Transforming financial sector’s core value system may be essential to 1.5C

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.

The Climate Innovation Summit panel, “The policy and finance conditions needed to meet climate and sustainable finance ambitions,” explored taxonomies, disclosure agreements, carbon taxes, and ensuring orderly and just transition. With vested interests and lack of political will named as obstacles to securing 1.5C, it may be necessary to challenge the very value system the financial industry is built upon.

The panel consisted of: Martin Spolc, Head of Capital Markets Union (CMU), DG Fisma, Nancy Saich, Chief Climate Change Advisor, EIB, Molly Scott-Cato, MEP, Mariana Mazzucato, UCL Professor, Founder of Institute for Innovation & Public Purpose, Vicki Plater, Director Growth and Public Services, NZ Treasury, and Sasja Beslik, Head of Group Sustainable Finance, Nordea.

The session sought to address the question: If we’re exceeding a 1.5C warming scenario, what policy and investment changes are needed to ensure we stay on track?

The combination of an EU green finance taxonomy, establishing common carbon benchmarks and fostering transparency in the financial sector will be the game changers that will shift capital flows towards the sustainable investments required to meet the Paris Agreement goals, according to Martin Spolc, Head of CMU, DG Fisma.

“The most important thing we can do is to establish clear signals for financial markets like setting a plan to phase out fossils fuels by ‘this’ date,” said Scott-Cato. “We need to ensure there’s an orderly transition… We create and then eliminate stranded assets in a sequential action.”

Saich discussed how the interlinkages between a host of environmental problems, referencing the recent IPCC, WWF and Oceans Conference reports*, create complexity that must be addressed to achieve sustainable finance.

She also stressed the need to “focus on the win-wins”—targeting measures that address several climate issues at once (such as mitigation, adaption, conservation, etc).

Mazzucato pointed to the idea of using taxes to reinvest in sustainable assets, and thereby incentisiving positive change. 

Beslik said: “86 per cent of the world’s capital is not invested in a sustainable way,” he said. Moreover, “100 companies are emitting 71 per cent of emissions… What do we need to discuss?” He emphasised that a sense of urgency needs to be brought to the forefront of policy discussions. 

The gravity of the policy challenge cannot be understimated and must secure the buy-in from the widest spectrum of society. Spolc added that this is not just about legislation but requires broad engagement that brings together public and private actors to define the way forward. Examples of successful collaboration include the EU Sustainable Finance expert groups. 

Beslik then asserted that we need to critically examine the value system and incentives currently driving the financial industry, calling for a social contract based on a new set of values—no longer privileging personal wealth but, instead, thinking of the generations to come and working towards a sustainable economy. 

Scott-Cato brought up the obstacles to achieving this kind of systemic change. “Politically it’s not simple, there are massive vested interests… the problem is political will,” she said. “Imagine if the EU had been able to agree on a carbon tax in 1992. Why did that not happen? Because you need agreement.”

How can we overcome these challenges?

Plater suggests persevering: “It’s about standing up for something that’s right, even if it’s uncomfortable and even if there are risks involved.”

Righteous action of this kind might best be exemplified by bottom-up activism, specifically, by the climate change lawsuits currently taking place around the world: Citizens vs. the government of the Netherlands, youth vs. the government of the United States, and more.

Scott-Cato also cited the #ExtinctionRebellion demonstrators as an example. Considering the increasing momentum behind grassroots climate movements, she remarked that, with regards to policymakers and politicians, “people are ready for us to be a lot more radical than we’re being.”

*The IPCC’s Special Report on Global Warming of 1.5˚C, in response to the decision of the 21st Conference of Parties of the United Nations Framework Convention on Climate Change;

The Progress Report of the Our Oceans Conference delivered in Bali on 29 and 30 October

The World Wildlife Fund’s Living Planet Report on species extinction

 

 
Location
Related Goal
Goal 10: Mainstream climate in financial markets
Articles you may be interested in
In The News
For cities to become climate-resilient, they need to invest in capability buil...

As cities grapple with transforming and adapting to meet...

For cities to become climate-resilient, they need to invest in capability building
In The News
EIT Climate-KIC signs declaration ‘EU Green Deal: from local to global’

All around the globe, cities and regions are driving...

EIT Climate-KIC signs declaration ‘EU Green Deal: from local to global’
In The News
EIT Climate-KIC organises first Festival of Circular Economy and Bioeconomy in...

Running from November 28 to December 2, the activities...

EIT Climate-KIC organises first Festival of Circular Economy and Bioeconomy in Santander
In The News
What does climate action look like for the Culture and Creative Sector Industr...

The Culture and Creative Sector Industries (CCSI) can play...

What does climate action look like for the Culture and Creative Sector Industries?
In The News
Collaboration and knowledge sharing is key to unlocking capital for climate ne...

