What role can finance play in the green recovery? EIT Climate-KIC and UNEP Finance Initiative ask leading thinkers to weigh in

EIT Climate-KIC, in partnership with the UNEP Finance Initiative, is releasing Aligning finance for the net-zero economy: New ideas from leading thinkers, a series of papers that will contribute to the debate on how financial institutions can support a just transition to a net-zero emissions economy by 2050.

Stakeholders in financial markets, capital and investment are key players in tackling climate change, supporting solutions for climate adaptation, and reducing global greenhouse gas emissions. But to enable our economy and society’s transition to net-zero, finance requires a fundamental overhaul. Financial portfolios, for instance, need to align with a well below 2-degrees emissions pathway, incentivising green growth, sustainable development, and systems transformation.

Produced and supported by EIT Climate-KIC, in partnership with UNEP Finance Initiative (UNEP FI), the series
Aligning finance for the net-zero economy: New ideas from leading thinkers aims to inspire financial actors to move from climate risk disclosure to alignment. The series delves into current assumptions around alignment with climate frameworks such as the Paris Agreement and the UN Sustainable Development Goals, and develops ideas for how alignment can best be achieved.

“EIT Climate-KIC has supported innovation to mainstream climate in financial markets, democratise climate risk information, and foster bankable green assets for ten years,” says Kirsten Dunlop, CEO of EIT Climate-KIC. “We are committed to the transformation of core finance to deliver a regenerative, low-emissions economy and sustainable society. Against the backdrop of economic crisis, the inexorable onset of climate emergency and geopolitical fragmentation, financial institutions have an unprecedented opportunity and a responsibility to provide the leadership, investment stimulus and risk mitigation needed for transformation. We are honoured to partner with UNEP FI to provide food for thought as to why and how this might be done.”

The first paper of the series, Achieving Alignment in Finance , is authored by Dr Ben Caldecott, founding Director of the Oxford Sustainable Finance Programme and an Associate Professor at the University of Oxford. It examines how financial institutions can move beyond climate risk management towards much closer alignment with climate outcomes. “We cannot ever hope to align finance and the financial system with climate change objectives if we just focus on a narrow interpretation of climate risk management,” says Dr. Ben Caldecott. “We need specific ways of contributing to the challenge of climate alignment. These need to be articulated, developed and scaled across the financial system rapidly. My paper is one attempt to try and rebalance the conversation.”

The second paper, Transformations Required for 1.5°C Alignment and Global Sustainability,  is written by Dennis Pamlin, founder and CEO of 21st Century Frontiers and Senior Adviser to the Research Institutes of Sweden. Pamlin, who is also a member of EIT Climate-KIC Advisory Council, discusses the transformations that are needed in the global economy and the finance sector to meet the Paris Agreement objectives, as well as the opportunities that these transformations represent for both sectors.

“For almost 20 years, climate discussions have been focused on a ‘problem perspective’, i.e. cost-efficient incremental improvement in existing systems. With IPCC’s 1.5°C report and the Low-Energy-Demand (LED) pathway, the world was given the first innovation-driven pathway that also focused on global sustainability,” says Pamlin. “The COVID-19 crisis demonstrated that we are capable of significant changes and that many solutions are ready to be implemented. Hopefully, my paper can support the shift from an incremental problem perspective towards a transformative solution perspective where financial institutions focus on measurable results that are compatible with a 1.5°C LED pathway.”

The first two papers were launched during a webinar on 2nd September 2020.

In addition to discussing the economic system transformation required to deliver the Paris Agreement, the series will provide answers on how our response to the COVID-19 pandemic informs the response to climate change, and what pathways are available for financial institutions and the financial system to ‘build back better’ and drive the necessary transition to a net zero-carbon economy.

“UNEP FI is supporting financial institutions to deliver low-carbon, fairer, and more resilient global economies,” said Eric Usher, Head of UNEP FI. “Currently, 38 banking members have committed to deliver the goals of the Paris Climate Agreement and we are co-convening 28 asset owners representing nearly $ 5 trillion who aim to decarbonise their investment portfolios by 2050. This series of thought leadership papers convenes innovators and industry experts to provoke discussion, challenge the status quo and guide the transformation of business and finance towards a sustainable future.”

John Elkington and Richard Roberts from London-based change agency Volans, as well as Jakob Thomä, Managing Director at 2° Investing Initiative, will also participate in the series with papers published later this year on EIT Climate-KIC’s website.

 
Location
Related Goal
Goal 10: Mainstream climate in financial markets
Articles you may be interested in
In The News
Biden’s Opportunity for Reinventing Climate Innovation

Joe Biden will be sworn in today as 46th...

Biden’s Opportunity for Reinventing Climate Innovation
In The News
EIT Climate-KIC’s Open Accelerator: collaboration, not competition

It is no secret that to tackle climate change...

