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5th July 2019

Banks can save the world from climate change, says former UN climate chief
Opinion

Banks and investors can do more to support the world’s shift to a low-carbon economy and help avert a climate emergency that threatens every living person on Earth, the former UN climate chief Mary Robinson has said.

Ms Robinson, who also served as President of Ireland, said that the financial services industry must help finance the “just transition” to an economic model that reduces net carbon emissions and slows global warning.

She made the comments in a collection of essays published by the Social Market Foundation think-tank and the Chartered Banker Institute about green finance and the role that financial services can play in delivering environmental goals.

In her essay, she argues that better public records about energy companies and their uses of fossil fuels would make it easier for investment firms to steer pensions and other funds away from activities that contribute to climate change.

The proposed “comprehensive, transparent database of all existing fossil fuel assets and reserves” should include data on future carbon emissions from those reserves, she said. “A publicly-accessible registry, whether state- or investor-owned, would enable all stakeholders to organise a new plan for an orderly wind-down of pending or proposed projects –a just transition, in other words. It would give clarity to investors, who hold an extraordinary latent power to further the sustainability agenda, and thus secure a long-term future for their own assets and investment strategies.

“I am under no illusion about the challenges the energy and finance industry faces in managing a just transition. But I am also under no illusion about the risks posed to every living person on Earth if these challenges are not faced head on, with honesty, seriousness and integrity.

“Let us listen to our children and grandchildren, and act to prevent the grave act of intergenerational injustice they fear will deprive them of a future. If we fail today, it will be an unconscionable betrayal for which our successors will pay an intolerably high price.”

The SMF and Chartered Banker Institute are publishing the collection of essays, titled “How Sustainable Finance Can Tackle the Climate Emergency”, in the week of the Green Finance Summit in London. The collection explores the way financial services firms can help provide the money needed to fund the transformation of the economy that scientists say is necessary to reduce carbon emissions to net zero.

Simon Thompson, Chief Executive, Chartered Banker Institute, said: “This collection of essays by leading experts and practitioners in the field of green finance is an important contribution to the debate about how sustainable finance can tackle our climate emergency. The opportunity green finance provides for our finance sector and finance professionals should not be underestimated. By doing what we do best – connecting capital and savings with the investments and projects needed for the transition to a sustainable, low carbon world – we can not only trade profitably but play a key role in solving our greatest global challenge.

“It is very telling that the Paris Agreement singles out the critical role of finance in one of its three main objectives. Underpinning the transition to a sustainable, low-carbon world demonstrates a positive social purpose for financial services, helps reconnect banks and society, and contributes to the process of rebuilding trust in the financial sector overall. To put it crudely: banks and bankers can help save the world – and we should grasp this opportunity.”