Business sector has driven shift to ‘values-based capitalism’, Jim Chalmers says

Jim Chalmers says Australia’s business and investment community has driven a shift to values-based capitalism, hitting back at a volley of criticism in some news outlets after the publication of the treasurer’s 6,000-word essay championing co-investment and economic inclusion.

Chalmers made the observation on Wednesday while leading a round of consultation with the investment community about a new framework for disclosing climate-related risk. The treasurer participated in a round table convened by the Australian arm of the UN Principles for Responsible Investment initiative.

In his new essay published by the Monthly on Monday, the treasurer signalled he wanted to expand the opportunity for “impact investing” while pressing ahead with regulatory reforms, including a “new taxonomy” to help investors “align their choices” with the government’s more ambitious emissions reduction targets.

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The treasurer said a renovation of institutions and regulatory frameworks was essential to allow capital to be deployed for private profit and “public value in the for-purpose economy”.

He advocated a form of “values-based capitalism” predicated on partnership between the public and private sectors rather than antagonism. Chalmers said in the essay the private sector was “key and central to sustainable growth, and there’s a genuine appetite among so many forward-looking businesspeople and investors for something more aligned with their values and our national goals”.

Related: Jim Chalmers says May budget to have ‘much bigger focus’ on tackling entrenched disadvantage

While Chalmers’ views are not hostile to the fundamentals of capitalism and align with mainstream analysis by regulators and sections of the business community, the essay has triggered a barrage of hostile commentary in Australia’s two national newspapers, the Australian and the Australian Financial Review.

Chalmers addressed the controversy during Wednesday’s meeting with investors. He noted: “The investors represented here, and the broader investment and business community, don’t just support values-based capitalism – you’ve driven it.

“This is not some leftwing fringe idea. It’s about better designed and better informed markets and more cooperation between investors and governments to modernise our economy and deepen and broaden our industrial base, powered by cleaner and cheaper energy.

“Your enthusiasm and determination to drive Australia towards an appropriately ambitious sustainable finance agenda is one important example of this but not the only one.”

Chalmers said the reforms the government was pursuing in climate-related risk disclosure and financial market transparency aligned with what investors and lenders had been championing for “years”.

He said the reforms were intended to provide guardrails and policy stability to ensure markets were well informed and capital could be unlocked for productive investments.

Chalmers noted while a “minority” of market participants were intent on clinging to “some sort of outdated ideology”, the government would pursue “a forward-looking, internationally aligned, sustainable finance agenda born out of economic opportunity and contemporary necessity”.

Appearing separately at the National Press Club, Labor frontbencher Tony Burke was asked by a reporter whether he could define values-based capitalism “in your own words”.

Burke said the arguments Chalmers had made in the new essay were consistent with the values “in the mission statements of major companies”, including members of the Business Council of Australia.

Burke said there had been a “rush” in commentary to castigate the treasurer’s analysis, but he advised some of the critics to “look at what a whole lot of major companies put in black and white as the principles that they espouse as mattering”.

“It’s a lot more than bottom line and for government to be backing those concepts is right and proper and I’m really glad that Jim’s written the essay.”