Early next week, over 200 banks, insurers and investors from 51 countries will meet in Paris. You might assume it’s for a high-level World Economic Forum or G7 meeting, but you would be wrong. These investors, insurers and bankers are coming together as partners to voice their concern over the real risks that businesses and economies face as a result of climate change. We talked with the Co-Chair of this UNEP FI event, Mr. David Pitt-Watson, about what they are saying, and according to him, it comes down to three points:
- For sustained profitability, policy-makers must agree to a robust climate deal. That is why 377 investors representing 24 trillion dollars have signed a petition asking them to do so.
- The finance industry is trying to create channels through which money can flow to sustainable investment. Three years ago only $2 billion of green bonds were issued. This year it will be $70 billion. That is one of many initiatives which Pitt-Watson says is “not enough, but a good start”.
- Investors have influence as major shareholders, and are expressing increasingly loud voices on the risk of carbon in our investments.
Mr. Pitt-Watson sums it up this way: “It’s mainly up to the policy-makers and leaders of our countries to address the climate risks before us. That said, we represent a rapidly growing pool of financial expertise and capital, and we will not sit idly by while risk continues to build around our investment portfolios.” When asked about the upcoming Paris talks, he added: “we do not expect a complete solution, but we will be hoping that it gives a strong signal that we are on the way to addressing climate change”.
This is a very serious discussion, not just about climate risk but about financial risk.