The change in Labour leadership has been slightly lost in the coverage of coronavirus. However, Sir Keir Starmer’s election could lead to a deep change to the UK’s approach to responsible business and impact investing.
As part of his re-shuffle of Corbyn appointees, he has installed former Labour leader Ed Miliband as shadow business, energy and industrial strategy secretary. Despite his previous depictions as coming from the left, anti-business wing of the party, Mr Miliband has stronger pro-(responsible) business credentials than many may realise.
A cabinet minister in the New Labour government, a number of his policies have become part of the new mainstream focus on responsible capitalism: raises to the minimum wage, vocational training, cuts to business rates and a focus on executive pay, as well as a commitment to environmentalism.
Under Keir, Labour will be looking to regain its credibility with control of the economy while creating jobs and addressing the concerns of young votes. A focus on ESG matters and the ways in which the current economy can be made more impactful will be a natural source of policies.
Investors should keep an eye on policy proposals raised by Mr Miliband, as they may soon become government policy (whether under the Conservative or Labour party).
The greening of the economy will be Mr Miliband’s shtick, says one former senior Labour adviser now in industry. Especially when it can be integrated into a job-creating industrial strategy on the front line of the “red wall” Labour constituencies in the industrial Midlands and the north. “As Tony Blair might say, the kaleidoscope has been shaken again. Ed will be thinking hard on the role of the company in society. We are already on that journey with the ESG agenda and he will be thinking on how we can rearrange the plumbing to get the private sector working for the economy and the community.”