Earth Day 50 – Sustainable finance: the road ahead
Transcript of the keynote speech delivered by Nick Robins on 20 April 2020 as part of Earth Day Week
As the world grapples with the coronavirus crisis, urgent action is required from all parts of the financial system, not just in the immediate health and economic emergency, but in the recovery that follows.
In this speech Nick Robins argues that we have a lot to build upon – but a long way still to go. He asks how we should reset sustainable finance in the decade to 2030, when carbon emissions will need to be halved and the Sustainable Development Goals implemented in full, and suggests five priorities:
- Finance needs to be green. By 2030, all financial institutions and regulators will need to be taking action to achieve alignment with net zero.
- Finance needs to be just. By 2030, all financial institutions and regulators will need to show how they are delivering positive social impact, eliminating poverty and reducing inequality.
- Finance needs to be resilient. By 2030, all financial institutions and regulators will need to have strategies for resilience, ensuring that they help both users and vulnerable communities to bounce back.
- Finance needs to be rooted. By 2030, all finance institutions and regulators will need to demonstrate how they are responding to place-based needs, including via new instruments and institutions rooted in local realities.
- Finance needs to be responsive. By 2030, all financial institutions and regulators will need to be responsive to over 8 billion individuals and many more institutions, notably the small businesses that prop up the global economy. This includes providing the financial products that meet people’s aspirations for a better world.
In practice, this means:
- Recovery plans must be designed and delivered to be consistent with the Paris Agreement. Any support for high-carbon sectors must be contingent on measurable net-zero emissions plans, with programmes for involving workers and communities in their design and delivery.
- A sizeable proportion of recovery spending, considerably above the levels seen in 2009–2010, should be directed to sustainable growth. A wealth of options exists, including renewable energy and energy storage, making buildings more efficient, public transport, as well as land use, climate adaptation and nature-based solutions. Many of these are cheaper and more ‘shovel-ready’ than a decade ago.
- The recovery packages should promote a coordinated multilateral response through the UN and the G20. Special attention should be given to the needs of developing economies, where coronavirus impacts are set to be most severe and capital for the transition is in shortest supply. We could meet and exceed the longstanding pledge for $100 billion in annual North–South flows in climate finance. And we could make COP26 in 2021 the place where sustainable recovery plans are shared, upgraded and coordinated.
Nick Robins concludes by quoting John Maynard Keynes and saying, “So let us be bold, be open, experiment, take action, try the possibility of things so that sustainable finance becomes the norm – so that by Earth Day 60 in 2030, finance has helped to build a regenerated Earth.”