The Path To COP26 - One Year To Go: event summary

Speakers at the ‘One Year To Go’ event for GEFI’s Path to COP26 campaign discussed how the finance sector can practically support action on climate change ahead of the COP26 summit next year in Glasgow. The session offered perspectives from banking, asset management and COP insiders, with Gail Hurley of GEFI joined by Cambridge University Visiting Fellow David Pitt Watson, Ingrid Homes of Federated Hermes, Isabel Fernandez of ING, and discussion moderator Hamish Patrick of Shepherd + Wedderburn. Click on the links to watch videos from the event, including all the presentations, the Q&A, and individual presentations from David, Isabel and Ingrid.

Gail Hurley introduced the Path to COP26 campaign, which seeks to ensure that the finance sector plays a leading role in the most important COP since Paris. Over 40 organisations have joined the campaign, representing £2.7 trillion of assets; click here to find out how to get involved

Gail highlighted a recent UN publication, which gave a damning report on the financial sector’s efforts so far to get funding to where it is needed. It has come up short in dealing with both climate change and development in the world’s poorest countries, despite positive signs across the sector.

David Pitt-Watson, investor, Cambridge Judge Business School Visiting Fellow and former UNEP FI chair during COP21 shared his practical experience of COP, and stressed that climate matters for finance. Finance needs to move money from where it is, to where it needs to be, but at present there is not enough green finance and far too much brown finance is still taking place.

COP is important because finance cannot solve the issue of climate alone, but needs support from policymakers, and it is important that discussions for ambitious climate agreements take place before the conference itself. The finance sector will likely be looked at with some cynicism and suspicion, in part because£100 billion was promised to the developing world as part of the Copenhagen Accord agreed at COP19, but evidence of its influence is hard to find.

David stressed that there is genuine progress in the finance sector, particularly on reporting, but more needs to be done. One area he felt that we can improve at COP is stewardship. Divestment diminishes the power we hold by maintaining equity;by using the votes equity holders have to appoint Directors, we can vote for those that align their organisations with the Paris Agreement. The onus is on the finance industry to demonstrate that we are doing the right thing: delegates will not be interested in virtue signalling.

Isabel Fernandez , Member of the Management Board and Global Head of Wholesale Banking at ING spoke about how the banks sees the pandemic as a chance to ‘hit the reset button’ and on issues including biodiversity loss, climate change and inequality.

While there are many commitments out there, it is action that counts and Isabel argued that ING have taken the lead when it comes to aligning lending portfolios with Paris.  They have done this by creating an approach called Terra, which uses scenario analysis to determine the impact of different sectors on the climate. Assessing the gap between the technology required to meet the Paris Agreement targets and those used currently by clients, Terra shows how far each sector is along the path towards Paris. This allows ING to finance the technology and innovation clients need to move their business closer to achieving the goals set,steering key sectors towards a low carbon future.

The second progress report on Terra has been released, showing that across the nine sectors which are contributing the highest emissions, most are on track to align with Paris. They have found that many clients are actively looking to develop sustainably so have bought in readily to this approach and the advice which ING have given. Terra is all open source to increase its reach and open collaboration across the banking sector. Isabel explained that ING believe that it is not where clients are today, but where they are heading which is most important.

Ingrid Holmes, Director – Policy at Federated Hermes opened by sharing some of the issues that they are dealing with. For instance, what needs to be done to commit to net zero, when they should be trying to achieve that goal, and also when they should be committing to becoming a Paris aligned firm.

There are six key things Federated Hermes expect every company to be thinking about:

  • Disclose in line with the TCFD
  • Sufficient governance and capacity to move forward with climate management
  • Embrace the complexity of the issues
  • Look beyond operations and strategy into supply chains
  • Use public policy influence positively to engage with government with new market rules
  • Commitment to science-based targets, with interim targets also established

Federated Hermes feel some activities are unjustifiable, such as thermal coal, and will be withdrawing capital from them. Controversial investments, such as those burning fossil fuels but in the process of transition, will require a business case to ensure the transition comes to pass or divestment will occur.

The session closed with a Q&A moderated by Hamish Patrick of Shepherd + Wedderburn, who asked the speakers how the trends and push towards climate finance that we are seeing is helping the developing world. David answered that this is a very difficult position where, with justification, the global south is looking at the north to fix the problem they have profited from. Promises of funding have not materialised and we need to get funds flowing to global south sustainable development projects. Isabel spoke about some of the feedback she has had from the global south, that the developed world has had 50 years of pollution to get to its present state, but nonetheless she has seen their determination and enthusiasm to develop sustainably. It then becomes ING’s role to help wherever they can.

