What will the UK Government's 'nature positive' response to Dasgupta mean for finance?
The UK government recently committed to a 'nature positive' response to Prof. Sir Partha Dasgupta's review of the Economics of Biodiversity. At Ethical Finance 2021 last week, Prof. Dasgupta called for a 'World Bank of Biodiversity', arguing that despite the complexity of nature and biodiversity, there are ways of reducing the issues to fairly simple economic principles. The biosphere should be treated as a global public good, argued Prof. Dasgupta at the annual Ethical Finance Summit, explaining that treating it as such would justify paying penalties for its desctruction.
In the UK Government's response to Prof. Dasgupta's review, it committed toi a number of actions ahead of the crucial COP26 climate summit in November. These include:
- Committing up to £3 million additional support to the development of the Taskforce on Nature-related Financial Disclosures framework – a market-led initiative which will support business in assessing emerging nature-related risks and opportunities
- Working with the Office for National Statistics to improve the way nature is incorporated into our national accounts
- Further improving Government guidance for embedding environmental considerations into policy-making processes
- Incorporating biodiversity into the UK Government Green Financing Framework
- Joining the OECD Paris Collaborative on green budgeting, an initiative to encourage governments to incorporate climate and environmental considerations into their financial and fiscal decisions
These are all no doubt positive developments - necessary steps on the way to creating global frameworks that protect biodiversity and the biosphere. However, given the scale of the challenges we face, are they enough? The Living Planet Report 2020 reports stark statistics regarding biodiversity, including:
- An average 68% decrease in population sizes of mammals, birds, amphibians, reptiles and fish between 1970 and 2016
- A 94% decline for the tropical subregions of the Americas over the same period
- 75% of the Earth’s ice-free land surface has already been significantly altered, most of the oceans are polluted
- More than 85% of the area of wetlands has been lost
- Until 1970, humanity’s Ecological Footprint was smaller than the Earth’s rate of regeneration. To feed and fuel our 21st century lifestyles, we are overusing the Earth’s biocapacity by at least 56%
- Per person, our global stock of natural capital has declined by nearly 40% since the early 1990s, while produced capital has doubled and human capital has increased by 13%
Put simply, nature is in crisis, and as this crisis depens, it will affect our economies more and more. As the Dasgupta review pointed out nature suffers from a 'Tragedy of the Commons' effect - while the benefits for its destruction are privatised, the costs are public - a classic 'Principal-Agent problem', in the economists' parlance. To address this, we desparately need global cooperation between governments, finance, business and civil society on protecting biodiversity, and we need it now. THe steps the UK Government has committed to are a crucial step on the road to protecting nature with a 'World Bank for Biodiversity', but without committments to go further - to not just report and disclose impacts, but actively work to prevent them - there is a risk that this could be too little, too late.
The finance sector needs an urgent, credible plan to make TNFD reporting mandatory, as reporting in line with TCFD is likely to become soon. While TCFD's progress from idea to (in some territories) law has been admirably fast relative to the usual pace of public policy, it has still been too slow relative to the climate crisis. To respond to the crisis of nature and biodiversity that we are seeing, TNFD must be even faster.
At COP26, we will be exploring these issues as part of our Finance for Nature programme in our Path to COP26 campaign, with a dedicated focus on nature discussions in the unique setting of Loch Lomond. Click to learn more.
Sustainable Finance Qualifications - From Complete Beginners to Seasoned Professionals
The sustainable finance movement is rapidly growing, with a 55% predicted growth in 2021. Therefore, people at every career stage need to get involved. There has been a gap in qualifications to improve and enhance people’s knowledge of sustainable finance, but finally we are seeing qualifications emerging. There are qualifications available for people in varying stages of their careers.
