepwater Horizon oil spill 7

1.2 Rana Plaza factory collapse 7
1.3 Refined profit maximization 22
1.4 Internalization of externalities 23
1.5 Contributing to sustainable development 24
2.1 Social, human, and natural capitals in the SDG framework 43
2.2 Optimal policy and climate scepticism 49
2.3 The true price of roses from Kenya 52
2.4 A brown capital charge? 68
3.1 Corporate scandals across the world 79
3.2 The aborted takeover of Unilever by Kraft Heinz 86
5.1 Rio Tinto’s competitive edge from physical resources 122
5.2 Novozymes’ competitive advantage from R&D 122
5.3 Dollar Shave Club versus Gillette 125
5.4 Anglo American’s failure to maintain intangibles 130
5.5 Strategic choices by BMW 133
5.6 Circular design—Fairphone 139
5.7 Optimal use—Bundles 140
5.8 LTVC at KPN 142
6.1 Emissions saved by Novozymes 154
7.1 Norwegian sovereign wealth fund 186
7.2 KPMG’s True Value methodology 199
7.3 Investing for LTVC at Alecta 205
8.1 KUKA VDA example 231
8.2 Constructing a low-carbon index 233
8.3 ODDO’s scoring model for management quality 236
9.1 Interview with a corporate bonds fund manager 270
9.2 Green bond initiatives of the IFC 274
9.3 Interview with a green bonds fund manager 275
10.1 ING provides sustainable loan to Philips 295
10.2 Lending policies for agribusiness 296
10.3 Banning new or existing clients 300
xxii LIST OF BOXES

10.4 Energy-efficient mortgages 301

10.5 The roots of microfinance 307
10.6 Bank Rakyat Indonesia 309
11.1 Alternative ways to measure the impact of natural disasters 321
11.2 Materiality matrix of Swiss Re 326
11.3 A global climate risk pool 340
11.4 Digitally enabled insurance 343
12.1 Sustainability in finance education 363
■ LIST OF ABBREVIATIONS

ABS Asset-Backed Securities

AMH Adaptive Markets Hypothesis
AUM Assets Under Management
BII Biodiversity Intactness Index
BRI Bank Rakyat Indonesia
CAPEX Capital Expenditures
CAPM Capital Asset Pricing Model
CDP Carbon Disclosure Project
CDS Credit Default Swap
CEO Chief Executive Officer
CF Cash Flow
CFCs Chlorofluorocarbons
CIO Chief Investment Officer
COP Conference of the Parties (governed by the UN)
CSR Corporate Social Responsibility
DCF Discounted Cash Flow
DU Dobson Unit
EBIT Earnings Before Interest and Taxes
ECCE European Centre for Corporate Engagement
EES Economic, Environmental, and Social (Factors)
EMH Efficient Markets Hypothesis
EMS Environmental Management System
EPS Earnings Per Share
ESG Environmental, Social, and Governance (Factors)
ETFs Exchange Traded Funds
ETS Emissions Trading System
EV Environmental Value
FCF Free Cash Flow
FCLTGlobal Focus Capital on the Long-Term Global
FV Financial Value
G20 Group of Twenty
GAAP Generally Accepted Accounting Principles
xxiv LIST OF ABBREVIATIONS

GABV Global Alliance for Banking on Values

GDP Gross Domestic Product
GHG Greenhouse Gas
GIIN Global Impact Investing Network
GRI Global Reporting Initiative
G-SIBs Global Systemically Important Banks
GVA Gross Value Added
IASB International Accounting Standards Board
ICMA International Capital Markets Association
IEA International Energy Agency
IFC International Finance Corporation
IFRS International Financial Reporting Standards
IIRC International Integrated Reporting Council
IOSCO International Organization of Securities Commissions
IP&L Integrated Profit and Loss (Account)
IPCC Intergovernmental Panel on Climate Change
IPO Initial Public Offering
IR Integrated Reporting
IV Integrated Value
KPIs Key Performance Indicators
LTIFR Lost Time Injury Frequency Rate
LTVC Long-Term Value Creation
M&As Mergers and Acquisitions
MDGs Millennium Development Goals
NGO Non-Governmental Organization
NOPLAT Net Operation Profit Less Adjusted Taxes
NPS Net Promoter Score
NPV Net Present Value
OCF Operating Cash Flow
P&C Property and Casualty (Insurance)
P&L Profit and Loss (Account)
PE Price–Earnings Ratio
PPE Property, Plant, and Equipment
PRI Principles for Responsible Investment
PV Photovoltaic
R&D Research and Development
RCP Representative Concentration Pathway
 LIST OF ABBREVIATIONS XXV

REDD+ Reducing Emissions from Deforestation and forest Degradation

ROA Return on Assets
ROE Return on Equity
ROI Return on Investment
ROIC Return on Invested Capital
S&P Standard & Poor’s
SASB Sustainability Accounting Standards Board
SDGs Sustainable Development Goals
SEV Social and Environmental Value
SF Sustainable Finance
SIB Social Impact Bond
SME Small- and Medium-Sized Enterprise
SPO Seasoned Public Offering
SPV Special Purpose Vehicle
SRI Socially Responsible Investing
SV Social Value
TCFD Task Force on Climate-related Financial Disclosures
TE Tracking Error
TP Technical Provisions
TV Total Value or True Value
UN United Nations
UNEP United Nations Environment Programme
UNFCCC United Nations Framework Convention on Climate Change
VaR Value at Risk
VBBs Values-Based Banks
VDA Value Driver Adjustments
WACC Weighted Average Cost of Capital
WBCSD World Business Council for Sustainable Development
WEF World Economic Forum
WEO World Energy Outlook
WTC World Trade Center
WWF World Wildlife Fund
YTM Yield to Maturity
Part I
What is sustainability and
why does it matter?
1 Sustainability and the
transition challenge

Overview
Our economic models were developed in the age of resources abundance, when
natural resources were plentiful and carbon emissions were limited. No
environmental concerns were factored into these models, only labour and
capital. Likewise, financial theory does not account value to natural resources
beyond their near-term cash flows (CFs). Possibly fatal depletion of resources
is ignored. These models are still widely used, but no longer tenable. We are
now in a transition to a low-carbon and more circular economy to overcome
environmental challenges. While an early transition allows for a gradual
adjustment of our production and consumption patterns, a late transition
will cause sudden shocks and lead to stranded assets, which will have lost
their productive value. Many natural resources companies are still in denial,
irrationally counting on a late and gradual transition.
Mass production in a competitive economic system has led to long working
hours, underpayment, and child labour, first in the developed world and later
relocated to the developing world. Social regulations have been increasingly
introduced to counter these practices and to promote decent work and access
to education and health care. To guide the transition towards a sustainable and
inclusive economy, the United Nations (UN) have developed the 2030 Agenda
for Sustainable Development, which will require behavioural change.
Sustainable development is an integrated concept with three aspects: eco-
nomic, social, and environmental. This chapter starts by explaining the sus-
tainability challenges that society is facing. On the environmental front,
climate change, land-use change, biodiversity loss, and depletion of natural
resources are destabilizing the Earth system. Next, poverty, hunger, and lack of
health care show that many people live below minimum social standards.
Sustainable development means that current and future generations have the
resources needed, such as food, water, health care, and energy, without stres-
sing the Earth system processes.
Why should finance contribute to sustainable development? The main task
of the financial system is to allocate funding to its most productive use.
Finance can play a leading role in allocating investment to sustainable cor-
porates and projects and thus accelerate the transition to a low-carbon and
4 PRINCIPLES OF SUSTAINABLE FINANCE

more circular economy. Sustainable finance (SF) looks at how finance

(investing and lending) interacts with economic, social, and environmental
issues. In the allocation role finance can assist in making strategic decisions on
the trade-offs between sustainable goals. Moreover, investors can exert influ-
ence on the corporates in which they invest. In this way, long-term investors
can steer corporates towards sustainable business practices. Finally, finance is
good at pricing risk for valuation purposes and can thus help dealing with
the inherent uncertainty about environmental issues, such as the impact of
carbon emissions on climate change. Finance and sustainability both look at
the future.
The thinking about SF has gone through different stages over the last
decades, whereby the focus is gradually shifting from short-term profit
towards long-term value creation (LTVC). This chapter analyses these stages
and provides a framework for SF. In addressing social and environmental
challenges, a key development is the move from risk to opportunity. While
financial firms started to avoid unsustainable companies from a risk perspective,
the front-runners are now increasingly investing in sustainable companies
and projects.