Regarding the products needed for a transition, Ingrid spoke about the desire to see more thematic products with an explicit Paris alignment to them, adding that while there are an increasing number of products out there, we need to stop greenwashing. David argued that we do not need more complex products: the finance sector’s job is to manage the money of the millions of people who have invested money, often through their pensions, and to move it to where it needs to be. We have a set of financial institutions that are ‘Institutionally fossilist’ – institutions that have grown to up to be able to finance the old economy. Now we need to get the new systems that will finance the new economy.


Climate change: Ethical finance can help deliver a 'Marshall Plan for the planet' - Omar Shaikh

This article originally appeared in The Scotsman at https://www.scotsman.com/news/opinion/columnists/climate-change-ethical-finance-can-help-deliver-marshall-plan-planet-omar-shaikh-3001747

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.


Beyond Climate – Getting Nature on the Finance Agenda to Support a Green Recovery (The Herald)

This article was originally published in The Herald on 8th August 2020.

In November 2021 Glasgow will host the UN climate change summit, known as COP26. This is the most important climate summit since the landmark Paris Agreement in 2015 when heads of state committed to restricting global temperature rise this century to 'well below' 2°C above pre-industrial levels and to pursue efforts to limit it to 1.5°C. COP26 is first opportunity for nations to come together to review commitments and strengthen ambition.

Scotland is already leading by example with the Climate Change Bill making a commitment to becoming a net-zero society by 2045 – five years before the rest of the UK. The Scottish Government has also responded to the global climate emergency by adopting an ambitious new target to reduce emissions by 75 per cent by 2030. The Scottish National Investment Bank, which will be operational in the second half of 2020, will support the transition to net zero through a range of debt and equity products.

The financial opportunities and risks of transitioning to a low carbon, resilient global economy have catapulted climate change to the top of the agenda for investors, lenders and insurers across the globe. As well as setting ambitious targets to minimise their own greenhouse gas emissions many financial institutions are driving reductions in the climate impact of their financing activity by decarbonising their portfolios and increasing investments in solutions to climate change.

With Earth Overshoot Day looming later this month it is timely to reflect on the key role nature plays in regulating climate as well as helping us to adapt to and mitigate against climate change. By conserving nature and restoring ecosystems we reduce climate vulnerability and increase resilience.

The sustainable management and use of nature can help tackle wider socio-environmental challenges such as water security, water pollution, food security, human health and disaster risk management. However, with ecosystems declining in size and condition by 47 per cent globally, and species populations facing extinction, the wake-up call on nature loss arrived at this year’s World Economic Forum where, for the first time, the Global Risks Report ranked biodiversity loss as one of the top-five global risks in terms of likelihood and impact in the next 10 years.

Around $44 trillion of economic value generation – over half the world’s total GDP – depends on nature and its services and sustainable use of our environment in Scotland accounts for 11 per cent of our total economic output – worth £17.2 billion a year – and one in seven full-time jobs. The global coffee market had retail sales of $83 billion in 2017 but 60 per cent of coffee varieties are at risk of extinction from a combination of climate change, disease and deforestation.

Nature and biodiversity loss therefore represent a significant financial risk. Insufficient accounting for the risks posed by nature loss have unintended consequences, such as short or long-term risk mispricing, inadequate capital buffers, and in extreme cases the potential for stranded assets.

In boardrooms nature loss continues to be largely a hidden risk. This needs to change, and quickly.

The Scottish-based Global Ethical Finance Initiative (GEFI) is working with the United Nations Development Programme and Scottish Government on a 2 year programme of collaboration that aims to raise awareness and position nature at the forefront of the COVID-19 economic recovery and for the long-term well-being of people and the planet.

Within the programme, which forms part of our wider Path to COP26 campaign, we are actively looking to develop a financial instrument that accelerates nature-friendly investments at scale as well as draw upon our extensive global network to support other initiatives such as the Scottish Environment Protection Agency and Scottish Wildlife Trust’s challenge to unlock £1 billion of new investment for nature conservation in Scotland. We are also looking to explore the feasibility of a global framework for financial institutions measure and disclose nature-based risk.

With Covid-19 exposing the fragility of health security and financial systems there is a pressing need to build social, environmental and economic resilience. At GEFI, as we approach COP26, we are committed to working with our partners ensure nature joins climate at the top of the finance agenda to underpin a green and sustainable recovery. We will also continue to showcase and position Scotland as a leading global centre for ethical finance.

