Could ambitious financial regulation be a key driver of climate action?

With the carbon costs of travel in mind, Climate Innovation Summit session summaries are available online for those who cannot attendand for review for those present. These summaries aim to extract the key debates, dialogues, and learnings from each #MissionFinance session.

Richard Bruton, Minister for Communications, Climate Action and the Environment, Government of Ireland, delivered a keynote—“Mission Finance and the UN Financial Centres for Sustainability—What does being a transformative green centre mean?”—preceding a panel on sustainable finance at the Climate Innovation Summit, and described Ireland’s ambition to “move from a follower to a leader” of climate action.

For this transition to be successful, he emphasised, there needs to be a shift in mindset as well as action and collaboration at both the public and the private level:

“It requires a revolution in how we live, if we are to meet this challenge. We need, at a political level, growing consensus and, at a financial level, change in the investments we make and how they are to be funded. It is my intention that we use a new approach in the Irish government and face this challenge.”

He cited global mobilisation on financial solutions following the Great Recession of 2007-2009 as an example and urged that we have the same decisive approach on climate finance.

Ireland faces its own specific climate challenges, for example, its housing stock uses 58 per cent more energy than the rest of Europe and €50 billion is needed in the next 20 years to make Irish housing energy efficient. The Irish government has less than five billion to contribute.

Bruton stressed that innovative thinking, as exemplified by EIT Climate-KIC’s work with its partners, is needed to make this transition happen: “Sustainable financial innovation has global paybacks. Most of all, the government needs creative funding as well.”

He continued: “We have built a city that isn’t low in its carbon patterns, we need to shift that and look at each sector and raise our ambitions. How quickly can we roll out electric vehicles? Etc.”

On the other hand, Bruton identified a growing appetite for green finance, stating that the first Irish green bond was just launched and it was many times oversubscribed.

Bruton hopes that policymakers will follow suit, persuaded by compelling proof-of-concepts: “How do we get a return to evidence based policy thinking?… The onus is back on us to have new projects to show how we can deliver results.”

With that, the panel discussion, “Unlocking the Trillons,” was introduced. The speakers were: Nick Robins, Co-Director, UN International Network of Financial Centres for Sustainability, Teresa O’Flynn, Global Head of BlackRock Real Assets Sustainable Investing, Pierre Ducret, Board member Finance for Tomorrow, Co-Chairman UN FC4S and Chairman I4CE, Antoni Ballabriga, Chairman, European Banking Federation Working Group on Sustainable Finance, Stephane Boujnah, CEO and Chairman of Euronext, Emil Stigsgaard Fuglsang, Co-founder & COO, Matter, and Pierre Rousseau, Strategic advisor for Sustainable Business, BNP Paribas.

O’Flynn began with an interesting insight into BlackRock’s particular approach, which aligns climate ambition with the lowest cost capital available: Institutional capital.

“BlackRock has built up one of the largest private level investment vehicles for the renewables market. Cash flows are driven by the sun shining and the wind blowing, not by what’s happening in stock markets, which is big advantage,” she said.

O’Flynn described the problem space, saying buildings account for 20-30 per cent of emissions and 60 per cent of buildings we have today will be here in 2020. New buildings must be energy efficient and retrofitting is more difficult to do, she cautioned.

Rousseau advocated for a broad approach: “I think sustainability is about the whole financial system, not just green bonds. Sustainability will drive the change. Because we have long-term investments, we have to accelerate the process of capital markets, not only green bonds. Circular economy is the economy of tomorrow.”

He continued, “Personal finance is important because every human will want an electric car, solar panels, etc. Personal finance in terms of risk is interesting for a bank; they can spread credit risk… We need to engage every single citizen and we need to create products for the single individual. Regulators must allow for this. This is happening in China.”

This point dovetailed nicely into Stigsgaard’s work with Matter. The startup works with pensions and sustainability. Considering 40-50 per cent of stocks in the world are owned by pensions, the opportunity is massive.

“We’re trying to connect people to their pensions. Aligned with pension companies, we create a pension fund and show people the impact of their money. Our approach is about divestment and inclusion,” said Stigsgaard.

