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Climate change specialist joins family office as sustainability pressures build

Capital Generation, the multi-family office backed by the Said family, has appointed Dimitri Zenghelis as chairman of its responsible wealth committee. Zenghelis is seen as a heavy hitter in climate change strategies and his appointment is timely.

Family enterprises need to decide how to deal with a dramatic shift in fiscal and economic policies following pledges to cut net carbon emissions to zero by 2050. Renewed US support for the fight under president-elect Joe Biden has added to the urgency.

As allocators of family capital, we have three ultimate goals in mind: to compound capital, avoid loss and do the right thing

Zenghelis recently served as head of policy at the Grantham Research Institute, financed by asset manager Jeremy Grantham, who has called for a new Marshall Plan to deal with carbon emissions.

Zenghelis was a team leader for the UK Stern review which warned of the climate threat in 2006. He gave briefings at prime ministerial level and spent ten years at the UK Treasury where he was head of economic forecasting.

Zenghelis currently serves as an adviser to academic and political bodies like the World Bank and the Mayor of London. He will lead meetings of CapGen’s responsible wealth committee, while advising its clients and producing research.

CapGen founding partner Charlotte Thorne says: “As allocators of family capital, we have three ultimate goals in mind: to compound capital, avoid loss and do the right thing.” 

A large number of family offices would agree, although some risk falling behind a steepening curve. The financial sector has called for transparency to help it divide ESG winners from losers.

Some want to accelerate the process via corporate audits where profit statements take account of environmental costs, and benefits.

Peter Harrison, chief executive of Schroders, the family-controlled asset manager, backed impact-adjusted profits at a Bloomberg conference on 2 December.

Billionaire Anders Povlsen, owner of Danish fashion chain BestSeller and the biggest landowner in Scotland, is rewilding his estates in Scotland. He told The Sunday Times on 22 November: “In the future, you should prove you are carbon neutral, that you’re not subtracting from the natural world. 

“There has to be a way forward, a new way of measuring a company’s tax in relation to the natural world. I want to be part of that.”

Accounting standard setter, the IFRS Foundation, wants to develop sustainable corporate accounting, taking account of environmental actions.

Harvard Business School professor George Serafeim supports the move. He said sixty global companies were making an attempt to come clean. 

One of them is food group Danone, turned into a global powerhouse by the Riboud family from the 1970s, with an early commitment to business success and social progress. 

Danone discloses “carbon-adjusted” earnings per share. Car company Volvo, backed by the Wallenberg family, has quantified the impact of its emissions.

Large companies like Walmart, backed by the Walton family, are putting pressure on suppliers, many of which are family businesses, to cut their carbon emissions.

As well as broader sustainable issues, family enterprises need to know about the impact of grants, and tax policies, on sustainable investments. 

Tax relief has already played a significant role in the development of clean energy, where they have extensive investments. 

Biden is developing several policies, including plans for 500,000 charging points to generate the sale of 25 million electric cars, whose ventures they also back. 

The Singapore Government has approved the production of lab-based chicken. Alternative food will lead to a fall in animal rearing, and the growth of cereals – and wilding. The UK Government has announced plans to subsidise farmers who use a sustainable approach after Brexit.

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