To find out about financing nature, and more, join us on 5-8 October for Ethical Finance 2020. To reserve your free place visit ethicalfinance2020.com


‘Putting the ‘eco’ back in economy’: Finance for Nature Virtual Global Series Kick-off

The kick-off of the Finance for Nature Virtual Global Series on 20 & 21 July brought together industry champions from finance, insurance, consumer goods companies, and standard-setting regulators, to tackle two questions on how to accelerate nature-friendly finance: (1) Why should nature be positioned at the heart of the finance and green recovery agenda? (2) How can private capital and corporations unlock nature’s potential to achieve impact for the planet and prosperity for its people?

Key takeaways from the series include:

  1. The financial sector is increasingly well informed on the impact of climate, but less so about how to account for biodiversity and nature in its portfolio. Industry champions called for the inclusion of nature and biodiversity loss, as climate change cannot be fully addressed without it.
  2. To move beyond the individual asset-based disclosure requirements, a framework for more systemic nature-related risk disclosure is needed, following the trajectory of mandatory climate disclosure.
  3. The finance community needs a greater focus on traceability of corporate supply chains around climate, deforestation and other nature-related issues. It also needs to build in systems of accountability such as standards, or certifications (e.g. RSPO for palm oil).

What’s the point of my pension fund if it contributes to a dead planet? We’ll finance ourselves into extinction. We need to put the ‘eco’ back in ‘economy- Andrew Mitchell, Global Canopy

Why should nature be positioned at the heart of the finance and green recovery agenda?

Susan Gardner, Director of the Ecosystems Division at UNEP and Omar Shaikh, Founder of the Global Ethical Finance Initiative expressed the urgent need to move nature further up on the finance agenda and to play a core role as part of the green recovery. And the audience agreed, with 87% of respondents to the live poll noting that their organizations consider climate and nature as interconnected in the context of investing. Further, when asked if they have a policy in place that integrates nature-based solutions into decision-making, 52% said Yes, 28% plan to have a policy in the future, and 21% do not have a policy.

Inger Adersen, Executive Director of the UN Environment Programme (UNEP), provided the opening keynote address, highlighting that the Covid-19 pandemic provides a stark reminder of human’s reliance on nature, particularly for health. About half of the world’s GDP is directly or indirectly reliant on nature, and the finance sector’s recognition of the physical risks posed by the destruction of nature is a positive step but more urgent action must be taken. Inger urged governments and the private sector to use the UNFCCC COP26 in November 2021 as a target to steer economies towards a green transition that maximizes growth, employment and resilience.

UNDP Administrator, Achim Steiner, stressed the importance of nature for sustainable and equitable development and recovery from Covid-19, noting that 2.5 billion people depend on nature. Failure to seize the opportunity to place nature firmly on the green recovery agenda could lead to delayed progress by up to 10 years and failure to achieve the Sustainable Development Goals (SDGs). Accelerating decision-making and delivering impact at scale will require rebalancing the economic system with incentives and frameworks to ensure nature is not a marginal consideration operating in a parallel economy but a valuable asset that is understood, measured and incorporated into transformational policy strategies.

De Nederlandsche Bank recently published its ‘Indebted to Nature’ report which highlights the Dutch financial sector’s exposure to risks from biodiversity loss. The report estimates that Dutch financial institutions have over €500 billion in exposure to companies with high or very high dependence on ecosystem services, or approximately 36% of the examined portfolio. Executive Director of De Nederlandsche Bank, Olaf Sleijpen, stressed that although the world is in the midst of global health and economic crisis we cannot lose sight of the threat posed by climate change and biodiversity loss. The current situation presents a unique opportunity to take steps towards creating a carbon neutral economy. Olaf called on other central banks to build on the approach taken in the Netherlands to further explore and develop best practice to enable financial services to catalyse change and to promote consistent standards and frameworks for biodiversity risk measuring and reporting.

Biodiversity and nature loss pose major economic, social and environmental threats that we cannot afford to ignore. - Olaf Sleijpen, DNB

The audience also heard from an expert panel, moderated by UNDP’s Head of Climate Promise, Cassie Flynn, with representatives from the banking sector, insurance, asset managers, and leading thinkers on sustainable investing. Speakers included, Philippe Zaouati, CEO of Mirova; Brooke Barton, Vice President of Innovation and Evaluation at Ceres; Stephen Hibbert, Managing Director at ING; Veronica Scotti, Chairperson Public Sector Solutions at Swiss Re; and Diandra Soobiah, Head of Responsible Investment at Nest Pensions. The keynote speakers outlined a vision for a nature-forward future and panelists discussed the key practical solutions needed to position nature in the finance agenda.