Learning objectives
After you have studied this chapter, you should be able to:
• explain the planet’s social and environmental challenges;
• list and understand the UN Sustainable Development Goals (SDGs);
• understand the transition of the economic system;
• explain the main functions of the financial system and how to apply them to
sustainability;
• explain the various stages of SF.

1.1 Why does sustainability matter?

Our economic models were developed in an empty world with an abundance
of goods and services produced by nature (Daly and Farley, 2011). That was at
the onset of the Industrial Revolution in the 19th century. Labour and capital
were the scarce production factors to optimize in economic production, while
nature and its services were freely available. But the Industrial Revolution had
profound impacts on the economy, society, and the global ecosystem. Human
society became largely dependent on fossil fuels and other non-renewable
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 5

resources, partly in response to the depletion of forests as fuel. This increased

energy use provided access to other raw materials. Technological advances
dependent on fossil fuel (starting with the steam engine) allowed unprece-
dented production of consumer goods, spurring economic and population
growth. Urbanization led to a reduction of arable land, driving further
deforestation.
Back in the early 1970s, the Club of Rome was the first to highlight that the
Earth system could not support these rates of economic and population
growth much beyond the year 2100, even with advanced technology. In
their aptly titled report Limits to Growth, the Club of Rome examined five
basic factors that determine and, in their interactions, limit growth on this
planet: (i) population increase; (ii) food production; (iii) non-renewable
resource depletion; (iv) industrial output; and (v) pollution generation. They
also suggested that humankind can create a society in which it can live
indefinitely on Earth if it imposes limits on itself and its production of material
goods to achieve a state of global equilibrium, with population and production
in carefully selected balance (Meadows et al. 1972).
To illustrate the limits to growth, the Club of Rome developed a world
model that analyses the carrying capacity of the planet and population growth.
Population growing in a limited environment can approach the ultimate
carrying capacity of that environment in several possible ways. It can adjust
smoothly to an equilibrium below the environmental limit by means of a
gradual decrease in growth rate, as shown in the left panel of Figure 1.1. It can
also overshoot capacity by consuming some necessary non-renewable
resource or causing pollution, as shown in the right panel. This behaviour
has occurred in many natural systems. A major purpose in constructing the
world model has been to determine which, if any, of the behaviour modes
will be most characteristic of the world system as it reaches the limits to
growth.

Carrying capacity Carrying capacity Population

Population

Time Time

Figure 1.1 The world model

Source: Meadows et al. (1972).
6 PRINCIPLES OF SUSTAINABLE FINANCE

While the Club of Rome was a private initiative, the UN installed the
Brundtland Commission, formally known as the World Commission on
Environment and Development, to unite countries to pursue sustainable
development together. Gro Harlem Brundtland, former Prime Minister of
Norway, was chosen as chair due to her strong background in the sciences
and public health. The Brundtland Report (1987) argues that ‘the “environ-
ment” is where we live; and “development” is what we all do in attempting to
improve our lot within that environment. The two are inseparable.’ The report
defines sustainable development as ‘development that meets the needs of the
present without compromising the ability of future generations to meet their
own needs’. The Brundtland Report thus reinforces the fact that sustainability
is about the future.
Climate change is one of the largest environmental risks affecting society.
Starting at the Earth Summit in Rio de Janeiro in 1992, the United Nations
Framework Convention on Climate Change (UNFCCC) is an international
environmental treaty to ‘stabilise greenhouse gas concentrations in the atmos-
phere at a level that would prevent dangerous anthropogenic interference
with the climate system’. The parties to the convention have met annually
from 1995 in Conferences of the Parties (COP) to assess progress in dealing
with climate change. In the 2015 Paris Agreement on climate change
(COP21), countries reconfirmed the target of limiting the rise in global
average temperatures relative to those in the pre-industrial world to 2°C
(two degrees Celsius), and to pursue efforts to limit the temperature increase
to 1.5°C (UNFCCC, 2015). Doing this would ensure that the stock of carbon
dioxide and other greenhouse gases (GHGs) in the atmosphere does not
exceed a certain limit. The Intergovernmental Panel on Climate Change
(IPCC, 2014) estimates that the remaining carbon budget amounts to 900
gigatons (Gt) of CO2 from 2015 onwards. The speed with which the limit is
reached depends on the emissions pathway. If current global carbon emis-
sions at about 40 Gt a year are not drastically cut, the 2°C limit would be
reached in two decades.
Section 1.2 discusses the fact that climate risk, land-system change, bio-
diversity loss, nitrogen and phosphorus flows, poverty, food, fresh water, and
health form the most pressing environmental and social challenges. Our
economic system, organized through business firms, has these environmental
and social impacts on society; these externalities are thus not separable from
production decisions. To highlight the tension between unbridled economic
growth and sustainable development, we provide two examples. Box 1.1
describes the Deepwater Horizon oil spill in the Gulf of Mexico. Box 1.2
shows the impact of the collapse of a factory building in Bangladesh. These
examples have an underinvestment in safety to increase short-term profits
in common.
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 7

BOX 1.1 THE DEEPWATER HORIZON OIL SPILL

Oil began to spill from the Deepwater Horizon drilling platform on 20 April 2010, in the British
Petroleum-operated Macondo Prospect in the Gulf of Mexico. An explosion on the drilling rig
killed 11 workers and led to the largest accidental marine oil spill in the history of the petroleum
industry. The US government estimated the total discharge at 4.9 million barrels. After several
failed efforts to contain the flow, the well was declared sealed on 19 September 2010.
A massive response ensued to protect beaches, wetlands, and estuaries from the spreading
oil, using skimmer ships, floating booms, controlled burns, and oil dispersant. Oil clean-up
crews worked on 55 miles of the Louisiana shoreline until 2013. Oil was found as far from the
Deepwater Horizon site as the waters off the Florida Panhandle and Tampa Bay, where the oil
and dispersant mixture was embedded in the sand. The months-long spill, along with adverse
effects from the response and clean-up activities, caused extensive damage to marine and
wildlife habitats and the fishing and tourism industries.
Numerous investigations explored the causes of the explosion and record-breaking spill.
Notably, the US government’s September 2011 report pointed to defective cement on the
well, laying the fault mostly with BP, but also rig operator Transocean and contractor
Halliburton. Earlier in 2011, a National Commission (2011) likewise blamed BP and its partners
for a series of cost-cutting decisions and an inadequate safety system, but also concluded that
the spill resulted from ‘systemic’ root causes and that without ‘significant reform in both
industry practices and government policies, might well recur’.

BOX 1.2 RANA PLAZA FACTORY COLLAPSE

The Rana Plaza collapse was a disastrous structural failure of an eight-storey commercial
building on 24 April 2013 in Bangladesh. The collapse of the building caused 1,129 deaths,
while approximately 2,500 injured people were rescued alive from the building. It is con-
sidered the deadliest garment factory accident in history and the deadliest accidental struc-
tural failure in modern human history.
The building contained clothing factories, a bank, apartments, and several shops. The
shops and the bank on the lower floors were immediately closed after cracks were discovered
in the building the day before the collapse. However, the building’s owners ignored warnings
to evacuate. Garment workers, earning €38 a month, were ordered to return the following
day, and the building collapsed during the morning rush hour.
The factories manufactured clothing for brands including Benetton, Bonmarché, the
Children’s Place, El Corte Inglés, Joe Fresh, Monsoon Accessorize, Mango, Matalan, Primark,
and Walmart.

1.2 Sustainability challenges

There can be no Plan B, because there is no Planet B.
Former United Nations Secretary-General, Ban Ki-moon
8 PRINCIPLES OF SUSTAINABLE FINANCE

1.2.1 ENVIRONMENTAL CHALLENGES

The aim is to keep the planet liveable for current and future generations. There
is increasing evidence that human activities are affecting the Earth system,
threatening the planet’s future liveability. The planetary boundaries frame-
work of Steffen and colleagues (2015) defines a safe operating space for
humanity within the boundaries of nine productive ecological capacities of
the planet. The framework is based on the intrinsic biophysical processes that
regulate the stability of the Earth system on a planetary scale. The medium
dark zone in Figure 1.2 is the safe operating space, light grey represents the
zone of uncertainty (increasing risk), and dark indicates the zone of high risk.
Table 1.1 specifies the control variables and quantifies the ecological ceilings.
Applying the precautionary principle, the planetary boundary itself lies at
the intersection of the medium dark and light grey zones. To illustrate how the
framework works, we look at the control variable for climate change, the
atmospheric concentration of GHGs. The zone of uncertainty ranges from
350 to 450 parts per million (ppm) of carbon dioxide. We crossed the
planetary boundary of 350 ppm in 1995, with a level of 399 ppm in 2015,
and are adding at a rate of around 3 ppm every year. The upper limit of 450
ppm is consistent with the goal (at a fair chance of 66 per cent) to limit global

G enetic Climate change

diversity
Bios phere integrity
N ovel entities
Functional
diversity
?
?

