Fifty years ago, Stockholm hosted the United Nations Conference on the Human Environment that resulted in the creation of the United Nations Environment Programme (UNEP), and paved the way for global climate action. Since 1972, the world has witnessed the emergence of innovative initiatives, the implementation of new regulations, and growing contributions from both the public and private sectors to tackle the triple planetary crisis of climate change, nature, and pollution. Despite the commitment and green transition of several actors, our societies are facing major challenges, ranging from degraded air quality, water scarcity, biodiversity loss, and soil erosion. As pinpointed by the WWF, the world still needs to close a $ 4.1 trillion financing gap in nature by 2050. In this context, the finance industry can become an important contributor to the environmental movement and ensure a safer and healthier planet for future generations.
Sustainable finance, if effectively leveraged, can become a powerful tool in ensuring the very survival of our planet. However, the finance world has yet to align its objectives according to the 2030 Agenda, the Paris Agreement, and the post-2020 Global Biodiversity Framework. “Without this alignment, there is no chance the Sustainable Development Goals can be achieved,” says Mark Halle, Senior Advisor at UN-convened Financial Centers for Sustainability. Mark Halle also insists on the dramatic detachment of the financial system from the needs of the real economy. From his perspective, the finance world needs to urgently refocus its activities to ensure that they serve the public good, rather than the goals of the industry.
Nevertheless, institutional investors have already started the transition, as emphasizes Yves Mirabaud, Chairman of the Board of Directors of the Mirabaud Group: “No investor would consider an investment proposal that is not ESG compliant today, and this is a major change!” Furthermore, the UNEP recognizes that a giant leap has been made to tackle the triple planetary crisis. For instance, central banks are standing up to these pressing issues by adapting their practices. They comprehend that their capacity to deliver on their price and financial stability objectives will be severely endangered, if not impossible, should climate change and the biodiversity loss be left unanswered.
Investing in energy transition and innovative technologies rendering our economies more sustainable is only one application of the features of sustainable finance. New practices in terms of sovereign debt restructuring are also gaining momentum. States may, for example, refinance their national debts by investing in a conservation fund aimed at protecting biodiversity. Issuing green bonds, which contribute in investing in pioneering start-ups willing to make the fight against climate their own, is just another example of how we can unleash the full potential of sustainable finance.
“Soon, sustainable finance will not be best practice, but common practice.”
-Jörg Gasser, CEO, Swiss Bankers Association (SBA)
And for many observers, Geneva offers a unique gathering opportunity to help humanity overcome these pressing challenges. Switzerland’s Ambassador to the UN in Geneva, Jürg Lauber, believes that Geneva’s multidimensional ecosystem is unique in its capacity to shape partnerships with a variety of actors that all share the same goal of attaining the UN 2030 Agenda. Members of the finance world all share a common duty in making finance a formidable ally in the global fight against climate change, and the nature and pollution crisis.