Click to navigate to the relevant section:
Qualifications and Career Options for University Graduates in Sustainable Finance
| Course Name | Location | Cost/Pay | Length | Entry Criteria | Overview | Further Information |
| EY Sustainable Finance Graduate Programme | UK |
| 2 year programme |
|
| To register interest to 2022 application openings and find more information click here.
|
| MSc Climate, Management and Finance | Imperial College London | Cost: £30,700
| One year course starting September 2021. |
|
Students will:
| To apply and find out more information click here. |
| MSc Climate Change Finance and Investment | University of Edinburgh | Cost:
| 1 Academic Year: September 2021 to August 2022 |
|
| To apply and find out more information click here. |
| MSc in Sustainability, Enterprise and the Environment | Smith School of Enterprise & the Environment at the University of Oxford | Cost:
| New 12 month course launching in October 2021. |
| The course addresses two prevalent and unmet challenges of today’s climate:
| To apply and find out more information click here. |
Qualifications for Professionals in Sustainable Finance
| Course Name | Location | Cost | Length | Entry Criteria | Overview | Further Information |
| Chartered Banker Institute Green & Sustainable Finance Certificate | Online | £595 (including £30 annual subscription fee) |
|
|
| To apply and find out more information click here.
|
| Climate Change Risk in Finance | University of Edinburgh Business School (Online) | £1500 |
| Aimed at financial services and fintech professionals who are:
|
| To register and find out more information click here. |
| Sustainable Finance Foundation Course | Smith School of Enterprise & the Environment at the University of Oxford |
|
| Applicants must show their suitability to the course in terms of:
|
| To apply and find out more information click here. |
| CFA UK Level 4 Certificate in ESG Investing
| Online | £485 per candidate |
|
|
| To register and find out more information click here. |
| Climate-Related Financial Risk Course | Smith School of Enterprise & the Environment at the University of Oxford |
|
| Applicants must show their suitability to the course in terms of:
|
| To apply and find out more information click here. |
| ESG & Sustainable Investing Training Course | Virtual Training Course by ESG Investing | £1990 + VAT |
| Should be attended by:
|
| To register and find out more information click here. |
Accessible Qualifications for anyone interested in Sustainable Finance
| Course Name | Location | Cost | Length | Entry Criteria | Overview | Further Information |
| Short Course in Sustainable Finance | University of Cambridge (Online) | £2,200 |
|
|
| To register and find out more information click here.
|
Ethical Finance 2021 | Day 2 | Sustainability | Round-Up
Day 2 of Ethical Finance 2021 was a jam-packed day of fascinating exchanges, unpicking the complex challenges of delivering Net Zero and the macro-economic factors underpinning them. Our sessions and speakers all pointed towards the need to shift global focus to issues of sustainability, prevent further nature loss and make a business case of biodiversity preservation. Together, they have layed the ground for our focus on Day 3 of our Ethical Finance Summit: How to move beyond climate to achieve long-term, sustainable solutions in finance and beyond ahead of COP26.
We started off with Kirsty Britz Director of Sustainable Banking at NatWest Group, highlighting how the #EthicalFinance2021 is an opportunity for NatWest Group and others to learn collaboratively. Next, Inger Andersen, Executive Director at United Nations Environment Programme Finance Initiative (UNEP FI), outlined her four-step action plans for financiers (watch now). Dr Werner Hoyer, President of European Investment Bank (EIB), then outlined the daunting set of challenges we face globally from the COVID-19 pandemic to the climate crisis, emphasising that this is our last chance to make real change. Bill Winters, CEO of Standard Chartered Bank launched a new Carbon Dated report looking at the impact of MNCs’ #netzero intentions on suppliers in Asia, Africa and Middle East - read it now at sc.com/carbon-dated.
We then moved on to our 'Global Trends in Sustainability' Panel with Dame Susan Rice from FSCB, Tan Sri Dato’Zeti Aziz, former Governor of Bank Negara Malaysia and Katie Murray, Group Chief Financial Officer at NatWest Group, who unpicked some of the challenges around sustainability finance globally. Our last session of the morning saw Dr. Sarah Ivory from University of Edinburgh Business School in conversation with Steve Waygood, Chief Responsible Investment Officer at Aviva Investors, spotlight the International Platform for Climate Finance (IPCF), and its work building consensus ahead of COP26.
