Prince Charles: Banks are crucial to 'cracking' the climate crisis
Prince Charles has urged financial institutions to develop a "real understanding" of the influence they have to bring about a net-zero, resource-efficient economy, arguing that the sector has been "closed-minded" and slow to react in the past.
The Prince’s call to action was made at the enthronement of Emperor Naruhito in Japan this weekend, where he told The Evening Standard that banks and corporates must urgently set about divesting from fossil fuels and ploughing “trillions of pounds” into projects which preserve and restore nature.
Charles is notably the founder of the Corporate Leaders Group Europe and The Prince of Wales’ Corporate Leaders Group – bodies which aim to support business leadership for a “climate neutral” economy in the UK and abroad.
He told the Standard that the “countless seminars and workshops” held by these groups have been unable to “actually crack the real problem”, due to a “lack of the real understanding on the part of the financial services and capital markets sector to understand why there was such a need to invest”.
Charles acknowledged that the green finance sector has been booming in recent times, with changes in the policy and corporate sphere paving the way for “sustainable” investments to become profitable in both the short and the long-term. Indeed, Bloomberg New Energy Finance (BNEF) this month reported that global issuance of sustainable debt had surpassed $1trn for the first time.
However, the Prince said interest must now be expanded solely from clean energy and transport projects to cover reforestation, fishery and ocean restoration, regenerative agriculture and the creation of circular economies. On the latter, the world's largest asset management firm, BlackRock, recently launched its first investment fund dedicated to accelerating the global development of a circular economy.
Charles additionally emphasised the importance of collaboration in greening economies, adding: “The money is now at last beginning to become available… because there are trillions of pounds out there, particularly in the private sector which can now potentially be harnessed to drive real change. The key is the private sector, which has to lead, then you can create a partnership with the public sector.”
Charles’ call to action comes shortly after he partnered with the World Economic Forum (WEF) to launch the Sustainable Markets Council – an initiative which connects corporates, finance giants and policymakers in a shared goal to “transform our market mechanisms to work for, not against, sustainability”.
The Council’s work covers three areas: bringing about a shift in corporate business models, reorienting and mobilising finance and creating an “enabling” policy and cultural environment that incentivises action through regulation.
On the finance piece, the UN’s Climate Summit in New York this autumn saw 130 banks, representing one-third of the worldwide banking sector, commit to aligning their actions with the aims of the Paris Agreement. Since then, Bank of England’s Mark Carney has warned corporations that they will lose investment without thorough climate disclosures, and research from Reuters has found that several major North American banks are marking down their expectations for oil and gas prices that underpin loans.
Nonetheless, recent research from the World Resources Institute (WRI) revealed that less than half of the world’s largest banks have outlined commitments to invest more in renewable energy and less in fossil fuels. This lack of action led to Extinction Rebellion activists across the world targeting banks to call for a greener finance system during the group’s autumn uprising.
Green finance at edie’s Sustainability Leaders Forum
edie’s Sustainability Leaders Forum returns in 2020, as some of the biggest companies, individuals and organisations championing sustainability gather at the Business Design Centre on 4 & 5 February.
Green finance will be a key discussion point, with speakers including Green Finance Institute CEO Rhian Mari Thomas, M&G Investment's head of responsible investment and ESG Anita McBain and Aviva Investors' global head of governance Mirza Baig.
Other keynote speakers at this flagship, multi-award-winning event features include Mary Robinson, former President of Ireland; Rebecca Marmot, Unilever CSO; Tom Szaky, TerraCycle CEO and Gilbert Ghostine, Firmenich CEO. For details and to register visit:https://event.edie.net/forum/