Firstly, as we have now reached a tipping point where the impacts of deforestation and climate change may be irreversible, deforestation must be recognised as a risk that is embedded across commodities, asset classes and industries. Ceres presented the Investor Guide to Deforestation and Climate Change: a tool which provides timely guidance for financial institutions to divest from deforestation and to engage with their portfolio.

Secondly, there is a need to build robust impact measurement indicators that could address the complexities in measuring biodiversity. Mirova is currently joining forces with other partners to develop a tool that includes impact measurement on biodiversity for listed companies, which could help reduce the risk of greenwashing in the industry.

Thirdly, coordinated efforts across asset classes will be essential to improve the existing toolkits and develop new methodologies, metrics and taxonomies to integrate nature into financial decision-making. As noted by Swiss RE, insurers have a key role to play in leading this movement: they understand risk and invest in the long term, so they are well placed to embrace finance for nature. Building from the TCFD experience for climate, ING highlighted that this collective effort for nature also needs to involve actors from the scientific and data communities, who can support the financial sector to address this challenge with greater confidence. Civil society and global investor movements are already calling asset owners to redirect finance flows to nature-friendly investments. Among them, NEST Pensions supports the Make My Money Matter campaign that is calling on pension providers to think of the planet and its people alongside making a profit.

Audience Q&A topics:

    • Best practice in communicating effectively with customers
    • Obstacles to achieving a pipeline of investable projects
    • The role of central banks in the green recovery
    • Ensuring that no one is left behind through the protection and creation of livelihoods.

How can private capital and corporations unlock nature’s potential to achieve impact for planet and prosperity?

The second day of the series focused on the financial risk of biodiversity loss and the role of the private sector to take action. Midori Paxton, Head of Ecosystems and Biodiversity at UNDP and Andrew Mitchell of Natural Capital Finance Alliance and Global Canopy facilitated the discussion. Elizabeth Mrema, Executive Secretary of the Convention on Biological Diversity (CBD), opened the session with an uplifting reminder that 2020 is still the ‘Super Year’ for nature. Now is the time to reassess human’s relationship with nature and to recognize that nature is a public good which has been over-exploited. $44 trillion of economic activity is largely dependent on nature, providing the economic case for increasing nature-friendly finance and since the private financial sector is a critical enabler of markets it can contribute positively to halting biodiversity loss. Ms. Mrema urged the financial sector to ensure that financial disclosure initiatives contribute to the 2030 Biodiversity Framework to protect 30% of earth’s lands and seas.

A new reporting framework called the Task Force for Nature-related Financial Risk Disclosure (TNFD) was announced by Minister Zac Goldsmith, UK Minister of State for the Pacific, International Environment, Climate and Forests, and Animal Welfare. Ten financial institutions, the World Business Council For Sustainable Development and the UK and Swiss governments have backed the initiative, supported by UNDP, UNEP, Global Canopy, and WWF. It aims to increase financial flows at scale towards nature-positive investment and lending opportunities to allow people and the planet to flourish. In an audience poll, 89% of participants voted ‘Yes’ that disclosure of nature-related risk can drive real change and is not just a mere box-ticking exercise.

The pandemic is one symptom of our dysfunctional relationship with the natural world and we need to reset the relationship with nature. - Zac Goldsmith, UK

The expert panel included industry champions from private financial institutions like banks and insurance, and experts in private sector nature-related risk disclosure, including, Adam Kanzer, Head of Stewardship at BNP Paribas; Sonja Gibbs, Sustainable Finance Working Group at the Institute of International Finance (IIF); Mark Kenber, Managing Director at Climate Advisers; Rowan Douglas, Head of Capital Science & Policy Practice at Willis Towers Watson; and Bas Rüter, Director of Sustainability at Rabobank.

The three leading experts from the financial sector - BNP Paribas, Willis Towers Watson, and Rabobank - shared their insights on a private sector perspective of nature-related risk. They recognize the role of increased accountability to drive action and noted the role of government to provide the necessary enabling conditions but also of banks to fulfill their obligation to deliver valuable, long-term investments to clients and investing in nature is a valuable, long-term investment. They urged that climate risk disclosure should go further to account for nature as a climate change adaptation, not just mitigation. For example, Willis Towers Watson noted the importance of accounting for the physical risk of coral reefs or mangroves degradation which protect coastal communities and ecosystems from storm surges. When this risk is valued, there is much higher incentive to address it and prevent it.