He continued, “Look for innovation in bottom up initiatives. They are fuelled by regulatory possibilities.”

Ducret affirmed this point and said that we will need new regulations to accelerate the greening of the whole finance industry. When we talk about top-down regulation, he said, it creates a huge debate. Yet, Ducret hopes for—and can conceive of—accelerated action coming from regulators.

“The climate issue is on the table and it’s going to increase in the coming years,” he said.

Stigsgaard provided an example of how these regulations might look: “How about rules requiring all issuers of savings products to disclose climate impact?” He left the audience to ponder a compelling point—that we’ve seen strict EU data protection regulations with GDPR, so why can’t we implement environmental regulations with the same level of ambition?

 
Location
Ireland
Related Goal
Goal 10: Mainstream climate in financial markets
Articles you may be interested in
In Detail
How should Europe approach AI in the strategic areas of climate, health, man...

A new report – Digital Transformation of European Industry: A Policy Perspective – addresses the important topic of how Europe should deal with Artificial...

How should Europe approach AI in the strategic areas of climate, health, manufacturing and mobility?
In The News
World’s biggest green business ideas competition now fully digital, free and...

The three-day Grand Global Final of the EIT Climate-KIC supported...

World’s biggest green business ideas competition now fully digital, free and accessible to all
In Detail
IIPP report for EIT Climate-KIC’s Resilient Regions Deep Demonstration pro...

EIT Climate-KIC partner the UCL Institute for Innovation and Public Purpose (IIPP), has published the “Resilient Regions Reconnaissance Report,” part of an eight-part series...

IIPP report for EIT Climate-KIC’s Resilient Regions Deep Demonstration proposes new economic paradigms to boost resilience
In The News
Three cities building back better: Madrid, Milan and Amsterdam

EIT Climate-KIC will host a session at the 18th...

Three cities building back better: Madrid, Milan and Amsterdam
In The News
EIT Climate-KIC to work with Google on Impact Challenge

EIT Climate-KIC is delighted to announce that it will...

EIT Climate-KIC to work with Google on Impact Challenge
In Detail
EIT Climate-KIC’s case studies on innovative land use set the stage fo...

EIT Climate-KIC launches ‘Innovations in land use,’ a collection of case studies demonstrating the organisation’s innovation-led, systemic approach that’s poised to help Europe deliver...

EIT Climate-KIC’s case studies on innovative land use set the stage for transforming whole systems
In The News
What role can finance play in the green recovery? EIT Climate-KIC and UNEP Fin...

EIT Climate-KIC, in partnership with the UNEP Finance Initiative,...

What role can finance play in the green recovery? EIT Climate-KIC and UNEP Finance Initiative ask leading thinkers to weigh in
In The News
EIT Climate-KIC supports European green recovery with €4 million for start-u...

EIT Climate-KIC is investing €4 million in nine climate...

EIT Climate-KIC supports European green recovery with €4 million for start-ups affected by COVID-19
Opinion
How public servants can engage unlikely allies to deliver climate policies
Juan Azcarate Deputy director of Energy and Climate Change, Madrid City Council
How public servants can engage unlikely allies to deliver climate policies
In The News
The City Finance Lab calls on urban leaders to help build back better

Organised by sustainability expert South Pole, the competition for...

The City Finance Lab calls on urban leaders to help build back better
In The News
EIT Climate-KIC supported cities – Leuven, Milan, Valencia and Vienna no...

Twelve cities are in the final stage of the...

EIT Climate-KIC supported cities – Leuven, Milan, Valencia and Vienna nominated as European Capital of Innovation 2020
Opinion
Going beyond investments in single-point solutions, an Opinion by Kirsten Dunlop
Kirsten Dunlop CEO, EIT Climate-KIC
Going beyond investments in single-point solutions, an Opinion by Kirsten Dunlop
In The News
The climate emergency demands bold policy innovations – can cities d...

While the challenges of climate change and a global...

The climate emergency demands bold policy innovations – can cities deliver? 
In The News
EIT Climate-KIC joins circular economy side event at UN High Level Political F...

