Economic and Financial Affairs Council (ECOFIN)

Topic Guide

Chairs: Max Deninzon & Elad Shav
Email: [email protected] & [email protected]

Topic A: Combatting the Risk of Privatizing Public Finance and National Economic Health
As the economy attempts to readjust its sights for growth in recent months amidst increasing debt, one key theme has shown to prevail, as corporations establish ties with government processes through what is known as privatization. In essence, privatization is the process by which ownership in a company, process, or asset moves out of government jurisdiction into the private sector. By such virtue, when companies choose to get involved in the development of infrastructure or national security, it results in corporate hunger for abundant government fiscal resources for benefit at the sacrifice of the nation’s people. Among the various areas of government, it is government finance that has otherwise faced the largest impact, with companies such as BlackRock, PWC, Deloitte, and J.P. Morgan Chase each taking a major position around the world. Among these particular examples, BlackRock’s role in advising Ukraine’s investment fund dedicated to national reconstruction in 2023 pushed policy that it then profited from through warped insider information. As a result, wealth was continually bubbled into the company, giving it far more leverage over the trillions of dollars in public equity, private equity, and real estate that it holds. In such a sense, privatized corporations often have different priorities than governmental and public institutions, potentially making decisions without regard for the general welfare of the global economic health. Not only that, but with the use of Private-Public Partnerships (PPPs) in other sectors and the reliance on private institutions to monitor the flow of lending across borders, addressing debt and increased risk in government liquidity becomes a primary area for concern. How can countries utilize the talent and strengths of these private institutions without risking privatization driven by profit at the expense of public welfare? Delegates, how are you going to help work to find a middle ground so that economic development is anchored and not subject to the risks of privatizing government fiscal resources?

Topic B: Advancing ESG Standards for Sustainable Technology and Industry
In the recent push for advancing ethical practices in global economies, Environmental, Social, Governance policies (ESG) have become a core strategy by which modern companies operating under global constraints evaluate their performance beyond the simple bounds of profit or revenue.
#1.) Environmental standards place emphasis on how companies operate within the bounds of ecological sustainability and practices that account for growing trends in pushing the use of green energy, as well as limiting environmental harm, where companies vetted in production may be accelerating the harmful process.
#2.) Social standards include policies that outline a company's social responsibilities, including banning discriminatory practices and prioritizing safety for workers, tying into a push for aligning with environmental policies.
#3.) Governance policies outlined by ESG legislation further place greater enforcement upon company leaders to enhance transparency, accountability, prevent corruption, and give all stakeholders the chance to hold a voice in decision-making.
-In other words, ESG is broken down into ideal areas where companies have been forced to increase transparency - a model for a majority of regulation built around corporate social responsibility (CSR), which once began solely as a social calling. Looking into the modern day, development of technology dedicated to following ESG strategies and the increasing priority among nations to collaborate on regulating corporations, to encourage the proper adherence to ESG policy, has created a multi - trillion - dollar market. However, conventional practices to enforce ESG have ever since transcended into the age of A.I., where Large Language Models (LLMs) and high volumes of data are pushing quality over quantity. From data about company employees, to actively communicating financial data to shareholders, and constantly monitoring information in regards to the production of goods and services, ESG has reached a point where corporations are under a constant spotlight. On the highly-regulated modern securities exchanges, a number of private asset managers and institutional funds have looked towards ESG as an entirely new class of assets with incredible opportunity. However, while moral intentions in the face of economic development have become a driving force in the future of regulation, ESG has received sudden backlash due to the exposed risk of matters such as greenwashing and a lack of structure on a global front. Such tension has been further exacerbated under the Trump administration, which has U.S. involvement in global ESG policy, leaving every nation on its toes. As a committee focused on better establishing responsibility to the environment as well as the global economy, what will you do to ensure that ESG policies likewise remain strict in the modern age, where technology is both a friend and foe of ensuring corporate social responsibility through environmentalism? What strategies do you intend to implement to further enhance the opportunity to push investment among large private asset managers in ESG-oriented firms? What will you do to settle private and public concerns surrounding the standardization of ESG?

Committees

Economic and Financial Affairs Council (ECOFIN)