סמינר מחלקתי - A Global Call for Action: How to Save Humankind

 A Global Call for Action: How to Save Humankind

Prof. Yehuda Kahane (kahane@post.tau.ac.il www.ykcenter.org)

Global economic growth in recent decades has been accompanied by the creation of immense environmental and societal risks that literally threaten the survival of humankind on planet Earth. In order to mitigate these risks, there is an urgent need for the world to embrace a paradigm shift that will begin with a redefinition of relevant metrics and the development of new decision making tools for investment decisions. In 2015, 193 states accepted and committed to the UN quantitative and qualitative Sustainability Development Goals (SDGs) for 2030. These ambitious targets require major efforts huge investments trillions of U.S. dollars per annum (8-9% of annual global GDP) for the next 15 years. There are still major remaining challenges: The relevant planning horizon of most leaders is short and they typically don't think in terms of trillions of dollars. Moreover, there is a need to learn to operate on a completely unrecognized scale.

The only sources for long term financing at this scale are (1) the public sector (governmental budgets and especially social security programs), and (2) the retirement and saving plans of the private sector (that currently manages an immense portfolio of approximately $80T). That was the basis for the PRI and PSI initiatives.

High yields are a necessary condition for attracting higher savings and for enabling higher investments. The high yields create an accelerating self-propelling cycle: higher returns attract higher long term savings and thereby larger impact investments which, in turn, enable higher yields. Social security plans can easily be adjusted to offer a high implicit rate of return. Impact investments have potentially high yields from the public’s point of view as they have additional direct and indirect benefits. Directing private insurance portfolios toward the same target is, however, somewhat more complicated. From the private sector’s point of view, most of the societal and environmental costs and benefits are regarded as “externalities”, and are not considered by decision making. In order to synchronize the private sector decision making with the public interest, there is a need to “internalize (endogenize) the externalities”. There are many ways to do it (in the form of taxation, subsidization, public guaranties for minimum yields, pollution trading options, etc.) depending on local circumstances. Many ideas can be adopted by studying the solutions that were used a few decades ago by many countries in order to finance infrastructure projects that were necessary to fuel economic development.

A paradigm shift can happen only with new managerial tools. Most people have a natural tendency to fear and resist changes. That fear is augmented by a weird term like "paradigm shift". It may be complex, but not complicated! It simply requires a new way of looking at things! We have the right international teams of experts, and have developed tools for Trans-For-Nation tools to prepare governments and large organizations to deal with these challenges effectively and with urgency. Motivation to innovate may be generated from within financial organizations. But, more likely, it will be triggered by mounting pressures on retirement funds by the public to invest in positive-impact investments.

Our idea is to show how we can hit two targets—mitigation of the environmental risks and re-establishing retirement security for Millennials and future generations—with one arrow.

Prof. (emeritus) Yehuda Kahane

Prof. Yehuda Kahane is the 2011 inductee of the highest international award in risk management and insurance (The Insurance Founders Award, of the International Insurance Society). At that year he was also awarded for his life time achievements by the Israeli insurance industry.

He is a Professor (Emeritus) of Coller Business and the Porter School of Environmental Studies, and headed until recently the Institute for Business and the Environment at Tel-Aviv University. He was the founding dean of the first academic school of insurance in Israel. During almost 5 decades he taught in many universities including the Hebrew University of Jerusalem, the U. of Florida, U. of Toronto, The Wharton School of the U. of Pennsylvania, the U. of Texas (Austin) and others. All his degrees are from the Hebrew University of Jerusalem: BA (economics and statistics), MA (business), PhD (finance). He is life and general insurance actuary.

Prof. Kahane is an active entrepreneur and investor in technological incubators and in technological companies, in a wide variety of areas. He emphasizes projects with game changing potential. A co-founder of Ituran), Pango Parking, Capital Point, and many other companies.

Kahane is focused on philanthropic activities. He is the chairperson and co-founder of YK Center – a for benefit institute that prepares leaders and managers for the new economy, and is now working with elders of the mentoring industry to lead towards a solution of major global environmental and societal risks, in cooperation with the UN. He is also active in creation of complementary currencies.

He often used his area of expertise - insurance – as a leverage to solve major challenges that affect huge populations – for example, to increase food production in Central and South American countries, to work on the adoption of the UN SDGs (Sustainability Development Goals) in Africa, or to find the enormous financial resources needed to combat the world climate change problems.

Kahane@post.tau.ac.il

kahane@ykcenter.org

http://en-coller.tau.ac.il/profile/kahane

www.ykcenter.org

Mobile: +972-54-4557137

Fox news interview 6-6-15:

http://video.foxnews.com/v/4280711216001/beyond-the-dream-yehuda-kahane/?#sp=show-clips