Reframing perspectives on climate change

Where should investors be putting their money to make a real impact when it comes to climate change? And how should businesses react? Shifting the perspective from risk to opportunity can create an unexpected leverage point that could present the answer.

The plenary session on the second day of the Climate Innovation Summit in Dublin put climate change impact at the heart of financial discussions. Dennis Pamlin, Senior Advisor at Research Institutes Sweden (RISE), and Andrew Parry, Head of Sustainable Investment at Hermes Investment Management shared their forward-looking perspectives on how to reframe our current understanding of climate change, and how to foster discourse that speaks the language of investors.

Facilitated by EIT Climate-KIC advisor to the EU Sustainable Finance Technical Expert Group Sandrine Dixson-Declève, the speakers set the frame by emphasising how we tend to treat climate change as an environmental issue; as a risk matter on the side, as nothing more than CSR:

“It gets grouped into the weakest department of the company and comes in as the last part of discussion, often grouped together with other environmental issues. But it’s not. Climate change is an existential threat, yet 99 per cent of society do not frame it as such,” Dennis Pamlin said.

Andrew Parry followed up on this statement by linking it to an investment perspective:

“We need to rethink impact to encourage the creation of impact-enabled business models. Not as a linear way of solving problems but by putting impact at the heart of business models. Everyone talks about ESG but that is so 1990s. You must instead start to think about sustainability. It is forward-looking. Don’t think about the portfolio but rather about the components of the portfolio

He continued: “For people coming into the field, there are a lot of acronyms and differing opinions. It’s messy and complicated. This is challenging for finance and investment-orientated people who are used to looking at an index.”

Both speakers agreed that the current climate change benchmark tends to be rooted in the structure of the past:

“The need for reduced emissions is often based on an assumption that the current system is the one we should have. We talk about how we can reduce emissions and how to set reduction-based emission targets in the existing system. Often that does not help us create the tomorrow that we want. Most current frameworks are based on yesterday’s world, for instance, reporting systems. We are still asking the big polluters to take small steps,” Pamlin explained.

In the context of pension fund investments and the challenges of sustainability versus current structure, Andrew Parry shared the following perspective:

“They blame it on QE. It is hard for pension funds to integrate sustainable investments because they have to reach their 4 per cent inflation rate. Why are pension funds not doing more? Because they are constrained by the current structures in place, so they have to make a minimum return.”

By reframing our current narrative about climate change and situating it in a context of opportunity rather than risk, it can become something that increases human well-being rather than coming at the expense of it.

“Climate change is perceived as stopping something, not creating it. But there has been a dramatic change in costs for key environmental technologies and new transparency tools are now possible. The Overton window is moving very fast. Being rational is being stupid, it is being short-sighted and looking back,” said Pamlin.

So how do we advance the discussion and translate words into action? And how do we incorporate the business perspective?

“We need to reframe the question about how we interact with companies. If you frame sustainability and climate change as fear, you lose them. It must be framed in terms of how we make money. SDGs are a way of reframing the conversation. Make it context-based. Frame it in terms of a better way to invest and disclose,” said Parry.

Pamlin followed up with his perspective:

“We must be much bolder and reach out to those who have not been part of the discussion before. There is no silver bullet to this. We must bring in a broader focus and let the ideas flourish. We should have at least five scenarios that are possible, not just one to bring us forward. It should be on the front page, in the legal pages and on the finance pages.”

In conclusion, both speakers shared their final remarks on how to keep on progressing:

“Doing more with less will only create incremental solutions. We must rethink the entire process. Everyone is a part of this transition, all hands on deck, we need that. Many of the people that are good at talking are not necessarily good at action”, said Pamlin.

“My biggest fear about a lot of the greatest things we are doing in Europe is the sustainability arbitrage. Many look at this with a short-term lens, a Milton Friedman approach. We have to make sure that we carry the voice of the world to change the system. We cannot do this in isolation,” said Parry.

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

 
Location
Ireland
Related Goal
Goal 12: Foster bankable green assets in cities
Articles you may be interested in
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
In The News
Lisbon’s City Finance Lab-backed green participatory budget awarded €5 mil...

Lisbon City Council’s first-ever ‘green’ participatory budget, an initiative...

Lisbon’s City Finance Lab-backed green participatory budget awarded €5 million for next cycle
In The News
WCEF 2019: ‘The circular economy in cities’

EIT Climate-KIC CEO Kirsten Dunlop emphasised the importance of...

