The newly elected Lord Mayor of the City of London Michael Mainelli is keen to position the City as a global problem solving hub and not just a financial services centre
“The City [of London] is the world’s oldest continuous democratic workers’ and residents’ cooperative,” says Michael Mainelli, who has been Lord Mayor of the City since 10 November.
Outsiders are often both baffled by the arcane rituals, pomp and ceremony associated with the Lord Mayor’s office and confused by the different role played by the mayor of London, Saddiq Khan.
The City of London is an area of just over a square mile including St Pauls Cathedral, the Bank of England and many other notable institutions. It is seen as the centre of the UK’s financial expertise and likes to position itself as the foremost international finance and business centre in the world. The Lord Mayor of the City of London is the head of the City of London Corporation, which means the position is similar to the leader of a town council. The role of Lord Mayor goes back 800 years or more, and today its main function is to represent, support and promote the businesses and residents in the City. But given the importance of the financial sector, the Lord Mayor is regarded as the champion of the entire UK-based financial sector.
As Mainelli prepares himself for a busy year with planned visits to 25 countries, he is at pains to emphasise that the City itself is not just a financial sector. With around 45,000 insurers and about 55,000 bankers making 100,000 out of a total working population of 600,000. It means only a sixth of the area’s population works directly in finance, although there are also a large number in areas such as fund management and in the knowledge economy, including law, accountancy and consultancy.
Science and technology
He is keen to emphasise that there are also just over 200,000 people in science and technology. Around 8,000 of the 24,000 businesses in the City are based on science, engineering and technology. There are also 40 learning institutions, 70 institutions of higher education, and 130 research institutes and scientific associations such as the Royal Institute of Pharmacology, the Royal Institute of Psychiatry and the Royal Institute of Pathology. The first international financial institution based itself in the City only 40 years ago when Citigroup set up its foreign exchange processing centre.
Each new Lord Mayor has a theme for their tenure of office. The previous incumbent, Nicholas Lyons, created a £50bn Future Growth Fund for defined contribution pensions to invest in innovation in the UK. Mainelli will continue to support the Future Growh Fund, but has also created his own initiative entitled Connect to Prosper. He says it is based on the idea that “London is the place to go to combine finance and technology to solve global problems”.
Michael Mainelli, Lord Mayor of the City of London
• 695th Lord Mayor of the City of London
• One-year term to November 2024
• Chair, Z/Yen group
• Launch of Connect to Prosper initiative
• Global ambassador for UK financial and professional services
He points out that the world’s most productive concentration of connected knowledge networks solves problems, most notably those associated with achieving the United Nations’ Sustainable Development Goals (SDGs). “The City of London’s Square Mile is the world’s coffee house where people bring their dreams to get them realised,” says the enthusiastic Mainelli. The new initiative is intended to “bring together thought leaders from the scientific academic and business world [to discuss] the SDGs and other topics”, and of course, given the nature of the Lord Mayor’s office, set-piece dinners.
Carbon trading and space debris
Climate change is clearly one priority that needs to be tackled. Mainelli sees the creation of carbon trading that fits within the City’s financial markets as a great step toward solving the problem. “From 2017-18 the EU ETS [European Union’s Emissions Trading Scheme] price rose significantly enough to see a further kink downward in Europe’s decreasing carbon emissions. Not surprisingly companies and engineers react strongly to increasing emission prices.”
A new initiative focuses on the growing problem of space debris. Mainelli points out that there are roughly a million pieces of debris in the earth’s orbit, increasing the probability of a Kessler syndrome – a catastrophic cascade of collisions. A total of 40% of the UN SDGs depend on space-based technologies in one form or another, says Mainelli, and “the defence sector is terrified of losing their eyes”. Mainelli has suggested the creation of space debris removal bonds.
Oil companies are legally obliged to make provisions to remove all offshore drilling rig infrastructure down to the seabed level at the end of life. Similarly, Mainelli says that space operators could be required to provide a surety bond from an insurer to the government that provides for the removal of satellites at the end of life. By doing so, it would stimulate the creation of new technologies that would remove space debris at ever decreasing costs. The London market is well positioned to provide such guarantees. Mainelli intends to launch the concept at the World Economic Forum in Davos in 2024.
Mainelli also champions a move to make the City a global centre for smart economy networks. The idea is that future economic growth is likely to come from smart data and networks. He says: “Countries that embrace this next wave of efficiency and effectiveness will prosper by increasing productivity and trust, while reducing cost.” Mainelli says the UK is uniquely placed to do so by being at the leading edge of the development of data ‘rails’ and standards. In the next 20 years this will be driven by the likes of artificial intelligence (AI), open data and shared ledgers.
Digitising assets and contracts combining different types of high-quality data can create value. Open banking, which is already in place in the UK, is an example of the principle that individuals own and should be able to control their own data, giving third parties access to it, and benefiting economically from it. But underpinning the growth of the smart economy lies standards and infrastructure. “Flows of data become the lifeblood of our economy; and standards are the heart that powers this.”
Mainelli points out that these standards need to be international for global trade to flourish. “The UK has an opportunity to export our know-how in this area and lead the way in developing international standards with our international partners,” says Mainelli, who is aiming for the City to kickstart the development of international standards, beginning with by demonstrations of the live use of document and interchange standards.
Joseph Mariathasan is a contributing editor to IPE, a partner of Peak Sustainability Ventures and a director of GIST Impact