The risk the world faces is not just biodiversity loss but the collapse of nature all together...We cannot preserve shareholder value without preserving nature and biodiversity.- Adam Kanzer, BNP Paribas

Deforestation is a major threat to biodiversity loss, mainly driven by cleared land for industrial agriculture and urgent action is needed to divest from deforestation. Banks have a role to play by providing the right incentives working with companies to create a better market price for sustainably-produced goods. One example is Rabobank’s efforts to offer lower interest rates for sustainable production in Brazil, where deforestation rates are high. Direct engagement with clients to ensure soft commodity supply chains are nature and climate-friendly, through a regional approach that fits the local context, is an impactful way investors can take action. However, there is a gap in knowledge on deforestation in supply chains - few investors are aware of the deforestation risk in their investment portfolio and the financial cost of that risk is high.

According to Orbitas Finance, presented by Climate Advisers, 44 financial institutions each have over $300million invested in palm oil alone and investors in 13 companies have at least $23 billion at risk. Orbitas provides a tool to assess deforestation risk in investor portfolios. Other related resources for assessing supply chain natural capital risk, noted throughout the series include: Encore and Gist Impact. A trend towards increased supply chain transparency, where companies are required to show where their assets are located, is helping to put pressure on companies to take action. Willis Towers Watson noted that the emerging use of spatial data to assess financial risk can help accelerate that pressure. Other examples of financial products and investor actions, as noted by IIF include, social bonds, debt for nature swaps, and biodiversity offsets and all rely on proactive and consistent measurement and reporting of risk. Ultimately, to account for nature loss, a collaborative and common approach to natural capital risk reporting and disclosure is needed and panelists underscored that a nature-related financial disclosure system like TNFD is a promising step. Just as the climate change financial risk task force helped channel private sector behavior through the TCFD overarching framework, this is what is needed for nature, and it must use the TCFD momentum.

Nature to be embedded into classic macroeconomic analysis...[We need] a nature-equivalent of scope 3 emissions for climate, e.g. ‘scope 3 depletions’ - Sonia Gibbs, IIF

Audience Q&A topics included:

    • the methodologies for putting an economic value on nature assets and potential externalities
    • the gaps in understanding nature-related risk and implementing actions to avoid it
    • the role of governments to regulate nature-related risk

Finally, Nigel Topping, UK High-Level Climate Action Champion, expressed hope for a nature-related financial risk disclosure platform as the next big step for finance and invited the audience to join the Race to Zero November Dialogues, where discussions about finance for nature will continue and hopes that these discussions will influence positive outcomes for finance for nature at the UNFCCC COP 26 in November 2021.

The two inaugural sessions of the Finance for Nature Virtual Global Series laid the groundwork for future discussions that aim to advance the integration of nature-related risks and considerations in the international financial policy and regulatory agenda. Covid-19 presents a unique opportunity to build back an economy that repairs our relationship with nature and addresses biodiversity. The evidence is clear - $3.6 trillion in business opportunities from sustainable food, land and ocean use, representing 191 million new jobs over the next 10 years, and more than half the world’s GDP and 2.5 billion people depend on nature - Nature-friendly investments must be scaled up to protect people, planet, and prosperity and to ensure a green economic recovery.

 

More sessions in the Finance for Nature Series will be announced soon. You can view the full event report and recordings from the sessions on the event web page here.

About The Finance for Nature Virtual Global Series: Designed as a series of high-level, quarterly, virtual dialogues leading up to COP26, the Global Series will look to advance the integration of nature-related risks and considerations in the international financial policy and regulatory agenda. It brings together industry champions from finance, insurance, consumer goods companies, and standard-setting regulators, and aims to drive practical commitments on investing in nature. This series is organised by UNDP, UNEP, the Scottish Government backed-Global Ethical Finance Initiative, Climate Advisers and partners of the New York Declaration on Forests.

 


Path to COP26: Chartered Banker Institute launch Green Finance Essay Competition

The Chartered Banker Institute (CBI) has launched a Green Finance Essay Competition. The professional association, one of the partners of the Global Ethical Finance Initiative’s (GEFI) Path to COP26 campaign, has called for applicants to answer the question of “How can finance professionals actively encourage changes in consumer behaviour to achieve society’s goals on climate change?”, making reference to the UN’s Sustainable Development Goals and the Paris Climate Agreement.

The winner will receive £100 of ethical gift vouchers and have their essay published in the “Pathway to COP26 – the Role of Green Finance” essay series from the CBI and the Social Market Foundation (SMF), as well as receiving the opportunity to present their paper at GEFI’s prestigious Ethical Finance 2020 summit.

“Safe stewardship (of customers’ money) has been a fundamental principle of the Chartered Banker Institute since it was established in 1875.  Today, we consider stewardship in its broadest sense – beyond finance to encompass the safe stewardship of our environment and resources.

The transition to a sustainable low-carbon economy is possibly the greatest global challenge for this and future generations, with green finance and green finance professionals playing critical roles.”