Land-system Stratospheric ozone depletion

change

?
Atmospheric aerosol loading
Freshw ater use

Phosphorus
O cean acidification
Bioc hemical fl ow s N itrogen

Beyond zone of uncertainty (high risk) Below boundary (safe)

In zone of uncertainty (increasing risk) Boundary not yet q uantified

Figure 1.2 The planetary boundaries

Source: Steffen et al. (2015).
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 9

Table 1.1 The ecological ceiling and its indicators of overshoot

Current value and
Earth system pressure Control variable Planetary boundary trend

Climate change Atmospheric carbon dioxide At most 350 ppm 399 ppm and rising
concentration; ppm (worsening)
Biosphere loss Genetic diversity: rate of species At most 10 Around 100–1,000
extinction per million species per and rising
year (worsening)
Functional diversity: Biodiversity Maintain BII at 90% 84% applied to
Intactness Index (BII) Southern Africa only
Land-system change Area of forested land as a At least 75% 62% and falling
proportion of forest-covered land (worsening)
prior to human alteration
Freshwater use Blue water consumption; cubic At most 4,000 km3 Around 2,600 km3
kilometres per year and rising
(intensifying)
Biochemical  ows Phosphorus applied to land as At most 6.2 million Around 14 million
fertilizer; millions of tons per year tons tons and rising
(worsening)
Reactive nitrogen applied to land At most 62 million Around 150 million
as fertilizer; millions of tons per tons tons and rising
year (worsening)
Ocean acidification Average saturation of aragonite At least 80% Around 84% and
(calcium carbonate) at the ocean falling (intensifying)
surface, as a percentage of pre-
industrial levels
Air pollution Aerosol optical depth; much _ _
regional variation, no global level
yet defined
Ozone layer depletion Concentration of ozone in the At least 275 DU 283 DU and rising
stratosphere; in Dobson Units (DU) (improving)
Novel entities No global control variable yet _ _
(e.g. chemical defined
pollution)

Source: Steffen et al. (2015).

warming to 2°C above the pre-industrial level and lies at the intersection of the
light grey and dark zones.
Another example of increasing risk in the light grey zone is land-system
change. The control variable is the area of forested land as a proportion of
forest-covered land prior to human alteration. The planetary boundary is at 75
per cent, while we are currently at 62 per cent and the percentage is falling.
The current linear production and consumption system is based on extrac-
tion of raw materials (take), processing into products (make), consumption
(use), and disposal (waste). Traditional business models centred on a linear
system assume the ongoing availability of unlimited and cheap natural
resources. This is increasingly risky because non-renewable resources, such
10 PRINCIPLES OF SUSTAINABLE FINANCE

as fossil fuels, minerals, and metals, are increasingly under pressure, while
potentially renewable resources, such as forests, rivers, and prairies, are
declining in their extent and regenerative capacity.
Moreover, the use of fossil fuels in the linear production and consumption
system overburdens the Earth system as natural sink (absorbing pollution).
Baseline scenarios (i.e. those without mitigation) for climate change result in
global warming in 2100 from 3.7° to 4.8° Celsius compared to the pre-industrial
level (IPCC, 2014). Figure 11.6 in Chapter 11 depicts this high emission scenario.
With this linear economic system we are crossing planetary boundaries
beyond which human activities might destabilize the Earth system. In par-
ticular, the planetary boundaries of climate change, land-system change
(deforestation and land erosion), biodiversity loss (terrestrial and marine),
and biochemical flows (nitrogen and phosphorus, mainly because of intensive
agricultural practices) have been crossed (see Figure 1.2). A timely transition
towards an economy based on sustainable production and consumption,
including use of renewable energy, reuse of materials, and land restoration,
can mitigate these risks.

1.2.2 SOCIAL FOUNDATIONS

Mass production in a competitive economic system has led to long working
hours, underpayment, and child labour, first in the developed world and later
relocated to the developing world. Human rights provide the essential social
foundation for all people to lead lives of dignity and opportunity. Human
rights norms assert the fundamental moral claim each person has to life’s
essentials, such as food, water, health care, education, freedom of expression,
political participation, and personal security. Raworth (2017) defines social
foundations as the 12 top social priorities, grouped into three clusters, focused
on enabling people to be: (i) well: through food security, adequate income,
improved water and sanitation, housing, and health care; (ii) productive:
through education, decent work, and modern energy services; and (iii)
empowered: through networks, gender equality, social equity, having a political
voice, and peace and justice.
While these social foundations only set out the minimum of every human’s
claims, sustainable development envisions people and communities prosper-
ing beyond this, leading lives of creativity and fulfilment. Sustainable develop-
ment combines the concept of planetary boundaries with the complementary
concept of social foundations or boundaries. It means that current and future
generations have the resources needed, such as food, water, health care, and
energy, without stressing processes within the Earth system (Raworth, 2017).
But many people are still living below the social foundations of no hunger,
no poverty (a minimum income of $3.10 a day), access to education, and
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 11

access to clean cooking facilities (see Table 1.2). More broadly, political
participation, which is the right of people to be involved in decisions that
affect them, is a basic value of society. The UN’s Universal Declaration of
Human Rights states that ‘recognition of the inherent dignity and of the equal
and inalienable rights of all members of the human family is the foundation of
freedom, justice and peace in the world’. Human rights are an important social
foundation. Next, decent work can lift communities out of poverty and
underpins human security and social peace. The 2030 Agenda for Sustainable
Development (see Section 1.2.3) places decent work for all people at the heart
of policies for sustainable and inclusive growth and development. Decent work
has several dimensions: a basic living wage (which depends on a country’s
basic living basket), no discrimination (e.g. on gender, race, or religion), no
child labour, health and safety, and freedom of association.
From a societal perspective, it is important for business to respect these
social foundations and to ban underpayment, child labour, and human right
violations. Social regulations forbidding these practices have been introduced
in developed (high- and medium-income) countries, but these practices are
still happening in developing (low-income) countries. A case in point is the
use of child labour in factories in low-income countries producing consumer
goods, like clothes and shoes, to be sold by multinational companies in high-
and medium-income countries. These factories often lack basic worker safety
features (Box 1.2). Another example is the violation of the human rights of
indigenous people, often in combination with land degradation and pollution,
by extractive companies in the exploration and exploitation of fossil fuels,
minerals, and other raw materials.
Kate Raworth (2017) has summarized the social foundations and planetary
boundaries in the Doughnut, which shows how the safe and just space for
humanity lies between the social foundation of human well-being and the
ecological ceiling of planetary pressure (see Figure 1.3). Table 1.1 specifies the
ecological ceiling and Table 1.2 the social foundation.

1.2.3 SUSTAINABLE DEVELOPMENT

To guide the transition towards a sustainable and inclusive economy, the
UN has developed the 2030 Agenda for Sustainable Development (UN,
2015). The 17 UN SDGs stimulate action over the 2015–30 period in areas
of critical importance for humanity and the planet. To facilitate implementa-
tion, the 17 high-level goals are specified in 169 targets (see https://
sustainabledevelopment.un.org/topics/sustainabledevelopmentgoals).
Following Rockström and Sukhdev (2016), we classify the SDGs according
to the levels of the economy, the society, and the environment. Nevertheless,
we stress that the SDGs are interrelated. A case in point is the move to
12 PRINCIPLES OF SUSTAINABLE FINANCE

climate
change

r GICAL CEILIN
ye ECO LO G
ac o
id cea
la n ifi n
e io
on let ca
tio
oz ep just space for
d and hu
n
afe ma T
e s L FO U N D A ni OO
h CIA TI R SH
t SO ON VE
O

ty
w ater food

energy health
air pollution

chemic
polluti
L
AL
TF
O R education

on
al
netw orks H
S

income
housing
& w ork

gender peace &

g
a d in
equalit y justice
social
b io los

political

ru &
s lo
equit y

sp gen
div s

voice
EG
ers

ho itro
Y

ho
EN OM
ity

ER ON

n
AT C
IV E AN V EE p
D D ISTR IB U TI

r
la
conv nd ate s
hw l
ersio fres draw a
n i t h
w

Figure 1.3 The doughnut: the safe and just space for humanity
Source: Raworth (2017).

