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Questions and Answers

According to the provided text, what is the primary obstacle to deploying the 100 most effective ways to reclaim carbon?

  • The technologies are still in the developmental phase and haven't been proven yet.
  • There appears to be a problem of financing the large expensive projects.
  • The current business models are not sufficient to implement them on a large scale. (correct)
  • There is a lack of venture capital to invest in these high technologies.

    • What does the author suggest with the phrase 'larger emergent qualities' in the context of avoiding competition with tech giants?

  • Individual entities should be able to compete effectively with larger corporations.
  • Focus needs to be more on emergent tech than existing tech giants.
  • Ecosystems will collectively create an impact. (correct)
  • Tech giants will naturally become obsolete as smaller entities emerge.

    • Which of the following technologies is highlighted as the most effective way to reclaim carbon from the atmosphere according to the text and 'Drawdown'?

  • Solar energy farms and advanced photovoltaic systems.
  • Carbon capture and storage facilities.
  • Onshore wind turbine installations. (correct)
  • Nuclear fission and fusion reactors.

    • What is presented as the 'chicken-and-egg' problem related to onshore wind turbine implementation?

    <p>The challenge of securing financing for capital intensive projects and deployment. (C)</p> Signup and view all the answers

    The author, a computer scientist, expresses a perspective shift in the text. What is this shift about?

    <p>From emphasizing technological solutions to highlighting business model issues. (C)</p> Signup and view all the answers

    What is a key concern regarding 'Unicorn' companies?

    <p>They often represent taxpayer-subsidized monopolies. (D)</p> Signup and view all the answers

    What is the primary argument presented regarding the relationship between social safety nets and entrepreneurial risk?

    <p>Social safety nets create a more conducive environment for taking entrepreneurial risks. (A)</p> Signup and view all the answers

    How does extractive business activity impact global development?

    <p>It is counterproductive because companies often extract cash out of the country. (A)</p> Signup and view all the answers

    What does the text suggest about the role of venture capitalists (VCs) in global development?

    <p>VCs primarily reinforce Western bias. (A)</p> Signup and view all the answers

    What is a common outcome of the current system with respect to costs and benefits?

    <p>Costs are socialized, while benefits are privatized. (D)</p> Signup and view all the answers

    What does the text suggest about the function of a Universal Basic Income (UBI)?

    <p>It's a program that provides everyone with an unconditional basic living wage. (B)</p> Signup and view all the answers

    What does the text suggest individuals tend to do when there is a lack of social safety nets?

    <p>They overcompensate by hoarding personal wealth. (D)</p> Signup and view all the answers

    What is the primary mechanism by which stock buybacks increase the value of a single share?

    <p>By decreasing the number of outstanding shares, thus increasing the price per share. (D)</p> Signup and view all the answers

    What is a common consequence of stock buybacks, considered as a negative outcome?

    <p>Selling assets to generate more cash for buybacks. (B)</p> Signup and view all the answers

    Why are CEOs often agreeable to stock buyback programs, according to the text?

    <p>Due to their equity compensation, which benefits from the increased share price. (C)</p> Signup and view all the answers

    In the context of the text, what role do "activist" hedge fund managers play in stock buybacks?

    <p>They take small but influential stakes in companies to encourage stock buybacks. (D)</p> Signup and view all the answers

    What was Steve Jobs’ stance on stock buybacks, according to the text?

    <p>He was opposed to the idea of stock buybacks. (C)</p> Signup and view all the answers

    Which of the following best describes the financial strategy of Carl Icahn with respect to Apple stock, as inferred from the information provided?

    <p>A short-term strategy focused on advocating for buybacks and then selling at a profit. (B)</p> Signup and view all the answers

    What was the outcome of the lawsuit filed against Meta concerning the timing of their stock buybacks?

    <p>The text only states a lawsuit was filed, the outcome is not mentioned. (A)</p> Signup and view all the answers

    What is the general view of the author of the text concerning stock buybacks within a company?

    <p>They are a form of value destruction rather than value creation. (A)</p> Signup and view all the answers

    According to the content, what action might 'activist' hedge fund managers take if CEOs or Board Members get in the way of stock buybacks?

    <p>They might try to replace CEOs and Board Members. (C)</p> Signup and view all the answers

    What is the central claim made by critics in response to the actions of 'red states' that are divesting from ESG?