WCEF 2019: ‘The circular economy in cities’
In Detail
New Report on Circular Procurement in public construction projects shows how...

Public procurement affects a substantial share of world trade, amounting to more than €1.3 trillion per year. In the EU, the public purchase of...

New Report on Circular Procurement in public construction projects shows how targeted action can drive system-level impact
In The News
EIT Climate-KIC at World Circular Economy Forum 2019

EIT Climate-KIC is playing a prominent role at the...

EIT Climate-KIC at World Circular Economy Forum 2019
In The News
17 EIT Climate-KIC solutions included in MI 100 Global High Impact listing

13 EIT Climate-KIC Accelerator start-ups and four EIT Climate-KIC...

17 EIT Climate-KIC solutions included in MI 100 Global High Impact listing
In The News
EIT Climate-KIC’s global cleantech competition ClimateLaunchpad is open ...

EIT Climate-KIC’s ClimateLaunchpad, the world’s largest green business ideas...

EIT Climate-KIC’s global cleantech competition ClimateLaunchpad is open for registration
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
In The News
EIT Climate-KIC supported SkyNRG develops Europe’s first sustainable jet...

SkyNRG announced plans to develop Europe's first sustainable aviation...

EIT Climate-KIC supported SkyNRG develops Europe’s first sustainable jet fuel production plant
In The News
EIT Climate-KIC supported report shows how to reduce industrial CO2 emissions

A new joint report, published by RWTH Aachen University...

EIT Climate-KIC supported report shows how to reduce industrial CO2 emissions
In The News
London event showcases innovation behind new investor climate tool

Yesterday’s event, titled “Applying Climate Risk Data to Investment...

London event showcases innovation behind new investor climate tool
In our community
Interview with Francisco de la Torre, Mayor of Malaga, Spain
Interview with Francisco de la Torre, Mayor of Malaga, Spain
Opinion
Adapting to climate change in Europe: Building a systemic and urgent vision
Susannah Fisher, EIT Climate-KIC and Andrew Norton, IIED
Adapting to climate change in Europe: Building a systemic and urgent vision
In our community
Interview with Andrzej Wiszniewski, President of the Board, National Energy ...
Interview with Andrzej Wiszniewski, President of the Board, National Energy Conservation Agency Poland
In The News
FEED-X programme aims to transform global feed industry

Supported by EIT Climate-KIC, global feed supplier Skretting, WWF...

FEED-X programme aims to transform global feed industry
In The News
New reports say net-zero emission EU heavy industry by 2050 is achievable

Achieving net-zero emissions by 2050 for European energy-intensive industries...

New reports say net-zero emission EU heavy industry by 2050 is achievable
In The News
Five EIT Climate-KIC startups announced as Cleantech Innovate finalists

Five EIT Climate-KIC supported startups are among the 30...

Five EIT Climate-KIC startups announced as Cleantech Innovate finalists
In The News
Drawdown book: Global warming is reversible

Climate protection initiative gives a preview of the German...

Drawdown book: Global warming is reversible
In The News
International effort launched to determine best CO2 capture & utilisation ...

Economic and environmental guidelines will support new industries and...

International effort launched to determine best CO2 capture & utilisation technologies
In Detail
New report cements wood as the future of construction

In a new report, 25 examples of using wood in construction showcase that reducing the carbon footprint of our buildings is not only possible,...

New report cements wood as the future of construction
In The News
Transatlantic bridge for European innovation: EIT Community opens its first Hu...

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

Transatlantic bridge for European innovation: EIT Community opens its first Hub in Silicon Valley
In The News
EIT Climate-KIC supported Beyond Ratings registered as credit rating agency by...

EIT Climate-KIC supported firm Beyond Ratings, a financial services...

EIT Climate-KIC supported Beyond Ratings registered as credit rating agency by European Securities and Markets Authority
In our community
Interview with Nico Wolf, CFO, Endless Energy – Winner of the EIT Climate-...
Interview with Nico Wolf, CFO, Endless Energy – Winner of the EIT Climate-KIC Finance Incubator Competition
In The News
EIT Climate-KIC supported Ombrea raises €1 million to commercialise its smar...

EIT Climate-KIC supported start-up Ombrea, which offers a tool...

EIT Climate-KIC supported Ombrea raises €1 million to commercialise its smart agriculture system