sustainable consumption and production (economic goal 12) and sustainable

cities (societal goal 11), which are instrumental to combat climate change
(environmental goal 13). Another example is an appropriate income and
decent work for all (economic goal 8), which is instrumental in attaining
societal goals 1 to 4. Through a living wage, households can afford food,
health care, and education for their family.
The 17 UN SDGs are as follows (UN, 2015):

Economic goals
• Goal 8. Promote sustained, inclusive, and sustainable economic growth, full
and productive employment and decent work for all.
• Goal 9. Build resilient infrastructure, promote inclusive, and sustainable
industrialization and foster innovation.
• Goal 10. Reduce inequality within and among countries.
• Goal 12. Ensure sustainable consumption and production patterns.
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 13

Table 1.2 The social foundation and its indicators of shortfall

Illustrative indicator
Dimension (% of global population unless otherwise stated) % Year

Food Population undernourished 11% 2014–16

Health Population living in countries with under-five mortality rate 46% 2015
exceeding 25 per 1,000 live births
Population living in countries with life expectancy at birth 39% 2013
of less than 70 years
Education Adult population (aged 15+) who are illiterate 15% 2013
Children aged 12–15 out of school 17% 2013
Income and work Population living on less than the international poverty 29% 2012
limit of $3.10 a day
Proportion of young people (aged 15–24) seeking but not 13% 2014
able to find work
Water and sanitation Population without access to improved drinking water 9% 2015
Population without access to improved sanitation 32% 2015
Energy Population lacking access to electricity 17% 2013
Population lacking access to clean cooking facilities 38% 2013
Networks Population stating that they are without someone to count 24% 2015
on for help in times of trouble
Population without access to the Internet 57% 2015
Housing Global urban population living in slum housing in 24% 2012
developing countries
Gender equality Representation gap between women and men in national 56% 2014
parliaments
Worldwide earnings gap between women and men 23% 2009
Social equity Population living in countries with a Palma ratio of 2 or 39% 1995–2012
more (the ratio of the income share of the top 10% of
people to that of the bottom 40%)
Political voice Population living in countries scoring 0.5 or less out of the 52% 2013
1.0 in the Voice and Accountability Index
Peace and justice Population living in countries scoring 50 or less out of 100 85% 2014
in the Corruption Perceptions Index
Population living in countries with a homicide rate of 10 or 13% 2008–13
more per 10,000

Source: Raworth (2017).

Societal goals
• Goal 1. End poverty in all its forms everywhere.
• Goal 2. End hunger, achieve food security and improved nutrition, and
promote sustainable agriculture.
• Goal 3. Ensure healthy lives and promote well-being for all at all ages.
• Goal 4. Ensure inclusive and equitable quality education and promote
lifelong learning opportunities for all.
14 PRINCIPLES OF SUSTAINABLE FINANCE

• Goal 5. Achieve gender equality and empower all women and girls.
• Goal 7. Ensure access to affordable, reliable, sustainable, and modern energy
for all.
• Goal 11. Make cities and human settlements inclusive, safe, resilient, and
sustainable.
• Goal 16. Promote peaceful and inclusive societies for sustainable develop-
ment, provide access to justice for all, and build effective, accountable, and
inclusive institutions at all levels.

Environmental goals
• Goal 6. Ensure availability and sustainable management of water and
sanitation for all.
• Goal 13. Take urgent action to combat climate change and its impacts.
• Goal 14. Conserve and sustainably use the oceans, seas, and marine
resources for sustainable development.
• Goal 15. Protect, restore, and promote sustainable use of terrestrial ecosys-
tems, sustainably manage forests, combat desertification, halt and reverse
land degradation, and halt biodiversity loss.

Overall goal
• Goal 17. Strengthen the means of implementation and revitalize the Global
Partnership for Sustainable Development.

1.2.3.1 Global strategy

The UN SDGs are the global strategy of governments under the auspices of the
UN and provide direction towards (future) government policies, such as
regulation and taxation of environmental and social challenges. The global
strategy is boosted by technological change (e.g. the development of solar and
wind energy and electric cars at decreasing cost), which supplements govern-
ment policies (e.g. carbon pricing). Some companies are preparing for this
transition (future makers) and are part of the solution (Mercer, 2015). Other
companies are waiting for the transition to unfold before acting (future
takers). A final category of companies is unaware of this transition and
continues business as usual. They are part of the problem.
We, as authors, attach a positive probability to the scenario that the SDGs
are largely met. Our observation is based on the success of the earlier Millen-
nium Development Goals in reducing poverty, hunger, and child death rates
in Southeast Asia and Latin America, and even to a large extent in Africa
(Rosling, 2018). Of course, opinions can and do differ about the probability
that the transition towards a sustainable economy will largely succeed. But
the status quo scenario, which assumes no transition, is highly implausible.
While the pathway and the speed of the transition are uncertain and may even
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 15

ECON OM Y

SOCIETY

EN V IRON M EN T

Figure 1.4 Sustainable development challenges at different levels

Source: Adapted from Rockström and Sukhdev (2016).

be erratic, with failures along the way, the sustainable development agenda
gives direction to thinking about the future. This book is about the role finance
(investors and lenders) can play in shaping this future and making production
and consumption more sustainable.
The UN SDGs address challenges at the level of the economy, society, and
the environment (or biosphere). Figure 1.4 illustrates the three levels and
the ranking between them. A liveable planet is a precondition or foundation
for humankind to thrive. Next, we need a cohesive and inclusive society to
organize production and consumption in order to ensure enduring prosperity
for all. In their seminal book Why Nations Fail, Acemoglu and Robinson
(2012) show that political institutions which promote inclusiveness generate
prosperity. Inclusiveness allows everyone to participate in economic oppor-
tunities. Reducing social inequalities is thus an important goal (goal 10). Next,
there can be resource conflicts: unequal communities may disagree over
how to share and finance public goods. These conflicts, in turn, break social
ties and undermine the formation of trust and social cohesion (Barone and
Mocetti, 2016).
Gladwin, Kennelly, and Krause (1995) define five principles of sustainable
development:
1. Comprehensiveness: the concept of sustainable development is holistic or
all-embracing in terms of space, time, and component parts. Sustainability
embraces both environmental and human systems, both nearby and far-
away, in both the present and the future.
16 PRINCIPLES OF SUSTAINABLE FINANCE

2. Connectivity: sustainability demands an understanding of the world’s

challenges as systemically interconnected and interdependent.
3. Equity: a fair distribution of resources and property rights, both within and
between current and future generations.
4. Prudence: keeping life-supporting ecosystems and interrelated socioeco-
nomic systems resilient, avoiding irreversible actions, and keeping the scale
and impact of human activities within regenerative and carrying capacities.
5. Security: sustainable development aims at ensuring a safe, healthy, high
quality of life for current and future generations.
Although sustainable development is a holistic concept, Norström and col-
leagues (2014) argue that trade-offs between the ambition of economic, social,
and environmental goals and the feasibility of reaching them, recognizing
biophysical, social, and political constraints, should be addressed.

1.2.4 SYSTEM PERSPECTIVE

While it is tempting to start working on partial solutions at each level,
environmental, societal, and economic challenges are interlinked. It is import-
ant to embrace an integrated social-ecological system perspective (Norström
et al. 2014). Such a perspective highlights the dynamics that such systems
entail, including the role of ecosystems in sustaining human well-being, cross-
system interactions, and uncertain thresholds.
Holling (2001) describes the process of sustainable development as embed-
ded cycles with adaptive capacity. A key element of adaptive capacity is the
resilience of the system to deal with unpredictable shocks (which is the
opposite of the vulnerability of the system). An adaptive cycle that aggregates
resources and periodically restructures to create opportunities for innovation
is a fundamental unit for understanding complex systems, from cells to
ecosystems. But some systems are maladaptive and trigger, for example, a
poverty trap or land degradation (i.e. the undermining of the quality of soil as
a result of human behaviour or severe weather conditions). Holling (2001)
concludes that ecosystem management via incremental increases in efficiency
does not work. For transformation, ecosystem system management must build
and maintain ecological resilience as well as social flexibility to cope, innovate,
and adapt.

