“The financial sector believes that climate change can be limited to 2 degrees Celsius.” During an event posing the question “is the financial sector a friend or foe in addressing the climate crisis” Eric Usher from the UN Environment Programme Finance Initiative (UNEP-FI) delivered this upbeat and optimistic message.
Mr. Usher stressed that, since 2015, the tide has turned and substantial commitments to support sustainability have been made by the insurance, investment, and banking sectors. The UK Climate Bonds Initiative, the Principles for Responsible Investment and the UN Climate Summit were all flagged as positive achievements. Mr. Usher’s message was echoed by CIRDI’s Jaime Webbe who shared success stories on green bonds and UBC’s own divestment efforts to illustrate that markets support green growth.
The event did focus on challenges as well. The Principles for Responsible Banking, launched under the leadership of UNEP-FI last September, now boasts members responsible for a third of all global banking assets. Yet only four Canadian banks have joined the initiative with others concerned about how responsible banking aligns with Canada’s natural resource-based economy. Likewise, participants pointed out that projects with significant negative social and environmental impacts are still attracting large investments.
There is more work to be done to bring financial regulators into the policy arena and to ensure that leaders such as the Net-Zero Asset Owner Alliance realize ambitions aligned with the Paris Agreement. However, the event demonstrated that the scene is set to support action.