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
Global call for transformative solutions to tackle the climate emergency

EIT Climate-KIC launches Climathon Global Awards and Healthy, Clean...

Global call for transformative solutions to tackle the climate emergency
In The News
EIT Climate-KIC innovators celebrated at 2019 EIT Awards

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

EIT Climate-KIC innovators celebrated at 2019 EIT Awards
Opinion
Part three: Climate action #NotinNewYork
Andy Kerr Director, UK & Ireland, EIT Climate-KIC
Part three: Climate action #NotinNewYork
In Detail
New EIT Climate-KIC supported report finds digital technologies can vastly a...

As part of the UN Climate Action Summit, the Global Enabling Sustainability Initiative (GeSI) and Deloitte launched a report today, supported by EIT Climate-KIC,...

New EIT Climate-KIC supported report finds digital technologies can vastly accelerate the SDGs
Opinion
Part two: Climate action #NotinNewYork
Andy Kerr Director, UK & Ireland, EIT Climate-KIC
Part two: Climate action #NotinNewYork
Opinion
Climate action #NotinNewYork
Andy Kerr Director, UK & Ireland, EIT Climate-KIC
Climate action #NotinNewYork
In The News
Circular Cars Initiative launched at United Nations Climate Action Summit

On the occasion of the United Nations Climate Action...

Circular Cars Initiative launched at United Nations Climate Action Summit
In The News
We’re closing for business in solidarity with #ClimateStrike

EIT Climate-KIC will close this Friday 20 September, the...

We’re closing for business in solidarity with #ClimateStrike
In The News
Open Innovation Call targeting air quality and urban heat island effect launch...

The City of Copenhagen’s department Resilient and Sustainable City Solutions within...

Open Innovation Call targeting air quality and urban heat island effect launched
In The News
EIT Climate-KIC cleantech start-up ZOLAR attracts 10 Million Euro Investment

The Berlin-based start-up Zolar raises a 10 million EUR...

EIT Climate-KIC cleantech start-up ZOLAR attracts 10 Million Euro Investment
In The News
Breaking down barriers to climate-finance: the City Finance Lab launches secon...

Competition for the five most innovative financing solutions for...

Breaking down barriers to climate-finance: the City Finance Lab launches second call for proposals
Opinion
Innovating in complexity: Systemic investing
Dominic Hofstetter Transformation Capital, EIT Climate-KIC
Innovating in complexity: Systemic investing
In The News
Climathon onboard ‘Sail to the COP’

On 2 October, 36 young climate change agents will...

Climathon onboard ‘Sail to the COP’
In The News
Research reveals surprising link between socio-economic indicators and sustain...

A new study by EIT Climate-KIC partner academic institutions...

Research reveals surprising link between socio-economic indicators and sustainability transition
Opinion
Transformation capital: A new investment logic for catalysing systems change
Dominic Hofstetter Transformation Capital, EIT Climate-KIC
Transformation capital: A new investment logic for catalysing systems change
Opinion
Innovating in complexity: From single-point solutions to directional systems innovation
Dominic Hofstetter TRANSFORMATION CAPITAL, EIT CLIMATE-KIC
Innovating in complexity: From single-point solutions to directional systems innovation
In The News
Four EIT Climate-KIC innovators nominated for annual EIT Awards

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

Four EIT Climate-KIC innovators nominated for annual EIT Awards
In Detail
Report offers recommendations for development of agricultural impact tool

A new report supported by EIT Climate-KIC’s CSA Booster programme proposes technical, governance and business arrangements for the development of a new tool for...

Report offers recommendations for development of agricultural impact tool
In Detail
Food value chains strategy report offers recommendations based on systemic i...

A new report details the work of EIT Climate-KIC and its partner Metabolic, a consulting company using systems thinking to tackle major sustainability challenges,...

Food value chains strategy report offers recommendations based on systemic impact
In The News
EIT Climate-KIC supports digital roadmap for a circular economy

EIT Climate-KIC, along with several European stakeholders, is advocating...

EIT Climate-KIC supports digital roadmap for a circular economy
In The News
EIT Climate-KIC urges London to lead in turning climate emergency into action

Climate innovation agency EIT Climate-KIC welcomed today the first...

EIT Climate-KIC urges London to lead in turning climate emergency into action
Opinion
London Climate Action Week: Climate Innovation Insights
London Climate Action Week: Climate Innovation Insights
Opinion
How can we deliver a net-zero emissions UK?
Andy Kerr Director, UK & Ireland, EIT Climate-KIC
How can we deliver a net-zero emissions UK?
Opinion
Can we identify the tipping points for transformative climate action?
Susannah Fisher Strategic Research Lead, EIT Climate-KIC
Can we identify the tipping points for transformative climate action?
In The News
Study launched on decarbonising Europe’s heavy industries by 2050

Industry representatives, regional experts, academics and EU officials held...

Study launched on decarbonising Europe’s heavy industries by 2050
In our community
Interview with Yvon Slingenberg of DG Climate Action, European Commission
Interview with Yvon Slingenberg of DG Climate Action, European Commission
In Detail
Evaluating the benefits of improved cooking solutions: impact data in high r...

Gold Standard today released a research study by Vivid Economics that estimates the economic value of Gold Standard-certified project benefits related to climate, health,...

Evaluating the benefits of improved cooking solutions: impact data in high resolution
In The News
New EIT Climate-KIC supported report proposes basis for a future EU taxonomy i...

The European Commission has welcomed the publication of the...

New EIT Climate-KIC supported report proposes basis for a future EU taxonomy in legislation
In The News
WCEF 2019: The challenges and potentials of circular procurement in cities

Increasing population growth and urbanisation intensifies the pressure on...

WCEF 2019: The challenges and potentials of circular procurement in cities
In The News
First round of 15 winners of Reinventing Cities competition announced

C40 Cities and EIT Climate-KIC have announced 15 winners...

First round of 15 winners of Reinventing Cities competition announced