1.2.4.1 Examples of cross-system interactions

and uncertain thresholds
As we have argued, economic, social, and environmental systems interact.
A well-known example of cross-system interaction is the linear production of
consumption goods at the lowest cost, which contributes to ‘economic growth’
 SUSTAINABILITY AND THE TRANSITION CHALLENGE 17

while depleting natural resources, using child labour, and producing carbon
emissions and other waste. In this book, we use carbon emissions as shorthand
for all GHG emissions, which include carbon dioxide CO2, methane CH4, and
nitrous oxide N2O.
Another example of cross-system interaction is climate change, leading to
more and more intense weather-related disasters, such as storms, flooding,
and droughts. The low- and middle-income countries around the equator are
especially vulnerable to these extreme weather events, which could damage a
large part of their production capacity. The temporary loss of tax revenues,
and increase in expenditure to reconstruct factories and infrastructure, might
put vulnerable countries into a downward fiscal and macro-economic spiral
with an analogous increase in poverty. Social and environmental issues are
thus interconnected, whereby the poor in society are more dependent on
ecological services and are less well protected against ecological hazards.
A related example is land degradation in the form of soil erosion, saliniza-
tion (exacerbation of natural soil salinity level), peatland and wetland drain-
age, and forest degradation. The resulting damage is estimated at $6.3 trillion a
year (8.3 per cent of global GDP) in lost ecosystem service value, which
includes agricultural products, clean air, fresh water, climate regulation, rec-
reational opportunities, and fertile soils (Sutton et al. 2016). Land degradation
also exacerbates losses in biodiversity and jeopardizes the livelihoods of half a
billion mostly poor people who depend on forests and agricultural land.
Declining land productivity undermines sustainable development, threatens
food and water security, and leads to involuntary human migration and even
civil conflict.
An example of an uncertain threshold combined with feedback dynamics is
the melting threshold for the Greenland ice sheet. New research has found that
it is more vulnerable to global warming than previously thought. Robinson,
Calov, and Ganopolski (2012) calculate that a 0.9°C of global temperature rise
from today’s levels could lead the Greenland ice sheet to melt completely. Such
melting would create further climate feedback in the Earth’s ecosystem,
because melting the polar icecaps could increase the pace of global warming
(by reducing the refraction of solar radiation, which is 80 per cent from ice,
compared with 30 per cent from bare earth and 7 per cent from the sea) as well
as rising sea levels. These feedback mechanisms are examples of tipping points
and shocks, which might happen.
An important conclusion from this section is that we cannot understand
sustainability of organizations in isolation from the socioecological system in
which they are embedded: What are the thresholds, sustainability priorities,
and feedback loops? Moreover, as well as the socio-environmental impact
of individual organizations, we should also consider the aggregate impact of
organizations at the system level (see Section 4.2 in Chapter 4). The latter is
relevant for sustainable development.
18 PRINCIPLES OF SUSTAINABLE FINANCE

1.3 The role of the financial system

How can the financial system facilitate decision-making on the trade-offs
between economic, social, and environmental goals? Levine (2005) lists the
following functions of the financial system:

• Produce information ex ante about possible investments and allocate

capital.
• Monitor investments and exert corporate governance after providing
finance.
• Facilitate the trading, diversification, and management of risk.
• Mobilize and pool savings.
• Ease the exchange of goods and services.

The first three functions are particularly relevant for SF. The allocation of
funding to its most productive use is a key role of finance. Finance is therefore
well positioned to assist in making strategic decisions on the trade-offs
between sustainable goals. While broader considerations guide an organiza-
tion’s strategy on sustainability, funding is a requirement for reaching
sustainable goals.
Finance plays this role at different levels. In the financial sector, banks, for
example, define their lending strategy regarding which sectors and projects are
eligible for lending and which are not. Similarly, investment funds set their
investment strategy, which directs in which assets the fund invests and in
which assets they do not. The financial sector can thus play a leading role in
the transition to a low-carbon and more circular economy. If the financial
sector chooses to finance sustainable companies and projects, they can accel-
erate the transition.
In terms of monitoring their investments, investors can also influence the
companies in which they invest. Investors thus have a powerful role in
controlling and directing corporate boards. The governance role also involves
balancing the many interests of a corporation’s stakeholders. In Section 1.4, we
review the progressive thinking about how interests should be balanced,
including the interests of the environment and society. A rising trend in
sustainable investment is engagement with companies in the hope of reducing
the risk of adverse events occurring in those companies.
Finance is good at pricing the risk of future CFs for valuation purposes. As
there is inherent uncertainty about environmental issues (e.g. exactly how
rising carbon emissions will affect the climate, and the timing and shape of
climate mitigation policies), risk management can help to deal with these
uncertainties. Scenario analysis is increasingly used to assess the risk and
valuation under different scenarios (e.g. climate scenarios; see Chapter 2).
When the potential price of carbon emissions in the future becomes clearer,
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uit te noodigen, met hem mee omlaag te dalen naar de
stookplaatsen, om me eens te laten zien, wat het wel te beteekenen
heeft, een modern schip te s t o k e n .

't Was een tocht als ter hellevaart! Het schip zelf is groot en mooi,
met zijn breede gangen en ruime dekken, de salons en trappen, met
eetzalen en halls; overal de weeldeversiering en de zor[a159]gelijke
bediening, zoodat je het idée "schip" al dadelijk kwijt bent, en je je in
een weelderige buitenplaats gelogeerd denkt. Maar daar voert de
scheepsingenieur me de lange gangen door, de trappen af, veel
lager dan de passagiersverdiepingen. Door ijzeren deuren, die
middenin het schip een soort van gepantserde gevangenis afsluiten,
kom je in de machineruimten. Onder je voeten, door een vloer van
ijzeren stangen, zie je het snelle geflits van blinkende dingen, die
met lange zuchtende armslagen omlaag en omhoog springen; in
diepe ronde deksels kruipen zij weg, en bliksemsnel schieten ze
omhoog, alsof het een woeste uitval naar je is. Steile gladde trapjes
voeren nog dieper. En nu gaat de verdere tocht langs vreeslijke
raderen, die geluidloos rondsuizen, een blinkenden cirkel met hun
wentelende glimspaken beschrijvend. Overal drijven lange stangen
zware metalen stoothamers vooruit; hun gladde geluidloosheid, met
niets dan het zachte slurpende geluid van de vette olie, die overal
neerdruipt, geeft er iets geheimzinnig-angstigs aan. Daar is dan een
laag ijzeren deurtje, waar je bukkend door moet kruipen; meteen
slaat een vette benauwde[a160] stikkend-zware hitte je tegen. Langs
een hoogen, zwarten ketelwand, zóó heet, dat je zoover mogelijk
terugdeinst tegen het ijzeren beschot, moet je nog verder.
 En eindelijk sta je in een schemerlichte, rumoerige ruimte, waar
vuile kerels, onherkenbaar zwart hun spookgezichten, groote vuile
plekken op hun naakte lijven, voor de woeste hitte van de ronde
open haarddeuren werken. Met lange stangen wroeten zij in die
vlamkuilen, tot een vurige vonkenregen vooruit stuift, en over den
vloer rondspat. Overal staan groote zwarte hoo[a163]pen steenkool
op den grond. Zonder rusten scheppen zij, als mijnwerkers onder in
de aarde, hun schoppen er in, zwaaien schep na schep de steenkool
in de blakerende brand-muilen. Telkens kleppert met mokerend
geluid de haarddeur dicht; maar dadelijk rammelt daarnaast weer
een andere open. En zonder ophouden scheppen de schoppen er
het zwarte gruis in.

Hoe vlugger ze werken, hoe dieper ze elken schopvol met

steenkool in den vuurhaard mikken, hoe handiger ze met hun
stangen de gloeihitte onder den ketel weten uit te spreiden, des te
grooter hitte geven de haarden, des te meer stoom leveren de
ketels, en des te sneller klieft ons schip het water.
 Toen ik weer boven op dek kwam, na eerst het morspak
uitgetrokken en mij van rook, gruis en olie gereinigd te hebben, was
er een wandelconcert op het open tweede-dek. De muziekkapel
speelde een vroolijk programma; de passagiers wandelden druk
pratend het lange dek af. In den rooksalon hadden eenige
ondernemende Amerikanen een weddingschap aangegaan om vijftig
dollar op de vaart van het schip. Toen de uitslag bekend[a164] werd
gemaakt, was er een algemeen gemopper, dat er niet harder
gestoomd werd.