    <p>That these states are engaging in political activism, potentially violating their fiduciary duty. (B)</p> Signup and view all the answers

    Which of the following best describes how Strive Asset Management could potentially influence companies?

    <p>By using acquired shares to push for board changes and a conservative political agenda. (C)</p> Signup and view all the answers

    What is a potential consequence of a successful board takeover by an activist investor, such as Nelson Peltz, at a company like Disney?

    <p>The company’s resources could be used to serve a conservative political agenda, including donations to relevant politicians. (B)</p> Signup and view all the answers

    How does the text describe the global nature of the 'finance war' in context of US pension funds?

    <p>US pension funds can invest in and potentially influence companies in other countries, including Europe. (A)</p> Signup and view all the answers

    What is the core structure of a leveraged buyout (LBO)?

    <p>A company is purchased using debt, using the company's assets as collateral and generating revenue to pay off the debt. (C)</p> Signup and view all the answers

    According to the text provided, what is one hypothetical action someone could take with a leveraged buyout (LBO) of a pharmaceutical company?

    <p>Release the patents of vital medications into the public domain. (A)</p> Signup and view all the answers

    According to the information, what was the estimated cost to taxpayers of the Texas bill forcing divestment from ESG in the six months after it was enacted?

    <p>Between $300 and $530 million (A)</p> Signup and view all the answers

    What action did Vanguard take in December 2022 concerning its involvement in net zero?

    <p>Vanguard pulled out of its net-zero alliance commitments. (B)</p> Signup and view all the answers

    Using Musk's takeover of twitter as an example, what is a potential action a new owner of a company may enact during an LBO according to the text?

    <p>Change internal company policies, including content moderation and user permissions. (A)</p> Signup and view all the answers

    Flashcards

    Emergent qualities

    Complex characteristics that arise from simple interactions in a system, like the Internet.

    Drawdown solutions

    100 effective methods to reclaim carbon from the atmosphere, as described by Paul Hawken.

    Onshore Wind Turbines

    The most effective way to reclaim carbon according to Drawdown, relying on natural wind energy.

    Business model problems

    Social and environmental issues that stem from ineffective business structures rather than technology failures.

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    Technology deployment issue

    The challenge of applying existing technologies at a large scale to solve problems like climate change.

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    Entrepreneurial State

    A concept where the government acts as a venture capitalist to stimulate economic growth.

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    Privatizing benefits

    When private entities gain profits from resources or services funded by the public.

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    Unicorns

    Startups valued over $1 billion, often supported by taxpayer money.

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    Extractive businesses

    Companies that remove resources from a country, often causing local economic harm.

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    Universal Basic Income (UBI)

    A program where everyone receives a basic living wage unconditionally.

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    Social safety nets

    Programs that offer support to individuals in financial need, fostering economic risk-taking.

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    Western bias in VC

    The tendency of venture capital to favor Western businesses and ideas, perpetuating inequality.

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    Fiduciary Duty

    A legal obligation to act in the best interest of another party, typically in finance or law.

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    ESG Investing

    Investing based on Environmental, Social, and Governance criteria to promote sustainable practices.

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    LBO (Leveraged Buyout)

    Acquisition of a company using borrowed funds, secured by the company's assets.

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    Divestment from ESG

    The action of selling off investments in favor of non-ESG assets, often due to political pressure.

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    Counter-Criticism

    Response to opposing views, often highlighting perceived hypocrisy or misplaced priorities.

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    Right-Wing Asset Managers

    Investment firms that align with conservative political values and strategies.

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    Activist Investor

    An investor who uses their equity stake in a company to promote changes to enhance shareholder value.

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    Capital Rerouting

    Redirecting funds into different investment vehicles or management styles, often for ideological reasons.

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    Corporate Assets as Collateral

    Using a company's resources as security for a loan or debt obligation.

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    Stock Buybacks

    When a company repurchases its own shares to reduce circulation and increase share value.

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    Activist Hedge Funds

    Investors that buy small stakes to influence a company's management and strategy.

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    Impact on Share Price

    As shares are bought back, fewer shares remain, often resulting in an increased price per share.

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    Equity Compensation

    Form of remuneration where executives are given stock options, incentivizing them to raise share prices.

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    Value Destruction

    Situations where corporate actions reduce long-term company value, often through layoffs or cutting R&D.