EIT Climate-KIC’s Open Accelerator: collaboration, not competition
In The News
New platform inspires sustainable Nordic wood construction

This week marks the launch of NoMuWood.com, an EIT...

New platform inspires sustainable Nordic wood construction
In The News
European Union launches Pact to support citizen-led climate action

On Wednesday 16 December, the European Commission is launching...

European Union launches Pact to support citizen-led climate action
In The News
“An avalanche of hope and energy”: The power of Paris

Our Climate Champions 2020: Melissa Capcha. Five years on...

“An avalanche of hope and energy”: The power of Paris
In The News
“Let’s find ways to take action within our abilities”

Our Climate Champions 2020: Gopal Kumar Mohoto. Five years...

“Let’s find ways to take action within our abilities”
In The News
“Climate change is outpacing us, there is no time for excuses”

Our Climate Champions 2020: Cristina Aleixendri Muñoz. Five years...

“Climate change is outpacing us, there is no time for excuses”
In The News
COP26 gives Scotland “a platform to showcase… what’s possible”

Our Climate Champions 2020: Kit England. Five years on...

COP26 gives Scotland “a platform to showcase… what’s possible”
In The News
COP26 might be postponed but “climate action cannot wait”

Our Climate Champions 2020: Melani Furlan. Five years on...

COP26 might be postponed but “climate action cannot wait”
In The News
A climate service for flood risk mapping in urban areas

The SaferPlaces project, supported by EIT Climate-KIC, has created...

A climate service for flood risk mapping in urban areas
In The News
Raising climate awareness through art in the Glasgow City Region

The Glasgow City Region uses arts as a means...

Raising climate awareness through art in the Glasgow City Region
In The News
Helping Europe achieve a circular economy transition

EIT Climate-KIC, EIT RawMaterials, EIT Digital, EIT Food, EIT...

Helping Europe achieve a circular economy transition
In The News
EIT Climate-KIC and EASME host WCEF event on circular economy

The World Circular Economy Forum brings together business leaders,...

EIT Climate-KIC and EASME host WCEF event on circular economy
In The News
Citizens across globe eager to contribute to a post-COVID recovery

Over 4,500 citizens from around the world will join...

Citizens across globe eager to contribute to a post-COVID recovery
In The News
Transformative climate action and COP26: Join our webinar

Are you working to deliver transformative change for a...

Transformative climate action and COP26: Join our webinar
In The News
Madrid, Amsterdam and Milan: Three cities putting citizen participation at the...

The Extinction Rebellion or Fridays for Future global actions...

Madrid, Amsterdam and Milan: Three cities putting citizen participation at the heart of climate action
In The News
EIT Climate-KIC selected to become a member of the European Circular Economy S...

EIT Climate-KIC circular economy expert, Cliona Howie, will join...

EIT Climate-KIC selected to become a member of the European Circular Economy Stakeholder Platform
In The News
Partnering with EIT Climate-KIC on the New Accelerator: Call for Expressions o...

We are looking for new and existing EIT Climate-KIC...

Partnering with EIT Climate-KIC on the New Accelerator: Call for Expressions of Interest
In The News
EIT Climate-KIC leads collective efforts to accelerate Madrid’s transition t...

A cross- KIC (Knowledge and Innovation Community) initiative is...

EIT Climate-KIC leads collective efforts to accelerate Madrid’s transition towards carbon neutrality
In The News
The Human Capital project is the EU educational sector’s answer to robots ta...

Supported by the European Institute of Technology (EIT) and...

The Human Capital project is the EU educational sector’s answer to robots taking over jobs—and AI has a role to play
In The News
New online magazine Branch explores the sustainability of the internet

This week saw the launch of Branch magazine, a...

New online magazine Branch explores the sustainability of the internet
In The News
Four EIT Climate-KIC innovators nominated for EIT Awards

Four EIT Climate-KIC innovators have been nominated to win...

Four EIT Climate-KIC innovators nominated for EIT Awards
In The News
EIT Climate-KIC selected to advise European Commission on sustainable finance

The newly created EU Platform on Sustainable Finance brings...

EIT Climate-KIC selected to advise European Commission on sustainable finance
In The News
bound4blue’s innovative wingsail technology gathers recognition across Europe

Cristina Aleixendri, Co-founder and COO of the Spanish start-up...

bound4blue’s innovative wingsail technology gathers recognition across Europe
In The News
EIT Climate-KIC and Glasgow City Region join forces, helping the region innova...

Home to one third of Scotland’s population and provider...

EIT Climate-KIC and Glasgow City Region join forces, helping the region innovate to become climate resilient
In The News
Cassetex from Bangladesh, Sosei from Uruguay and Carbon Craft Design from Indi...

More than 3,000 entrepreneurs from 56 countries participated in...

Cassetex from Bangladesh, Sosei from Uruguay and Carbon Craft Design from India win the seventh edition of ClimateLaunchpad
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 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 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