Een lawaaiïg heer, die met Duitschen tongval

Engelsch sprak, schold, met z'n sigaar in duur bandje
tusschen de tanden, op het geluier van die
beunhazen beneden in de stookplaatsen, die het
schip eenige uren zouden doen missen bij aankomst
thuis.

Wat me niet minder aan boord trof waren m'n medereizigers, de

derde-klas-passagiers. Ze zijn op het voorschip gehuisvest. Overdag
leven ze op het dek van dit scheepsgedeelte. Van de hooge
verschansing, die het promenadedek afsluit, kun je omlaag kijken als
in een kuil. Daar zie je dan beneden, hoe al die armoe op elkaar
hokt, en den langen dag maar troosteloos zit uit te staren over de
groote, zwijgende zee. Het zijn voor het meerendeel
beklagenswaardige menschen, omdat de meesten landverhuizers
zijn, die naar hun vaderland in Europa terugkeeren, nadat zij in
Amerika niet geslaagd zijn om werk te vinden.[a168]

Op de heenreis, naar Amerika, bestond er nog altijd de hoop, die

hen ophield; ze waren wel arm en mislukt, ook ontmoedigd uit hun
vaderland vertrokken; doch het nieuwe vaderland liet immers alles
verwachten met zijn lokkenden naam: Amerika!

Nu zij daar echter ook mislukten, nog meer verarmden, hun laatste
restje moed verloren hadden, leidt hun laatste tocht hen naar het
vaderland terug!
 Maar dan is ook alle fut en kracht, alle moed er uit. Zoo'n troep
huiswaarts keerende landverhuizers, ouwe mannen, vermoeide
vrouwen, onverschillige jonge-kerels, uitgezwakte kinderen daar bij
elkaar te zien zitten, is het ellendigste wat jullie je bedenken kunt,
omdat je weet, dat zelfs het laatste schijntje hoop hun ontnomen
werd. 't Is dan niets anders dan nog een restje menschelijk uitschot,
zoodat je medelijden om hunnent wille je in opstand brengt tegen al
die promenade-concerten en de weelde der salons, tegen de
smulpartijen aan tafel. Maar zelfs wanneer je gevoel zich door hun
ellende mocht laten verteederen, dan zijn er de zware hekken, welke
de verschillende[a169] klassen van elkaar scheiden; en is er ook nog
een bordje, net als in "Artis", waarop geschreven staat: "het is ten
strengste verboden, voorwerpen naar de derde-klas-passagiers te
werpen."

[a170]
 Ik vaar gelijk een held nae veer gelegen kusten,
Was het niet om het geld, veel liever zou ik rusten.
En blijven op het land en houden mijn gemak
En drinken een glas wijn of rook een pijp toebak.

—o—

De schipper zeilt in zee, de koopman blijft aan strant, Zoo gaat de

koopman voort te waater en te lant.

—o—
[a173]

In 't kouwe Groenlant in Straat Davis vangt men vis Daar hondert
man aan één genoeg had op den dis.

—o—

Klaas Joosten van der Marken is schipper van dees schuit, Om met
Gods zegen te varen, daar zijn wij over uit; 'k Wensch maar een
goede vracht, om eerlijk van te leven. Ik hoop de Hemel zal mij die
ook altyt geven. Wij varen altyt voort of 't droog is ofte diep; De jager
slaat maar deur; de wind zit in de zwiep.

—o—

De mensch, die seilt sijn coerse wel,

Die Godt neemt tot zijn metgezel.

—o—

Moog Sint Pieters Scheepje hellen,

Toch zal 't nooit vergaan,
Blijf op God uw hope stellen,
Gij zult vast en zeker staan.
 —o—
[a174]

Die wil varen en sijn getije niet can gissen,

Noch sijn tou can splissen,
Noch sijn geit en can bewaren,
Die en dient op alle uuren niet te vaeren.

—o—

Heyl hem, die op Godt vertrout,

En op nering schepen bouwt.
Maar die een Schip wel bouwen kan,
Dat is een Meester Timmerman.

—o—

"Door de keel
Kan veel!"
Sprak kaptein Vanderhoopen,
Want hij zag
Op een dag,
Dat hij zijn driemaster had verzopen.

[a175]
 D'r zijn menschen, die al zeeziek worden bij de lucht van een
botboerkar. Je zou zoo iets o v e r gevoeligheid kunnen noemen.

Zóó erg ben ik niet!... Maar toch kan ik slechts weinig zeelucht
verdragen. Dat is spijtig. En wel omdat ik juist zoo heel veel van de
zee hou'. Maar niet van de zee- z i e k t e !...

Daar lokt die zee, met altijd weer haar krachtigen golfslag; zee
tegen, zee van achter, zee aan bakboord, zee aan stuurboord.

Is er prachtiger bewegelijkheid denkbaar?.... want zoo ben ik toch

ook weer, dat als een zee zònder golfslag en glad ligt, zoo'n
beweginglooze zee me maar als half ècht voorkomt!

Dus ben ik onverbeterlijk. Telkens wanneer ik tegenover die zee

sta, bedenk ik weer een tochtje,[a178] al is het maar 'n spelevaartje
van één dag, mits ik op dien wijden plas mag.

Maar ook onverbeterlijk ben ik dan, wat m'n zeeziekte betreft. Nog
geen uur, of...

Maar laat ik jullie vertellen!

Ik herinner me, hoe ik eens een indruk wilde wekken omtrent mijn
algemeene bevarenheid ter zee. Tegenover me had ik een
eenvoudig man, die wel àlles had willen gelooven wàt ik hem ook
maar zou verteld hebben, — ... slechts dit ééne geloofde hij niet!
 't Was schipper Schaap uit Huizen. En toen
we samen waren uitgevaren op zijn bottertje,
van het bijna verzande Zuiderzee-haventje van
ons Gooische kustplaatsje, wilde ik hem al den
eersten avond aan boord, onder het maal van
roggebrood met gebakken bot, gaan vertellen,
dat degeen, dien hij als passagier aan boord
had, maar niet zoo'n gewone landrot was;
maar dat ik gevàren had, àlle wereld-zeeën
over!

Hij begon er eigenlijk zelf over; want toen hij

wat lang moest blazen over den rand van zijn[a181] kommetje koffie,
nog te heet om te drinken, — en haast hadden we ook volstrekt niet,
omdat ik geteekend had voor minstens een week, om het leven van
een botvisscher op onze Zuider-zee eens op m'n gemak af te kijken,
— toen sprak hij goedig, na me zijn ouwe verhalen van bijna zestig
jaar varen op dien plas te hebben verteld:

"En jij, mejong, dat zel hier wel je eerste vaart zijn op 't zoute water,
wàt?"

"Nee!" zei ik. Ik houd niet van opsnijden, bij voorkeur niet tegenover
eenvoudige menschen; maar ik wilde mijzelf op dit oogenblik een
houding geven. — "Neen!" herhaalde ik, "schipper Schaap, daar zou
je je nou net mee vergissen!"

"Hè-je méér zee 'ézien!?" deed hij ongeloovig.

"Meer dan je zou denken," sprak ik, een weinig gewichtiger dan
hier juist noodig scheen; maar schipper Schaap moest het maar
aanstonds weten.

"Kom nou!" grinnikte hij nog ongelooviger; hij had een slok koffie
genomen, spoelde er met bolle wangen z'n mond mee. "Kom nou!",
spotte hij met zijn glundere oogjes, en hij spoelde den teug in-eens
naar binnen, "wou jij er 'n ouwe botvisscher tussche neme?"[a182]
 Ik gevoelde me een weinig geprikkeld; ik houd ervan, dat
menschen, die naar me luisteren, me ook gelooven zullen,
tenminste, dat ze zich gedragen, a l s o f ze me gelooven. Dus sprak
ik op een toon, die in het lage roefje van de botboot wat gezwollen
moet geklonken hebben:

"Ik heb zelfs véél gevaren!"

"Hê je waarachtig, mejonge?", vroeg Schaap, weer met dat kleine

twinkeltje in z'n oogen, wat ik niet kon verdragen. "Laat maar 's
hoore wàt jij al zoo gevare hèt." Hij keek strak in z'n kommetje,
waarin de koffie schommelde als een zwarte zee!

Dus begon ik met mijn opsomming:

"De Noordzee; ken jij die soms?"

"Nee," antwoordde schipper Schaap deemoedig, "alleen van

hooren zeggen; tegeswoordig gaat er veel jong volk op de trawlers
mee naar buiten. Maar ik ben nooit zoo ver van 'uis 'eweest."