“Bold leaders are needed to drive a collaborative approach...

EIT Climate-KIC joins circular economy side event at UN High Level Political Forum on Sustainable Development
In The News
EIT Climate-KIC and Silesian Metropolis join forces to transform Europe’s la...

EIT Climate-KIC and the Metropolitan Association of Upper Silesia...

EIT Climate-KIC and Silesian Metropolis join forces to transform Europe’s largest coal region in the face of the climate crisis
In The News
Anders Wijkman represents EIT Climate-KIC at the International Society for the...

Speaking online at the inaugural Conference of IS4CE—the International...

Anders Wijkman represents EIT Climate-KIC at the International Society for the Circular Economy Conference
In The News
EIT Climate-KIC receives €8.4 million for innovation projects that stimulate...

Eleven climate innovation projects across Europe tackling COVID-19 related...

EIT Climate-KIC receives €8.4 million for innovation projects that stimulate job creation and support a post COVID-19 green recovery
In The News
CEO Kirsten Dunlop represents EIT Climate-KIC at Climate Policy Forum

On 25 June, EIT Climate-KIC attended the Climate Policy...

CEO Kirsten Dunlop represents EIT Climate-KIC at Climate Policy Forum
In Detail
A net zero future offers significant opportunities for the European economy,...

EIT Climate-KIC’s views on the EU 2030 Climate Target Plan.  The recent announcements from the European Commission on the EU Recovery Plan from the...

A net zero future offers significant opportunities for the European economy, society and citizens
In The News
EIT Climate-KIC supported LOOP-Ports project wins prestigious sustainability a...

The LOOP-Ports project, led by the Fundación Valenciaport  and funded by EIT Climate-KIC,...

EIT Climate-KIC supported LOOP-Ports project wins prestigious sustainability award
In The News
EIT Climate KIC joins roundtable as Republic of Korea moves Green Deal forward

On 24 June, EIT Climate-KIC attended the 7th Green...

EIT Climate KIC joins roundtable as Republic of Korea moves Green Deal forward
In our community
Water scarcity in Southern Europe: Manufacturing expert insights
Water scarcity in Southern Europe: Manufacturing expert insights
Opinion
A scientist’s opinion: Interview with Cliona Howie Del Rio about systems thinking
A scientist’s opinion: Interview with Cliona Howie Del Rio about systems thinking
In Detail
Citizen activation is essential for Europe to meet its climate ambition

EIT Climate-KIC provides ideas for action under the European Climate Pact. The debate on how to achieve ambitious climate targets is often dominated by...

Citizen activation is essential for Europe to meet its climate ambition
In The News
EIT Climate-KIC shines at the GLF Bonn Digital Conference, the year’s la...

EIT Climate-KIC’s Director of Sustainable Land Use and member...

EIT Climate-KIC shines at the GLF Bonn Digital Conference, the year’s largest global digital conference on the environment
In The News
EIT Climate-KIC supported Climeworks raises over €67 million to expand its c...

Climeworks, the world leader in capturing CO2 from air,...

EIT Climate-KIC supported Climeworks raises over €67 million to expand its carbon dioxide removal capacities
In The News
EIT Climate-KIC supported Zeleros raises €7 million for the development of h...

EIT Climate-KIC supported Zeleros Hyperloop has completed a financing...

EIT Climate-KIC supported Zeleros raises €7 million for the development of hyperloop in Europe
In our community
A just transformation for Rugeley, as the power station comes down
A just transformation for Rugeley, as the power station comes down
In Detail
Challenging paradigms as the gateway to innovation: New IIPP report for EIT ...

EIT Climate-KIC partner the UCL Institute for Innovation and Public Purpose (IIPP), which works on changing how public value is imagined, practiced and evaluated...

Challenging paradigms as the gateway to innovation: New IIPP report for EIT Climate-KIC’s Landscapes as Carbon Sinks Deep Demonstration
In our community
Water scarcity in Southern Europe: Raw materials expert insights
Water scarcity in Southern Europe: Raw materials expert insights