To kick off our Net Zero session, Kaisie Rayner FRSA Rayner, Climate Change Lead at Royal London interviewed Manuel Pulgar-Vidal Global Energy and Climate Practice Lead at WWF and former COP President, who advised Alok Sharma to "be the DJ", mixing all the avenues for climate action together to create the right sound! Our approaches to 'Delivering Net Zero in Banking and Investment' Panel discussion was lead by David Pitt-Watson, Visiting Fellow at Cambridge Judge Business School. He challenged Deirdre Michie OBE, CEO at OGUK, Masja Zandbergen-Albers , Head of Sustainability Integration at Robeco, Kaitlin Crouch-Hess, Sustainability Manager at ING and Joanne Manda, Regional Advisor, Climate Change and Innovative Finance at UNDP Indonesia on greenwashing, practical tools for Net Zero, the role of the fossil fuel sector, transparency, and the responsibilities of the financial sector. Our Initiative Spotlight profiled the Institutional Investors Group on Climate Change (IIGCC). Clare Foster, Head of Clean Energy and Green Recovery Lead at Shepherd and Wedderburn was joined by Daisy Streatfeild, Investor Practices Programme Director at the Institutional Investors Group on Climate Change (IIGCC) and Dewi Dylander, Deputy Executive Director at PKA, who outlined how the framework grew from a small group of investors interested in the Paris Agreement, to a vital tool in assessing investment portfolio alignment to science-based targets.
Our Nature session opened with Greg Ritchie in conversation with Prof. Partha Dasgupta, author of the review into the Economics of Biodiversity, who called for a 'World Bank for Biodiversity' (read more in Bloomberg or watch now). Our last session panel saw Andrew Mitchell from Global Canopy bring together Antoine Sire from BNP Paribas, Charlotte Kaiser from NatureVest, Madeleine Ronquest from First Rand and Reza Marvasti from ISS ESG, for a lively panel exploring the routes to practical action on biodiversity from a range of viewpoints. The day closed with and initiative spotlight lead by Natalie Jackson, which highlighted the work of TFND, which launches tomorrow, drawing on the expertise of Elizabeth Mrema from UN Biodiversity and Mikkel Larsen from DBS Bank.
Tomorrow, we will be looking ‘Beyond Climate’ which will be opened by The Scottish Government First Minister herself Nicola Sturgeon at 09.20 BST.
Remember to sign in using our EfX Global login: https://www.efx.global/ethical-finance-2021-sign-in/
You can find more ore information about all of sessions and speakers at ethicalfinancesummit.com
Financing A Sustainable Future- Global Ethical Finance Summit Speakers Revealed
The Earth Day Summit convened by President Biden has put delivering finance front and centre of the world’s efforts to deliver climate change. Countries and companies not only need to make commitments but also must have clear plans in place to deliver them.
A major UK summit on climate finance this summer will bring together global finance leaders, the head of the European Investment Bank, CEOs of major banks and UN chiefs ahead of COP26 The summit builds on ten years of work by the Global Ethical Finance Initiative to reshape the finance sector for a sustainable future.
Ethical Finance 2021, to be convened virtually in Scotland, will include leadership showcases from fourglobal financial centres with more than 3000 delegates from over 100 countries expected to participate in the three-day event. Free registration is now open.
The Global Ethical Finance Initiative (GEFI) summit is hosted by NatWest Group, and supported by Chartered Banker and the Chartered Institute for Securities & Investment, as well as the Scottish Government and the United Nations Development Programme (UNDP).
Keynote speakers include:
• Dr Werner Hoyer, president of the European Investment Bank.