"Meer dan ééns ben ik naar Engeland overgestoken, dan eens van
Amsterdam uit, dan weer van den Hoek, ook wel over Vlissingen."

"Sjonge! Sjonge!", schudde de ouwe schipper z'n hoofd, "hê-je?"

[a183]

Hij spotte nu niet meer, maar aan zijn turen in de koffie-kom

meende ik toch te merken, dat ik hem nog niet geheel overtuigd had.
Ik zou hem den vollen laag moeten geven. Ik herinnerde me een
zekere jeugd-reis naar den Levant.

"Als jongen al heb ik een groote zeereis gemaakt," somde ik op,

"het Engelsche Kanaal door, de Golf van Biscaye met Kaap
Finistère, Afrika met den Apenberg, en aan den anderen kant
Gibraltar op den hoogen rots, de Italiaansche kust langs, dan
Griekenland, Turkije, Klein-Azië, langs de Afrikaansche noordkust
terug..."
 Schipper Schaap had zijn koffie leeg-gedronken; hij schudde
langzaam z'n ouwe hoofd.

"Wat 'n lande, mejong!... En dat wou je allemaal 'evare hebbe?"

Hij was bepaald ergerlijk ongeloovig, die ouwe Zuider-Zee-vaarder.

Ik ging echter voort, terwijl mijn stem nog altijd gezwollener klonk
dan mijn bedoeling was:

"Den Atlantischen Oceaan ben ik overgestoken naar Amerika..."

"Heb je dàt water ook al bevaren?" vroeg hij.

Ik vervolgde: "Tusschen Amerika en Azië ligt[a184] de Stille

Oceaan..."

"Sjonge! Sjonge!", schuddebolde Schaap over zijn leege koffie-

kom; "wat 'n water op de wereld toch! Ben je daar òvèràl 'eweest?"

"Dwars overgestoken van San Francisco naar Yokohama, in 'n

dikke twee weken, met slechts één etmaal op Hawaï...."

Hij scheen nu toch onder den indruk te komen. Dus vervolgde ik

triomfantelijk:

"Heb je wel 's gehoord van de Gele Zee, schipper?"

"Is 't water daar geel?", vroeg hij terug.

"Nee," zei ik; "maar de Chineezen en de Japanners wonen daar in

de buurt, en daarom noemen ze 't er zoo, denk ik."

Schipper Schaap schudde nog altijd zijn ouwen grijzen kop.

"Sjonge, Sjonge!" dee-die; "je vertelt me daar wat 'n wonders!...

Maar wil i k je nou 'rs wat vertelle?"

"Nu?" antwoordde ik, half ongeduldig, half nieuwsgierig wat er zou

volgen.
 "Wel me-jong, ik 'eloof d'r niet één woord van."[a185]

"Wat!... Waarom niet?!"

Hij veegde zijn dunne, spottende lippen droog met den achterkant
van zijn eeltige hand, sprak rustig:

"Dat zal ik zegge, mejong... As jij dat àlles 'ezien 'êt!... a s jij al die
groote zeeën van de wereld gevaren zou willen hebbe, — .... wel,
dan zou jij hier, op dit ongelukkige plasje water, dat ze Zuijer-Zee
noeme, d'r niet uitzien als[a188] 'n grauwe, erwt, die 'n weeklang in
'n regenton te weeken hèt 'elegen... En nou jij!"

Ik heb op dat oogenblik gedacht aan een humeurigen uitval naar

dien braven ouwen Schipper Schaap. Maar ik bedacht me, ik
beheerschte me; ik zei niets.

Want waarachtig, — Schipper Schaap had op dat oogenblik gelijk!

 Ik was al wéér zee-ziek![a189]

Shimonoseki! ... wie van jullie heeft dezen naam gehoord, hetzij bij
de aardrijkskunde — , dan wel in de geschiedenis-les?

Shimonoseki! voor ons land is het de herinnering van al meer dan

50 jaar geleden, aan een kranig staaltje van marinedurf; voor Japan
beteekent Shimonoseki den aanvang van een groote omwenteling in
de tweede helft der negentiende eeuw, welke dit land van een
achterlijke oostersche mogendheid, binnen den tijd van een halve
eeuw tot een van de voornaamste wereld-mogendheden deed
klimmen.

Ik zie geen kans, jullie in dit boekje, gewijd aan enkele belangrijke
gebeurtenissen van Nederlands[a193] zee-geschiedenis uit den
laatsten tijd, uitvoerig te vertellen het indertijd roemrijk avontuur van
Shimonoseki; maar het is aardig dat ik het jullie wel in het kort kan
vertellen, opgeschreven uit den mond van den laatsten overlevende.
 Hoe deze het me vertelde, moeten jullie hier maar lezen!

Ik verlangde naar een levend en kleurrijk verhaal, naar het relaas

van de zèlf-beleefde en nu zelf-na-vertelde gebeurtenissen uit dien
Japanschen oorlog.

Speelde ons land daarbij niet een belangrijke rol, omdat het op
ònze vlag was, dat de verraderlijke Japansche Daimios den aanslag
ondernamen? Was het niet een Nederlandsch oorlogsschip, de
"Medusa", dat toen het eerst en het hevigst in het vuur was
geweest? En was er niet nog één der opvarenden van dit schip in
leven, die mij er van zou kunnen vertellen?

Ik wist waar ik den man moest zoeken. Ik had uitgevischt, dat

ergens aan een der Amsterdamsche bruggen een heel oude man z'n
dagelijksch kostje ophaalde; de oud-matroos, krasse kerel van een
stuk in de tachtig, scharrelde z'n[a194] verdiensten bijeen als
karrentrekker! Zijn naam was ik ook te weten gekomen: hij heette
Jan van Beeren.

Ik stapte er op af, om m'n held van Shimonoseki te zoeken. Het

hoofd vol van zeemansverhalen en van bloedige episodes uit dien
zeeslag, waarbij ons Nederlandsche oorlogsschip zoo duchtig was
bekogeld, maar niettemin, dwars door den ijzeren regen heen, zijn
weg had vervolgd, om straks terug te keeren en bij de voorsten te
zijn, die het bombardement op de Japansche kustbatterijen
openden, deel te nemen aan de landing, welke de Japansche
troepen op de vlucht dreef, en hun geschut vernagelde.

Hij behoefde me niet van moeilijke Oostersche politiek, noch van

Japansche ingewikkelde staatsintriges te vertellen; ik was hiervan
behoorlijk op de hoogte. Wat ik hem slechts wilde vragen, was me te
vertellen zijn verhaal van oud-matroos aan boord van de "Medusa",
van dien eersten onverwachten overval, en daarna over de
tuchtiging der Japanners.

Een levende bladzijde krijgsgeschiedenis, een roemrijk, zelf-

beleefd hoofdstuk uit het verleden,[a195] verteld door een der
overlevenden, — dit verwachtte ik van hem!

Evenwel, ik had de méér dan vijftig jaren vergeten, die ons

scheidden van 1863. En vergeten was ik ook, hoe men in een halve
eeuw tot een ouden man kan worden; dat een armelijk sjouwerleven,
met sappelen om het dagelijksch brood, iemand zijn frischheid als
verteller kan doen verliezen; en ook, dat het baantje, om dag in dag
uit de groente- en bakkerskarren tegen een brug te helpen
optrekken, waarvoor soms een betaling, uit medelijden, met 1 cent
geschiedt, iemand het heldhaftige voorkomen van rustend zeeheld
kan doen verliezen.

Jan van Beeren, de karre-trekker van een der Amsterdamsche

bruggen, toont zich wel heel oud onder zijn last van jaren; als een
verarmde stakkerd ziet hij er uit. Over z'n sjofele smalle schouders
draagt hij het touw met den haak, waarmee hij de handkarren de niet
eens hooge brug helpt optrekken; in een hand draagt hij een
roestigen stang, welke vermoedelijk voor hetzelfde doel moet
dienen.

Hij stond er te wachten tot een kar de richting[a196] van de brug

zou nemen. Er reden op dit uur maar weinig karren voorbij. Een
enkele maal strompelde hij een van de gracht aanratelende handkar
tegemoet; maar telkens riep de man, die achter de kar te duwen liep:
"Nee, laat maar, ouwe!"; een paar maal riepen ze er bij: "Ik kan 't
alleen wel af!" En dan bleef het oude kereltje daar maar staan, de
pet diep op de grauw-grijze haren, het touw gestrengeld over de
magere schouders, weggedoken in het slobberjasje, de verzakkende
broek plooiïg over z'n schuiten van schoenen.

