This article originally appeared in The Scotsman at

Faced with the biggest pandemic in a century grinding the global economy to a halt, or our ecosystem being on the cusp of the irreversible extinction of species caused by climate change and our insatiable demand for natural resources, or indeed the rupturing of deep structural barriers causing gender and race discrimination highlighted by the Black Lives Matter campaign, people are no longer willing to accept the status quo.

The gap between the rich and the poor has never been bigger and – despite all our advancements – the UN has called for the urgent implementation of the Sustainable Development Goals (SDGs) so that no one is left behind.

We sit at a key juncture and there is an unrivalled opportunity to rewire the system – for those nations, markets and companies which can demonstrate vision, leadership and courage.

And we have no time to lose: this must be the decade of action.

Change the world

Five years have passed since the countries of the world came together to set the SDGs – a blueprint to achieve zero hunger, quality education, decent work and climate action, among other targets by 2030.

Despite the challenges we all face, at the Global Ethical Finance Initiative (GEFI) we believe that when we come together to share insights and commit to action, we genuinely can change the world.

The plans that governments and institutions produce must be more about renewal than just recovery, building a responsible, inclusive, sustainable and green future. We must encourage bravery and allow our leaders to be courageous, because we will only achieve as much as their vision and courage allows us to.

At the heart of this is reframing capitalism – and the blood supply for this is ethical finance.

Last week, from our base in Scotland, we convened – virtually – over 1,500 professionals from 86 countries to shape a better finance system. Some of the world’s largest banks and asset managers attended the Ethical Finance 2020 summit, representing over $20 trillion of assets.

Ethical finance is a fairer system of financial management that combines profit with better outcomes for people and the planet.

There is a reason why we are based in Scotland and why the summit is convened from Scotland. In rethinking capitalism, Scotland, as a global citizen and with its heritage going back to Adam Smith, can play a unique role in this. The financial services and academic talent, progressive thinking and inherent culture provide an enabling ecosystem for solutions that can once again shape the world.

Financing a green recovery

A recent report from the Ethical Finance Hub found that Scotland’s £9.5 billion UK-domiciled responsible investment already represents 11 per cent of the UK responsible investment market, compared to the country’s seven per cent share of the total market.

There is an unrivalled opportunity for Scotland’s £800 billion financial services industry to tap into, service and grow the market.

We need to consider where climate finance can help fund the green recovery and create jobs through facilitating foreign direct investment (FDI).

There is therefore a prerogative for those in charge to demonstrate ambition and moral leadership. The Scottish Government has already demonstrated a willingness to think beyond GDP, with Nicola Sturgeon rightly talking about the fundamental need for health and well-being. Ministers now need to take the next steps to progress this agenda and organise and commit to realising the financial innovation that is required.

Finance firms too must continue to take action. It is encouraging that Aviva this month set a new 2050 net-zero carbon emissions target for its own auto-enrolment default pension funds.

Steve Waygood, chief responsible investment officer with Aviva Investors, told our summit that “we need a vision for a Marshall Plan for the planet”, echoing the words of Prince Charles last month. Steve highlighted the COP26 climate change summit being held in Glasgow next year as arguably the most important conference that the UK has hosted.

Make My Money Matter

Preparatory work over the next six-to-nine months will reveal the world’s ambition to tackle climate change and determine whether the summit in Glasgow is considered a success.

With the fifth anniversary of the Paris climate agreement coming this December, governments including the UK Government should soon be setting out their commitments and ambition to tackle the emergency.

Our ‘Path to COP26’ campaign has now become the largest financial services sector movement in the run-up to COP26 with over 40 firms registered. The initiative is designed to encourage banks, asset management firms and other financial companies to demonstrate their commitment to the climate agenda by sign-posting existing initiatives and standards for them to sign up to.

For Scotland, there are great opportunities for asset owners to invest in the clean energy sector and deliver greener pensions. Investments in wind power and green hydrogen present considerable, unique opportunities to Scotland that can attract energy-intensive businesses and allow Scotland to become a leading net green energy exporter.

All this needs to be financed and our pensions are an important source. As part of our ‘green your pension’ campaign, we know that only 13 per cent of Scots who have a pension actively chose their own investment portfolio.

We have partnered with the Make My Money Matter campaign led by Richard Curtis, encouraging the public to shift their pensions away from harmful assets and in line with their values.

There is an opportunity in the months ahead to make a positive difference.

For the sake of all people and the planet, we must seize it.