• Achim Steiner, UNDP Administrator
• Manuel Pulgar-Vidal, WWF’s climate and energy global practice leader, a former Environment Minister of Peru and chair of COP20.
• Hiro Mizuno, UN special envoy on innovative finance and sustainable investments, and former executive management director of the Government Pension Investment Fund of Japan – the largest pool of retirement savings in the world.
• Bill Winters, CEO of Standard Chartered Bank
• Inger Anderson, executive director of the United Nations Environment Programme.
• Dora Benedek, deputy division chief, fiscal affairs department of the International Monetary Fund.
• Professor Sir Partha Dasgupta, the Frank Ramsey Emeritus Professor of Economics at Cambridge University and author of The Economics of Biodiversity: The Dasgupta Review.
• John Glen MP, Economic Secretary to the Treasury and City Minister.
With a global footprint and Scottish roots, GEFI is leading a ‘Path to COP26’ campaign which has united major financial services institutions representing over £2 trillion in assets to help build more resilient economies which support the transition to a greener, net-zero planet.
The finance sector needs to act together to achieve decisive action at COP26, the most important climate summit since Paris, and the campaign will deliver a series of over 30 events and projects leading up to Glasgow.
This includes Ethical Finance 2021, the flagship global summit to be convened in June.
Omar Shaikh, co-founder of the Global Ethical Finance Initiative, said:
“Today’s Earth Day Summit shows that the financial services sector has a fundamental role to play in delivering targets such as the Paris Agreement and the UN’s Sustainable Development Goal to fix our planet. However, despite its potential, the current financial system can be a cause, rather than a solution, to some of the pressing challenges our planet and its people currently face.
“Ethical Finance 2021 will show how financial services can support inclusive economic growth without depleting natural resources or leaving anyone behind. We’re very proud to have convened so many leading professionals from across the world, bringing them together virtually in Scotland to address the pressing issue of climate finance and turn talk into action.”
A new dawn for green bonds
This article originally appeared on the CharteredBanker.com blog at https://www.charteredbanker.com/resource_listing/cpd-resources/a-new-dawn-for-green-bonds.html
The green bonds market is expected to reach new highs this year after more than $200bn in green bonds and loans were issued in 2019 – a new global record.
Green bonds – also known as climate bonds – are fixed-income investments issued by governments and corporations as debt capital to fund climate and environmental projects.
“Green bonds are those where the proceeds raised are allocated to environmental projects or uses,” explained Simon Thompson, Chief Executive, Chartered Banker Institute. “They might be used to raise capital for a wide variety of purposes, including renewable energy projects, clean transport infrastructure, sustainable buildings, flood defences, or sustainable forestry and agriculture.”
The Climate Bonds Initiative – which promotes and tracks the green bond market internationally – reported in October that $202.2bn in green bonds and loans had been issued in 2019 – an all-time high for the green market.
The US issued the most bonds, followed by France, China, Germany, Netherlands and Sweden. Energy dominates overall use of proceeds at 33%, followed by low carbon buildings on 29%, low carbon transport 20%, water 9%, with waste and land use each at 3%.
Green trillions
In 2020, the initiative forecasts global annual green bond issuances to hit between $350-400bn. But to make a real impact, ‘green trillions’ is the goal.
“New sovereigns are entering the market and pioneers like France, Poland and Nigeria are now repeat green issuers,” said Sean Kidney, CEO and co-founder of the Climate Bonds Initiative.
“Bond size and diversity of issuers is increasing, and noteworthy is the presence of leading European and Chinese banks amongst the largest issuers.
“But $200bn or $400bn a year is not enough to address the climate emergency and provide the capital at the scale urgently required for large scale transition, adaptation and resilience.
“Generating that first $1tn in annual green investment by 2021/22 is now critical. It’s the benchmark from which to measure year on year growth in climate-based investment towards 2030.”
