Abolition as an Historical Example for ESG Investing

When I think about the effectiveness of Environmental, Social and Governance (ESG) Investing, I often look back in history to find examples of social movements that used economic power to affect social policy. There are examples of campaigns to improve society and the economy that convince established interests of the need to change with the times.

Abolition, the movement to abolish the slave trade, is one of the first to come to mind for me. And Canada played a prominent role in making change possible before anyone else.

Abolition: A brief history that starts with a personal, Canadian touch

I have a personal, present-day connection to the abolition movement of the 18th & 19th centuries. Not long ago, I signed a petition calling for a street near my home in Toronto to be renamed.

Dundas Street is named after Henry Dundas, 1st Viscount Melville. As a minister under Prime Minister Pitt, he is accused of playing a major role in delaying the abolition of slavery in the British Empire in the late 18th century.

We can find the name of Dundas all over Ontario. There are major streets, public squares, towns, and even counties named after him.

This was because of his friendship with John Graves Simcoe, lieutenant governor of Upper Canada, 1791-1796. Yes, they were friends even though they took very different stands on abolition.

Simcoe was an abolitionist before he arrived in Upper Canada. And he was able to oversee the passage of the Act Against Slavery at the first meeting of the Executive Council of Upper Canada in 1793. This was the first piece of anti-slavery legislation passed anywhere in the British Empire. Efforts in other colonies, even in British North America (New Brunswick, Quebec in particular), were not so successful.

Note: Since I first wrote this post, the City of Toronto has announced that they will rename streets and squares named after Dundas. The process of choosing new names has only just begun.

Abolitionist Efforts in Mother England Went on for Decades

While the Executive Council of Upper Canada acted in 1793, it took until 1807 for the British Parliament to pass the Slave Trade Act, officially known as An Act for the Abolition of the Slave Trade. This act abolished the slave trade – the transportation of slaves mostly to regions in the new world, namely the United States and the Caribbean. But it would take until 1833 for them to actually abolish slavery itself.

The campaign in Great Britain to abolish the slave trade began with the establishment of the Society for the Abolition of the Slave Trade in 1787. It included organizing petition campaigns and boycotts of produce created by slave labour – especially West Indian Sugar, produced on slave plantations.

One element of the Sugar Boycott was the effort to point out that sugar was available from plantations elsewhere in places like Malaysia that were not produced using slave labour. Similar to the emphasis in climate change education to point to renewable options to fossil fuels.

These abolitionist campaigns were important for:

  • educating the public about the existence and reality of slavery
  • demonstrating support for abolition in the community, and
  • focusing the attention of public officials on efforts to achieve abolition

These campaigns went on for years as abolitionists fought to eliminate slavery in all its capacities.

But like so many other publicly popular campaigns (women’s suffrage, worker’s rights, abortion rights, the anti-apartheid movement, to name just a few), the campaign needed decades to finally convince the British Parliament to abolish the slave trade. In fact, slavery itself was not abolished in the British Empire until 1833-34.

Success was Incremental in Canada and Britain

The Act Against Slavery, passed in Upper Canada in 1793, had a number of provisions that took effect over time. This served to calm down the slave owners while introducing the necessary changes. It is unsightly for us now, but it got things done. The act decreed that no new slaves could enter the colony and that no children born to a slave would become slaves.

This meant that slavery would disappear over time. It also meant that slaves who escaped along the Underground Highway had a place to go. Without that, it’s hard to understand how any escape efforts could have succeeded.

The British Parliament started by abolishing the transportation of slaves from Africa to the Caribbean colonies in 1807. It took another 25 years to actually abolish the use of slave labour on the sugar and cotton plantations themselves.

Economic Aspects of the British Abolitionist Campaign

A major element of the century-long abolitionist campaigns was economic pressure – what we now call boycotts. The most famous of these was the British Sugar Boycott I mentioned before.

But sugar was not the only product that abolitionists identified with the slave trade. The Committee to Abolish Slavery used these campaigns many times during the forty years it took for the Committee to Abolish Slavery to accomplish its aims fully.

The Campaign to Abolish Slavery concentrated much of its efforts on public education and participation from the onset. Campaigns aimed at education and personal economic action succeeded in bringing attention to the evils of the slave trade and suggesting ways for people to get involved in their daily lives.

Interestingly, while the Sugar Boycott was a very successful part of the anti-slavery campaign, the term “boycott” itself was not actually created until the 1880s – in “honour” of Charles Cunningham Boycott, a British estate manager in Ireland.

US Abolitionists Used Economic Pressure Too

As we know, slavery continued in the United States until Abraham Lincoln signed the Emancipation Proclamation in 1862, at the height of the American Civil War. Abolitionist efforts in the United States before the Civil War also included refusing to buy or use products produced with slave labour. In the United States, this included cotton and tobacco.

Sustained by Lobbyists – Not by Economic or Social Relevance

As the Campaign to Abolish Slavery got started, historical conditions began to make the continuation of the slave uneconomic and unethical. The development of modern industry highlighted the inefficiencies of the plantation system that needed slaves to survive. These economic developments and modernizations gave added impetus to ethical, moral, and spiritual efforts.

Although plantations became less economically viable for society as a whole, those who personally benefitted from their continuation had a significant interest in maintaining them. As a minister in the Pitt government and leading the efforts against Napolean, Dundas played a significant part in delaying abolition and propping up the interests of those in the slave trade.

And now today’s lobbyists for the fossil fuel industry are playing a similar role in maintaining an industry that society has outgrown. Modern advancements make renewable energy a more cost-effective way of producing the energy we need.

Activists and commentators point to this fact – that fossil fuels are becoming less economically viable and environmentally damaging. Renewable energy is becoming more cost-effective and has been for years. The only way to maintain coal and gas as energy sources is through subsidies. Environmentalists have been accusing the industry of this for years. As subsidies become less acceptable and the fossil fuel industry becomes less viable, ESG investors can champion new economically and environmentally more effective opportunities.

Abolitionists Then – ESG Investors Now

I see a historical overlap here with our modern emphasis on ESG. ESG seeks to look at outmoded economic models in a socially relevant light.

This is especially true of efforts to highlight environmental aspects of ESG – the first part of environmental, social and governmental investing.

Transition is Essential

In Upper Canada, Lord Simcoe was able to introduce legislation that effectively abolished slavery, just not right away. His compromise was to ban the further importation of slaves into Upper Canada and ensure that children born to enslaved women would not become slaves themselves.

Efforts in Britain ended up taking the same gradualist route, chipping away at the slave trade and its role in the world.

The American Civil War is an example of abrupt change that brought an effective end to slavery worldwide.

Climate change initiatives also center around the struggle to shift from one economic/environmental model to another. Current efforts worldwide demonstrate that, including President Biden’s infrastructure plans and the carbon tax fight here in Canada.

When we look back on the abolitionist movement of the late 19th century, it’s hard to think that anyone could have ever supported the continuation of the slave trade. When others look back on early 21st-century society, I hope that they will be equally confused by lingering efforts to maintain the fossil fuel industry.

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