Chartered Banker Institute

The competition is open to people of any age in the UK or internationally, and entrants do not need to be members of the CBI. Answers to the question should be no more than 1,500 words and will be judged by a panel including the CEO of the CBI, Simon Thompson. Essays should be submitted, along with a short biography about your career and interest in Green Finance, by Friday 31st July 2020 to the Chartered Banker Institute at this link.


COP26 – FINANCE SECTOR MEETS IN SCOTLAND TO BUILD GREENER ECONOMY

PRESS RELEASE FROM THE GLOBAL ETHICAL FINANCE INITIATIVE

EMBARGO: IMMEDIATE

COP26 – FINANCE SECTOR MEETS IN SCOTLAND TO BUILD GREENER ECONOMY

Leading financial institutions will come together in Edinburgh today (THU) for the start of a ‘Path to COP26’ campaign to build a greener global economy. A round table event will explore the role of the finance sector in the transition to a low-carbon and climate-resilient economy in the run-up to the global climate change summit in Glasgow in November.

To start the process of accelerating the combined efforts of the industry, the event will be addressed by Jonathan Taylor, former Vice President (Environment and Climate Action) at the European Investment Bank, and Gary Lapthorn, the head of sustainability and responsible business at Lloyds Banking Group Commercial Banking.The round table has been organised by the Edinburgh-based Global Ethical Finance Initiative (GEFI), which oversees, organises and coordinates a series of programmes to promote finance for positive change.

As part of the ‘Path to COP26’ campaign, GEFI will also host a series of events in the UK and beyond, ahead of the November summit. The campaign is designed to encourage banks, asset management firms and other financial companies to demonstrate their commitment to the climate agenda. According to the United Nations Environment Programme Finance Initiative, the climate transition will require additional investment of at least $60 trillion from now until 2050 – meaning private sector commitments are vital to tackling the climate crisis.
Bold climate action could deliver at least US$26 trillion in economic benefits through to 2030, compared with business-as-usual, a recent report from the Global Commission on the Economy and Climate found.

Gail Hurley, senior consultant to the Global Ethical Finance Initiative and former senior advisor to the UN, said:
“The eyes of the world will be focused on Scotland when senior politicians from across the globe convene at COP26 in Glasgow in November to negotiate the global response to tackling climate change.
“Climate change is a large, systemic financial risk that will change asset values as investment moves away from high carbon assets towards a low carbon economy.
“For financial institutions to become enablers and catalysts they must therefore understand the commercial risks and opportunities and know how to act on them.
“Finance can be a positive force for change, and we call upon organisations from across the globe to sign up to our Path to COP26 declaration to help us assist the financial sector to commit to practical efforts to tackle climate change.”

Jonathan Taylor, former Vice President (Environment and Climate Action) at the European Investment Bank, said:
“COP26 in Scotland will be a key milestone on the road to a successful conclusion to the fight against climate change.
“Expectations are high that countries should commit themselves to demanding targets to meet the agreed goal of the Paris Agreement to limit global warming to below 2 degrees above pre-industrial levels.
“So we should all think about what we can do to help ensure success, including financial institutions.
“The GEFI round table’s ‘Path to COP 26’ initiative makes an excellent contribution, and I am delighted to be part of it.”

 

Gary Lapthorn, head of sustainability and responsible business at Lloyds Banking Group, Commercial Banking, said:
“Lloyds Bank Commercial Banking is delighted to support the GEFI round table exploring the role financial institutions are playing in the transition to a low-carbon and climate-resilient economy.
“As part of the UK’s leading financial services group, Lloyds Banking Group, we can make a real difference to tackling climate change by helping to finance a greener future together.
“This will require new ways of living, working and investing for our business and our customers.
“That’s why we’re setting ourselves an ambitious goal to accelerate working with customers, government and the market to help reduce the carbon emissions we finance by more than 50 per cent by 2030, equivalent to removing the emissions produced by almost a quarter of UK homes.”

 

ENDS

NOTES TO EDITORS

More information is available at www.pathtocop26.com

Broadcast interview opportunities with GEFI are available.

A photo of Gail Hurley is available for download here.

A photo of Jonathan Taylor is avilable for download here.

What is the Global Ethical Finance Initiative?
The Global Ethical Finance Initiative (GEFI) oversees, organises and coordinates a series of programmes to promote finance for positive change. It brings together the world’s business, political, and social leaders to build a fairer finance system for people and the planet. The organisation is based in Edinburgh, and hosts the global ethical finance summit. More information is available at www.globalethicalfinance.org/ethical-finance-2020/

What is ethical finance?
A fairer system of financial management that combines profit with better outcomes for people and the planet. The full working definition of ethical finance: A system of financial management or investment that seeks qualitative outcomes other purely the management of returns. Outcomes sought may reflect ideas from faith, environmental and governance theories.