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    Apple Case Study

    Apple has executed $500bn in buybacks since 2012, leading the market in this activity.

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    Warren Buffett's Advice

    Buffett encouraged Apple's management to buy back stock using their cash reserves to increase shareholder value.

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    Carl Icahn's Influence

    An activist investor who advocated for Apple to use excess cash for buybacks, resulting in profits.

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    Meta Case Study

    In 2020, a lawsuit questioned the timing of Meta's buybacks during 2017 and 2018.

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    Study Notes

    Post-Growth Entrepreneurship

    • This presentation discusses the concept of Post-Growth Entrepreneurship.
    • Presents a variety of case studies, examples, and themes related to this concept.
    • The focus is on challenging conventional economic models and systems.
    • Includes commentary on re-directing cash-streams, social procurement, ethical supply chains, and emergent ecosystems.
    • Examines the role of governments, modern monetary theory (MMT), central banks, and the conflicts of interests surrounding ESG investing.
    • Also presents case studies on Apple, Fairphone, Tony's Chocolonely, Meta, and Engine No. 1, illustrating various aspects of the discussion.
    • Highlights the importance of understanding money flows, stock buybacks, and the role of institutional investors in driving the agenda.
    • Presents various strategies for shareholder engagement and pension fund activism.

    Meso-Level (Business)

    • This section focuses on the business aspect of Post-Growth Entrepreneurship.
    • Redirecting existing cash-streams is key to the success of the Post-Growth Economy
    • The relationship should be collaborative, not adversarial, between commercial economies and Post-Growth Economies

    Macro-Level (Economy)

    • This section explores economic factors, such as the role of government and the impact of various economic policies on the Post-Growth economy.
    • Governments are portrayed the world's largest venture capitalists
    • Socializing costs, but privatizing benefits, is a criticized aspect of government activity
    • Extractive companies avoid taxes and form monopolies.

    Ethical Supply Chains

    • Presenting case studies such as Fairphone and Tony's Chocolonely, this segment focuses on ethical business practices within supply chains.
    • Designing ethical supply chains from the top down is presented as extremely challenging.

    Breaking Down The Problem

    • This presents a strategy to solve problems that uses reductionist engineering thinking
    • This involves starting with fundamental parts and building up from there.
    • Using this approach is shown to be a way to make everyday items more fair and sustainable.

    Emergent Ecosystems

    • This section examines how small components can create larger, decentralized networks, similar to the internet.
    • The idea is that by combining small entities, larger, impactful change can occur together.
    • This approach avoids competition with larger companies and builds something substantial through collective action.

    Re-visiting the SDGs

    • Presenting "Drawdown" by Paul Hawken, this section aims to critically analyze the solutions to global problems, including climate change.
    • The technology to solve the problems already exists, but the problem lies with scaling and deploying them effectively.
    • The challenge is to find effective ways to deploy these solutions on a vast scale.

    Revisiting the SDGs (Onshore Wind Turbines)

    • This illustrates a specific case study of a solution related to climate change, namely, onshore wind turbines.
    • A 'chicken-and-egg' problem highlights the challenge of financing these projects to the point of practicality and scale.
    • It proposes that this challenge can be overcome by dividing the solution into smaller parts to explore practical solutions.

    Technology Problems vs Business Model Problems

    • This section focuses on distinguishing between technological and business-model issues affecting social and environmental problems.
    • The main point presented is that many current global challenges may be better addressed through innovative business models rather than new technologies.

    Governments

    • Discussing Mariana Mazzucato's work on the Entrepreneurial State highlights the idea that governments play a crucial role in fostering innovation and economic development.
    • Critical of the fact governments socialize the costs of their actions but often privatize the profits.
    • Criticisms levied at extractive companies, such as avoiding taxes and forming monopolies, highlights the need for more careful regulatory oversight and social accountability within the business sector.

    Global Development

    • This section examines the problematic nature of extractive business practices that have negative impacts on global development.
    • The idea presented is that large companies that started with foreign capital can extract wealth from a country, leaving it with fewer resources.

    Universal Basic Income (UBI)

    • This section discusses UBI, a social program where the government provides a basic living payment to every citizen unconditionally.
    • The section notes that UBI supporters come from various political backgrounds.