Toen stapte ik hem opzij, en keek hem in zijn verweerde,

vermoeide gelaat, waarin de oude oogen sufferig staarden, en
vroeg:
 "U is wel Jan van Beeren, niet?"

"Jawel..." zei-die, en hij schoof een bevende hand omhoog, om

naar zijn petrand te zoeken.

"Laat je saluut maar," probeerde ik gemoedelijk te doen.

"Jawel..." mummelde zijn ouwe slappe mondje terug.

"Ik heb van je gehoord," zei ik, luid en duidelijk, bij zijn verwezen
kijken; "je bent toch Jan[a198] van Beeren, die de geschiedenis van
de "Medusa" nog heeft meegemaakt?"

"Jawel, jawel..." verschrok hij zoo'n beetje, en langzaam keek-ie

rond naar weerskanten van de brug, of er geen klantjes wilden
geholpen wezen. Maar er was geen kar te zien.

"'t Is nou niet druk," trachtte ik te beginnen. Maar in-eens zei ik: "Je
moest er nu vandaag maar verder 'n vrijen dag van maken, Van
Beeren, en dan drinken we samen een glaasje bier, en rooken 'n
sigaartje, en als je wilt, vertel je me wat van die ouwe historie met je
"Medusa", want daar ben ik nieuwsgierig naar geworden, omdat het
net zoowat vijftig jaar geleden moet zijn, niet?"

Toen keek hij me weer aan, heel oud en ernstig met z'n slappe,
suffende oogen, en zei met bevend lip-geprevel:

"Ik drink geen bier, ziet-u ... enne rooke doen ik ook liever niet, ziet-
u..."

"Dat zei ik ook maar zoo, Van Beeren, en als je 't mij vraagt, heb ik
ook liever 'n kop warme koffie. Want 't is hier in Amsterdam nog
geen Japan, man!"[a199]

Maar die grap ging volstrekt niet op, omdat hij alweer de gracht
afkeek, of d'r geen kar aankwam, waaraan hij z'n centje zou kunnen
verdienen.
 "Kom nou!" monterde ik den ouwen man op; "laat ik je dat
daggeldje nou 's mogen betalen. En als we dan samen daar in het
Volkskoffiehuis op den hoek ons bakje troost gingen drinken?"

"Jawel..." mompelde hij.

En achter me aan strompelde hij de brug af naar het koffiehuis.

Daar hebben we lang en

langzaam over onze heete
koffie geblazen, en dat
smaakte den ouwen man en
mij wat goed, omdat het weer
zóó'n griemelige dag was, dat
het mummelmondje van het
ouwetje wel scheen te beven
van de kou.

Hij zei maar telkens weer:

"jawel ... jawel";[a202] en
soms wisselde hij dit af met
een bedenkelijk: "Vijftig jaar,
mot u bedenke, dat is nou
alweer zoo lang gelee', ziet u"...

Zoodat dit het on-succesvolste onderhoud was, dat ik ooit met

iemand voerde. En een geschiedkundige verhandeling zou ik het
niet durven noemen, omdat ik mijn vragen van een omslachtige
uitvoerigheid en duidelijkheid moest maken, terwijl de antwoorden
daarop slechts volgen met een aarzelend hoofd-schudden van den
grauw-grijzen kop, of met een suffig "jawel..."

"Maar die Japanneezen hadden toch niet van tevoren

gewaarschuwd, toen de "Medusa" daar door de Straat van
Shimonoseki kwam aanvaren, niet?"

Hij wachtte lang, schudde toen gewichtig z'n ouwen kop, scheen
iets te willen zeggen, maar zei niets.
 "Ze schoten goed, wat?" vroeg ik. "Vlogen de flarden d'r af?"

Hij keek me uit de moeie oogen aan, zocht lang in zijn herinnering,
mummelde toen:

"Jawel ... jawel... Nou, en of!"

"Hadden jullie nog gewonden aan boord? ...[a203] of gesneuvelde

kameraden?... want zij mikten goed die rakkers, hè?"

Hij wachtte weer lang, en toen: "Wel vier dooie..."

"En gekwetsten ook?"

Hij mompelde z'n stopwoordje weer:

"Jawel ... ook gekwetste..."

En toen, alsof hij zich verontschuldigen wilde over zijn gebrek aan
memorie, half stotterend: "U mot bedenke ... dat 's al weer zoo lang
gelee' ... vijftig jaar, ziet-u..."

Daarop keek hij me verwezen aan na dezen uitvoerigen zin,

bewoog de lippen nog wat na, of hij naar woorden zocht; maar
schudde dan eindelijk, dat-ie het zich toch niet meer wist te
herinneren.

Neen! den zeeslag bij Shimonoseki uit 1863 heb ik niet voor me
zien opleven!

En m'n ouwe zeeman kan het waarachtig niet helpen, dat dit al zoo
lang geleden heeft plaats gehad.

Jan van Beeren was toentertijd matroos tweede klas; hij was al in
de dertig, toen hij het bombar[a204]dement meemaakte; met de
landingsdivisie aan wal sprong, de gele Japannertjes als een zwerm
musschen voor zich uitdreef, de kanonnen vernagelde, den
opmarsch land-inwaarts meemaakte.

Wat weet hij er nog van in zijn oude suffige brein?... Wat weet hij
daar nog van na te vertellen?... Welke herinneringen van
gesneuvelde en gewonde kameraden van toen komen hem nog voor
de moeie, omfloerste oogen, wanneer men hem dat alles wil laten
navertellen?

... "Jawel ... jawel... Hoe lang is dat nou al weer gelee', vijftig jare,
ziet-u..."

Zoodat ik, uit medelijden voor dat afgeleefde ouwentje, maar weer
met hem opstapte, nadat de koffie was leeggedronken.

Daar strompelde hij weer met me mee. Naar huis ging hij niet. Wat
zou hij op dit uur thuis doen, bij z'n ouwe vrouw, bij z'n zestigjarige
ziekelijke dochter? D'r kwamen nog wel karren, die hij z'n haak kon
aanslaan. D'r waren misschien nog 'n paar centjes te verdienen dien
dag. Dat extra-handgeldje van me was altijd meegenomen. 't Was 'n
karig broodje, dat-ie elken dag bij z'n[a205] brug bij-mekaar
scharrelde, zoodat hij blij was met z'n buitenkansje.

Dus nam ik afscheid van Jan van Beeren. Hij tastte verlegen naar
z'n petrand, toen ik hem een hand toestak:

"Nou, Jan van Beeren, en wel bedankt voor het praatje, en dat was
me toen dan toch maar 'n heele geschiedenis met die "Medusa", en
ik hoop, dat 't je goed zal blijven gaan, hoor. En dat 't wat druk mag
blijven met de karren hier aan de sluis... En dan zien we mekaar nog
wel 's terug onder zoo'n warm bakje koffie, niet?"

Maar hij keek alweer naar links en naar rechts, of d'r geen karren
aankwamen, die misschien van z'n hulp gediend zouden zijn.
[a206]

De mensch is als een schip, de wereld als een zee,

De Bijbel mijn kompas, de hemel is de reê;
Wel neem ik dan een loods voor 't stranden;
Dat is de goede geest:
Heeft die alleen het roer in handen,
Dan ben ik niet bevreesd.

—o—

De Haringbuis
Vaart uit en t'huis
Om pekelharing te vangen in touwen,
Waarnaar janken jongen en ouwen.
Men vangt ze in 't razende holle water,
En ze worden gesmuld door Begijn en Pater.

—o—
[a209]
 Is God met ons, wie kan ons deeren,
Zoo wij zeilen of laveeren?
Dit is in het Marktschip van Leiden op Zeelant
Wel voorzien van zeil, treil en want.

—o—

Die in de lij
Mij vaart voorbij,
Zal hebben een Rijksdaalder, en 't gelag vrij.

—o—

Mijn kind,
Daar is een rak in de wind.
Wilt het zeil wat nat maken,
Wij zullen dit hoekjen wel te boven raken.

—o—

O Heer! bewaert ons alle,

Sinte Pieters Schepe mag helle
Maer ten sal niet omme-valle.

—o—
[a210]

Laat haters haten

Wat Godt mij gunt.
Wie laadt en lost
Die is zijn kost.