Critical role
In the UK, there are more than 100 green bonds from 16 countries listed on the London Stock Exchange, with the amount raised more than doubling since 2017 from $10.5bn to $26bn.
Globally, green bond issuance has climbed from $45bn in 2015 and $168bn in 2018.
The Institute’s Simon Thompson predicts that debt capital through green bonds will play an increasingly important role in financing the world’s shift to a low carbon economy.
“The scale of investment needed to finance the transition to a sustainable, low-carbon world – $6tn per year – will exceed both the capabilities of the post- financial crisis banking sector and the constrained balance sheets of utility companies,” Thompson said. “This is why the debt capital markets will be significant in facilitating the continued operation of existing projects via refinancing, and the development and construction of a wide range of new projects supporting climate change mitigation and adaptation.”
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.
Round Table: Path to COP26 - Financing a Green Future
The Ethical Finance Round Table ‘Path to COP26 – Financing a Green Future’ was held on Feb 27th at Baillie Gifford in Edinburgh. Following a short welcome, Omar Shaikh, GEFI Managing Director outlined GEFI’s plans for 2020:
- Path to COP26
- “Radical Old Idea”
- Ethical Finance Round Tables
- UNDP Finance for Nature Summit
- The SDG Tartan
- Internship programme
This was followed by short presentations from Jonathan Taylor, former Vice President of the European Investment Bank for Environment and Climate Action, and Gary Lapthorn, Head of Sustainability & Responsible Business, Commercial Banking at Lloyds Banking Group.
Jonathan Taylor outlined the history of climate change action, through initial scientific warnings, to the establishment of the United Nations Framework Convention on Climate Change (UNFCCC) at the Earth Summit in Rio in 1992, and the first landmark international treaty agreed at COP3 in Kyoto (1997). Experts from the International Panel on Climate Change (IPCC) then warned that, despite the Kyoto Protocol, global warming was still set to worsen, leading to the all countries agreeing at COP21 in Paris (2015) to a global framework designed to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.
Coming 5 years after COP21 and the Paris Agreement, COP26 in Glasgow event offers an opportunity to take stock of progress since Paris and update the Agreement where necessary. In particular, countries will present their plans and progress beyond current declared intentions, which IPCC calculate will lead to 2.6°C – 3.2°C temperature rises.
More attention than ever is focused on the role financial services can play in the fight against climate change, acting as an enabler and transition mechanism for policy, risk management and liquidity. There has been optimism around the UK’s leadership on climate-related regulation in finance, particularly through the Bank of England’s Taskforce on Climate-related Finance Disclosures (TCFD). Ensuring Glasgow is a success will require the right template to be in place for all parties to work and agree upon, and this can only happen with significant bilateral diplomatic efforts. The Global Commission on the Economy and Climate calculates that, while a lack of progress poses huge risks to the world economy, bold climate action could deliver at least $26 trillion in economic benefits through 2030.
Gary Lapthorn next outlined Lloyds Banking Group’s commitment to supporting the UK’s transition to a low-carbon economy through leadership in financing sustainability in businesses, homes, vehicle fleets, pensions, insurance and green bonds. One issue found at Lloyds was lack of knowledge and education. Many experienced financial professionals are keen to act and support the transition, but lack confidence in their ability to lead on environmental issues. To address this, Lloyds partnered with the Cambridge Institute for Sustainability Leadership to provide training.
Lloyds is making concrete commitments in terms of both its own operating emissions and those associated with its loan book. It has pledged to halve emissions associated with its loan book by 2030 and to cut operating emissions by 60% over the same timeframe and is currently ahead of schedule. It has also pledged to move to its energy consumption to being 100% derived from renewables and its vehicle fleet to 100% electric. In addition, Lloyds provides financing for a number of environmentally beneficial projects, such as £273m of direct funding for the worlds biggest offshore windfarm, Hornsea Project One.