Why does ethical finance matter?
Although ethical finance is not a new concept the financial crisis has led to a growing interest in sustainability, climate change and social justice. This has seen a collective desire to create a fairer, more inclusive and responsible global financial system. Trust in banks is diminishing and today’s generation of consumers believes that investment decisions should reflect the issues they care about. Ethical finance in the UK is valued at around £40billion, creating thousands of sustainable job opportunities. Today, with the world facing a climate emergency there is a pressing need to develop environmentally sustainable financial solutions.


Launch of 'Path to COP26' to address climate emergency

PRESS RELEASE FROM THE GLOBAL ETHICAL FINANCE INITIATIVE

EMBARGO: IMMEDIATE

LAUNCH OF ‘PATH TO COP26’ TO ADDRESS CLIMATE EMERGENCY

An Integrated Campaign in the run-up to the UN summit in Glasgow has been launched to bring the world’s finance sector together to address the climate emergency. The Global Ethical Finance Initiative (GEFI) will host a series of events in London, the USA, Gulf States and Asia ahead of the pivotal COP26 summit in November. The ‘Path to COP26’ initiative is designed to encourage banks, asset management firms and other financial companies to demonstrate their commitment to the climate agenda. That includes ethical investment decisions which help the environment, financing the clean energy sector, and offering ‘green’ options to clients for assets and pensions.

As well as the flagship Ethical Finance 2020 global summit in Edinburgh in October, a number of events on climate finance will also be held in Glasgow in November alongside COP26.
GEFI has already attracted six major partners – the Scottish Government; the United Nations Development Programme; Baillie Gifford; Royal Bank of Scotland; Chartered Banker Institute; and Shepherd + Wedderburn – and is inviting all organisations with an interest to take part. COP26 will be the largest gathering of world leaders in the UK since the opening ceremony for the 2012 Olympics, and the Prime Minister this week focused on the event at the first Cabinet meeting of the year.
It is widely seen as the most important gathering on climate change since the Paris Agreement of 2015.

Omar Shaikh, managing director of the Global Ethical Finance Initiative (GEFI), said:Omar Shaikh
“COP26 in Glasgow presents an unprecedented opportunity for the finance sector to come together to address the global climate emergency. “The launch of the Path to COP26 initiative will see events held across the world in the run-up to Glasgow, focused on developing commitments to the climate agenda and how to deliver impact. We already have six major partners and would encourage more to join the programme. “All financial institutions need to enhance transparency and choice by highlighting the impact of what they are financing and offering ethical options to their clients. “There are great opportunities for asset owners to invest in the clean energy sector, and public bodies and individuals are demanding greener pensions.
“We cannot miss this opportunity to deliver for future generations.”

Gail HurleyGail Hurley, senior consultant to the Global Ethical Finance Initiative and former senior advisor to the UN, said:
“All eyes are focused on the UK as this year’s host of what is arguably the world’s most important international conference. “Near the top of the agenda is how to mobilise the trillions needed for international climate financing programmes. “Within the financial services sector, interest has increased significantly over recent years in the ways it can – and should – look beyond short-term profit and shareholder value towards how it can drive positive social, economic and environmental impact. “Finance can be a positive force for change. The Path to COP26 initiative will accelerate the transformation towards a more socially responsible and inclusive financial system which serves both people and planet.”

ENDS

NOTES TO EDITORS

More information is available at www.pathtocop26.com

More information on the Ethical Finance 2020 global summit is available here: www.ethicalfinance2020.com

Broadcast interview opportunities are available.

A photo of Omar Shaikh is available for download here. A photo of Gail Hurley is available for download here.

What is the Global Ethical Finance Initiative?
The Global Ethical Finance Initiative (GEFI) oversees, organises and coordinates a series of programmes to promote finance for positive change. It brings together the world’s business, political, and social leaders to build a fairer finance system for people and the planet. The organisation is based in Edinburgh.

What is ethical finance?
A fairer system of financial management that combines profit with better outcomes for people and the planet. The full working definition of ethical finance: A system of financial management or investment that seeks qualitative outcomes other purely the management of returns. Outcomes sought may reflect ideas from faith, environmental and governance theories.

Why does ethical finance matter?
Although ethical finance is not a new concept the financial crisis has led to a growing interest in sustainability, climate change and social justice. This has seen a collective desire to create a fairer, more inclusive and responsible global financial system. Trust in banks is diminishing and today’s generation of consumers believes that investment decisions should reflect the issues they care about. Ethical finance in the UK is valued at around £40billion, creating thousands of sustainable job opportunities. Today, with the world facing a climate emergency there is a pressing need to develop environmentally sustainable financial solutions.