    Modern Monetary Theory (MMT)

    • MMT describes the unique abilities of sovereign nations with their own currencies when making economic decisions.
    • Governments are not comparable to households. They have the power to create money and thus control inflation.
    • MMT acknowledges that the political process determines how resources will be allocated.

    Central Banks

    • Quantitative Easing (QE) has been used by many central banks, and has been linked both to high stock market highs and various economic bubbles (including the 'unicorn' and housing bubbles).
    • Historic levels of inflation follow, particularly impacting poorer socioeconomic groups the most.
    • The presented conclusions highlight the conscious political decisions that have led to this economic climate.

    Dutch Central Bank (DNB)

    • The Dutch Central Bank has faced criticism for managing inflation, raising concerns about its independence and fiscal position.
    • The bank acknowledged potential need for its own government to step in and shore up its stability, but no solution is currently in place.

    Part VI: Finance and Investment

    • This section identifies investing as a political act.
    • Government funding and legislation is strongly influenced by political donations, shaping societies around the world.

    Understanding Money Flows

    • This segment describes institutions involved in money flows, including asset owners, asset managers, and companies.
    • Shows the flow of money from asset owners to asset managers and onward, with the eventual return to asset owners.

    Extraction in Finance

    • This section analyses financial practices that extract value.
    • Cash extraction from the finance industry occurs through various means, such as fees, dividends, and stock buybacks; all of which are discussed.
    • It also discusses the techniques of mergers and acquisitions, which may lead to economic extraction.

    Stock Buybacks

    • Stock buybacks are a method that companies used to increase the stock price by reducing the quantity of stock shares.
    • Activists use this to either change company management or to extract funds.

    Case Study: Apple

    • Apple's history of stock buybacks is presented as a significant economic case study.
    • Apple's use of excess cash for stock buybacks is detailed.

    Case Study: Meta

    • This discusses a lawsuit filed against Meta relating to significant stock buybacks, and questions the legality of such actions.

    Engine No. 1

    • A hedge fund that used its investment in ExxonMobil to push the company to move away from fossil fuels to renewable energies.

    "Woke" Finance War

    • This section focuses on criticism of ESG (Environmental, Social, Governance) investing and the backlash it has received.
    • The movement is portrayed as a way for corporations to prioritize activism over fiduciary duty.
    • The use of ESG investing is highlighted as an action that is often used to punish companies for investing in "problematic" areas of industry.

    "Anti-Woke" Activism

    • This section analyses actions against companies perceived as "woke" with the goal of shifting their investments toward more politically-aligned companies.

    Leveraged Buyouts (LBOs)

    • This section discusses leveraged buyouts, a corporate finance strategy to acquire a company using borrowed money, with collateral being the company's existing assets.
    • This is illustrated by Elon Musk's acquisition of Twitter.

    ESG Investing

    • Detailed analysis of ESG investing and the different aspects of the strategy involved.
    • Criticism is made towards the strategy of ESG investing for having some success in the past with divestments from "sin stocks", but also for problems with conflicts of interest in the broader industry.

    The Problem with ESG

    • This section points out some of the core problems of ESG investing, including the conflicts of interest that arise and the difficulty in having a system that is objective and non-manipulative.
    • Concerns are raised about problems with governance, compensation structures (as incentives are set), and proxy voting issues, which often result in outcomes that are less beneficial to shareholders.

    "Pass-Through" Voting

    • This discusses an issue with index funds that can be problematic for corporate governance that arises because of "pass-through" voting, which is characterized by the fact that a vote from an outside investor frequently can have a large impact on the company.

    Legislators and Regulators

    • This section examines the regulatory environment for corporate governance, highlighting the need for appropriate regulatory oversight to address conflicts of interest and ensure ethical corporate practices.

    Conclusion

    • This section highlights the idea that challenges can be overcome with collaborative action, and that the post-pandemic period presents an opportunity to build a better future using business and finance as tools.

    Group Assignment

    • A group assignment is described in which students are tasked to analyze and advise publicly listed companies on their environmental and social responsibility.

    Questions?

    • This slide asks for questions from the audience.

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    Test your knowledge on the obstacles and technologies related to carbon reclamation as discussed in the text. Explore concepts such as competition with tech giants, social safety nets, and the impact of venture capitalists in global development. This quiz will challenge your understanding of effective environmental practices and economic implications.

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