The presentations from the two speakers were followed by a lively audience discussion, in which participants and speakers explored the practicalities of combatting emissions through finance. The discussion centred on:
- The extent to which financial institutions are making explicit trade-offs between profit and purpose – Lloyds are willing to accept slightly lower returns when companies agree to do the right thing
- Whether looser capital requirements can be used to encourage climate-related lending
- The role of innovation, and specifically financial innovation, in addressing environmental challenges
- Executive renumeration, and the extent to which commitments are enshrined in incentives for decision-makers
- Whether moves towards sustainability are making financial services an attractive career for graduates again, moving on from the “lost decade” experienced after the global financial crisis
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:
“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 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.
Round Table: Ethical Finance Market Update - Keynote Interviews
Baillie Gifford – EFH Roundtable
16 December 2019, 16:00 – 18:00
Ethical Finance Market Update, Market Trends
Interviewer: Gail Hurley
Panel Participants: Andrew Cave, Thom Kenrick
Summary:
In a change to the usual format this session, once again hosted by Baillie Gifford, comprised of two keynote interviews which provided reflections (from the investment and banking sector) on the evolution of the ethical finance market and how the market will adapt to on-going political, economic, social and environmental uncertainty.
The interviews were conducted by GEFI Senior Consultant Gail Hurley who has recently completed 10 years with the UN in New York as a Senior Advisor.
Gail framed the session within the context of growing interest in driving a fairer, more sustainable financial system and the fact that 2020 will be a significant year for climate issues in Scotland as it welcomes the world to Glasgow for COP26, the UN climate conference.
Andrew Cave, Head of Governance and Sustainability at Baillie Gifford, was first up and he argued that ethical investing has moved from niche to mainstream. While in the past companies would not put their best people and resources into it, today the situation is changing. According to Andrew the overall direction is positive and there is a lot of interest from institutional investors. Continuing challenges include: the complications in defining a positive impact (as the market is still in its early days) and the intractable debate over what constitutes positive social impact.
Andrew offered some fairly candid views on confusion around terminology highlighting the fundamental difference between ESG, which factors issues such as climate risk, data privacy issues and regulation into existing investment paradigms, and responsible investing, which is more directive and it aims to reach a particular outcome. It was suggested that clear rules need to be designed to avoid a risk of diverting money away from those who can make a positive contribution. Another challenge mentioned by Andrew was the lack of quality data on complex value chains. A full view of impact requires improvements in disclosure and standardisation of data, which enables more sophisticated discussions about potential transformations in transportation and production systems.
Thom Kenrick, from the RBS Sustainable Banking team, was next in line to be interviewed by Gail. Unsurprisingly, Thom began by highlighting the major changes that have taken place in the banking sector in recent years and how this has driven RBS’s journey of reform and restructure. The financial crisis fundamentally changed regulation as banks were placed under greater scrutiny by both regulators and wider stakeholders. Thom described the growing interest in ethical finance from RBS customers but pointed out that many still struggle with the lack of consistency in terminology and approaches. In relation to social finance Thom suggested that this means financial inclusion to one, diversity to another and divesting from a power station to someone else. Unlike environmental impact, there is not a right or wrong answer as so many different aspects of social life have no scientific base.
Thom felt that while international standards may help in providing consistency, he pointed out that while PRI (2005) and TCFD (2015) have been around for a number of years few signatories are genuinely delivering to the required standard. That said, according to Thom, the situation is changing as customers, investors and the public are increasingly scrutinising firms so whilst such standards are voluntary, the consequences of not following them risks deterring prospective / existing customers and investors.
Despite the challenges outlined throughout the session the discussion ended on a positive note. Younger generations are more conscious, and their demand is expected to drive ethical finance in the long term. Change takes time and previous developments in ethical finance, whether successful or not, will have played a part in shifting mind-sets and practices. Although nothing is yet set in stone leading market players, such as big Baillie Gifford and RBS, have established dedicated teams, products and services to raise awareness and drive finance for positive change.