COP26 – Role of Finance in Tackling the Climate Crisis

COP26 – Role of Finance in Tackling the Climate Crisis

This year’s UN Climate Change Conference in Madrid has wrapped up, and all eyes will now focus on Scotland as next year’s host of what is arguably the world’s most important international conference. Also known (somewhat confusingly) as COP 26, Glasgow will be centre stage between 9 and 20 November 2020 as it welcomes an estimated 30,000 delegates from around the world.

Next year’s climate change conference will be particularly important since it will mark five years since the historic Paris Climate Agreement, which committed countries to strengthening actions to combat climate change and limit the global temperature rise this century to below 2 degrees Celsius. We know however that the world is not on-track to cut carbon emissions which must be halved on today’s levels to restrain temperature increases to just 1.5 degrees Celsius, the upper limit advised by climate scientists. Progress will need to be ratcheted up by next year.

Over 500,000 people marched through the centre of Madrid this month, joined by young climate activist Greta Thunberg, to demand quicker action to tackle climate change, yet many have been left frustrated by the lack of urgency that has characterised this year’s climate conference. Madrid has been dominated by disagreements over carbon emissions trading (where more polluting countries can purchase the right to pollute from countries that have not yet reached their emission limits – seen by many as deeply unfair and a false solution to the climate crisis) and an international push to have rich countries pay poorer countries for “loss and damage” associated with irreversible climate change impacts.

Next year, the spotlight is expected to shine on the thorny issue of how to pay for climate damage, and how to mobilise the trillions needed for international climate financing programmes.

Financing needs to tackle the climate crisis are estimated in the trillions worldwide, and are especially high in the poorest countries and those particularly vulnerable to climate change, such as small island states. The UN estimates a US$ 3 trillion annual shortfall in investments needed to meet internationally-agreed climate and sustainable development goals.

A decade ago, industrialised countries pledged to jointly mobilise US$ 100 billion annually in climate finance by 2020 to address their needs. Yet only US$ 71 billion was raised in 2017, mostly from public sector aid budgets (and with most provided as loans). There is a consensus that more resources need to be mobilised from private markets for climate-friendly investments and to support a “just transition” to net-zero.

This is where our work to promote Scotland as a leading international centre for ethical and responsible finance comes in. The climate emergency has underscored the importance – indeed urgency – of building a financial system that has better outcomes for people and planet at its heart. Our work at the Global Ethical Finance Initiative (GEFI) headquartered in Edinburgh, builds on Scotland’s proud heritage in ethical finance and financial services, to convene the world’s foremost political, business and civic leaders to define and shape the transition to a sustainable financial system.

Within the financial services sector, interest has increased significantly over recent years in the ways it can – and should – look beyond short-term profit and shareholder value towards how it can drive positive social, economic and environmental impact. Increasingly, investors and consumers want to be more thoughtful about the impact their money can make on the world. This has led to a plethora of new initiatives and financial products, such as ethical investment funds, sustainability bonds (where the proceeds are exclusively applied to finance green or social projects), and the development of UN-led Principles for Responsible Investment. Globally, the impact investment market is increasingly popular and is now estimated at over US$502 billion (impact investments are those that seek a positive social and environmental impact in addition to a financial return).

At this year’s climate conference, the European Union unveiled its “Green New Deal” intended to transform Europe’s economy and eliminate its contributions to climate change by 2050. Scotland is even more ambitious: this year it adopted landmark legislation to become a net zero society by 2045, and to reduce emissions by 75% by 2030. Delivering a green transformation that will support employment creation, build skills, boost wages and trigger technological advances will require building a new generation of infrastructure and industries. In addition to well-planned public expenditure that can crowd-in private investment, banks will need to ensure they are able to provide the kinds of financing needed to support this transformation. Aligning their business strategies with society’s goals will in turn will help them leverage new business opportunities and remain competitive with the emergence of the sustainable development economy.

Our view is that finance can be a positive force for change. As we enter a “decade of action” on climate and sustainable development, COP26 in Glasgow in 2020 provides an opportunity for Scotland to showcase the important work it is doing to accelerate the transformation towards a more socially responsible and inclusive financial system – one that serves both people and planet.

 

By Gail Hurley: Senior Consultant, Global Ethical Finance Initiative (GEFI)

Gail was formerly a Senior Advisor to the UN

Follow on Twitter: @gailmlhurley

Follow GEFI on Twitter: @Finance4Change