The concept of Environmental Tracking (ET), which has provided a platform for much of the EIO's subsequent work, was first outlined in Michael Gill’s forward-thinking book Environmental Tracking, Can Investment Revolution Prevent Ecological Catastrophe. First published in 1997, it envisioned a radical adaptation of the “index fund” concept, aiming to change the direction of the world’s financial system and tackle the rising spectre of climate change.
Unfortunately the idea was far ahead of its time, relying on environmental data that was either undisclosed or simply non-existent.
However, the past two decades have seen a transformation in the landscape of corporate environmental governance: reporting is no longer the exception but the rule as civil society demands greater social and environmental accountability from the world’s biggest companies.
To capitalise on the growing political and public appetite for environmentalism - and the availability of data - a revised version entitled A Solution To Global Warming... was published at the end of 2009 outlining the logic behind the Environmental Tracking Index Series, which translates this premise into a investable index product. This was followed more recently by the publication of Environmental Tracking 3.0, which is available as a free PDF here and in hardcopy from lulu.com.
Shortly after, the first publicly available ET Carbon Rankings were launched.
Both books assert that for the average long-term investor, an investment system that causes serious environmental harm is a bad investment. The question since the establishment of the EIO has been how to provide investors with a tool to harness their influence over the investment system.
This is precisely the question that the ET Carbon Rankings and subsequent Environmental Tracking Index Series seek to address.
The EIO was originally established in 1996 to work in parallel to the then newly formed London School of Economics Environmental Initiatives Network (EIN).
The EIN had been set up the previous year by concerned LSE Alumni to mark the LSE’s centenary year and support new environmental thinking at the school, particularly of an economic and financial nature. The LSE network organised a wide ranging programme of lectures and events at the LSE, which over the following 13 years encompassed just about the entire spectrum of environmental thought and organisations.
With the establishment of the new Grantham Research Institute on Climate Change and the Environment based at the LSE, the initial priority of raising the profile of environmental issues and research at the LSE has been achieved.
The EIO has sought to build on this activity and is now completely focused on advancing practical and marketable solutions for the existing financial and investment system.