In order to reach net zero by 2030, or...

Collaboration and knowledge sharing is key to unlocking capital for climate neutrality
In The News
Gipuzkoa shapes the green future with local actors

Gipuzkoa is taking action towards sustainability through collaboration with...

Gipuzkoa shapes the green future with local actors
In The News
How can we enable African climate innovation to thrive?  

Much of the discussion around COP27 this year has...

How can we enable African climate innovation to thrive?  
In The News
EIT Climate-KIC and partners publish recommendations to include systemic lands...

The European Green Deal represents a unique opportunity for...

EIT Climate-KIC and partners publish recommendations to include systemic landscape thinking into EU policies to achieve the Green Deal
In The News
The challenges of building a resilient farmers’ community in Africa

Audrey S-Darko is a researcher and a farmer from...

The challenges of building a resilient farmers’ community in Africa
In The News
EIT Climate-KIC joins business and civil society to call on governments to uph...

As the official COP27 outcomes are being drafted this...

EIT Climate-KIC joins business and civil society to call on governments to uphold commitments to 1.5
In The News
Climate innovation: “The purpose is people, everything else is just the mean...

Massamba Thioye is leading the UN climate change Global...

Climate innovation: “The purpose is people, everything else is just the means”
In The News
Become a European Climate Leader

The Climate-KIC International Foundation is looking for a Supervisory...

Become a European Climate Leader
In The News
EIT Climate-KIC launches open-access database to map start-up ecosystem, now w...

Climate start-ups supported by EIT Climate-KIC are now worth...

EIT Climate-KIC launches open-access database to map start-up ecosystem, now worth €11.8 billion in combined enterprise value
In The News
Slovenia higher education reform aims to create a supportive environment for s...

Slovenia’s ministry of higher education is gearing up for...

Slovenia higher education reform aims to create a supportive environment for students and teachers
In The News
Co-designing the future of coal regions

EIT Climate-KIC launches the Post Coal Future Lab initiative...

Co-designing the future of coal regions
In The News
Bringing in business is key to achieving systems transformation on the climate...

“What does it mean to enable businesses to deal...

Bringing in business is key to achieving systems transformation on the climate crisis
In The News
What will it take to build the New European Bauhaus?

“Beautiful, Sustainable, Together”. These are the values – and...

What will it take to build the New European Bauhaus?
In The News
EIT Climate-KIC selects five partners in Global South to implement gender main...

The intersection of climate and innovation remains a male-dominated...

EIT Climate-KIC selects five partners in Global South to implement gender mainstreaming into entrepreneurship
In The News
Citizens inspire a car-free Leuven

A broad survey, possible solutions displayed on screens, inspirational...

Citizens inspire a car-free Leuven
In The News
EIT Climate-KIC accelerates climate tech solutions for a net-zero Africa 

Climate-focused start-up teams in developing countries face distinct challenges...

EIT Climate-KIC accelerates climate tech solutions for a net-zero Africa 
In The News
New European Bauhaus Hackathons will reward most innovative solutions

EIT Community New European Bauhaus partners will be hosting...

New European Bauhaus Hackathons will reward most innovative solutions
In The News
Slovenia takes a pivotal turn towards circularity

Slovenia has decided to actively combat climate change by...

Slovenia takes a pivotal turn towards circularity
In The News
Innovative climate projects part of EIT Community New European Bauhaus initiat...

The European Institute of Innovation and Technology (EIT) has...

Innovative climate projects part of EIT Community New European Bauhaus initiative
In The News
A new air and climate plan for Milan

The City Council of Milan approved the Air and...

A new air and climate plan for Milan
In The News
Meet the three EIT Climate-KIC innovators nominated for EIT Awards

Three innovators from EIT Climate-KIC’s community have been nominated...

Meet the three EIT Climate-KIC innovators nominated for EIT Awards
In The News
100 European cities take up the challenge to become carbon neutral by 2030

On Monday 13 June, the representatives of the 100...

100 European cities take up the challenge to become carbon neutral by 2030
In The News
The role of cities and regions in transforming wood value chains

Climate smart forest economies It’s a crucial decade for...

The role of cities and regions in transforming wood value chains
In The News
Glasgow City Region pioneering forest economy innovation to drive climate acti...

Scotland’s largest city region is actively tackling climate change...

Glasgow City Region pioneering forest economy innovation to drive climate action
In The News
Forging sustainable timber construction in Europe

EIT Climate-KIC and Built by Nature, announce an initiative...

Forging sustainable timber construction in Europe
In The News
EIT Climate-KIC launches new Circularity Thinking training programme

EIT Climate-KIC is launching Circularity Thinking courses to tackle...

EIT Climate-KIC launches new Circularity Thinking training programme