Ahead of COP26, Bloomberg brought together experts from the financial sector, for a virtual conference ‘COP26 and the Mobilisation of the Finance Sector – France at the Heart of Global Net-Zero Commitments’. The conference addressed the urgency of shifting capital towards low carbon and climate-friendly solutions and the role of the financial sector in turning the tide on climate change.
The list of experts included:
Bruno Le Maire: Minister of the Economy and Finance France
Michael Bloomberg: UN Special Envoy on Climate Action, Solutions, and Finance, and Global Ambassador for Raise to Zero and Raise to Resilience Campaigns
Mark Carney: UN Special Envoy on Climate Action and Finance
Jean-Laurent Bonnafé: Chief Executive Officer BNP Paribas
Thomas Buberl: Chief Executive Officer and Director AXA
Valérie Baudson: Chief Executive Officer Amundi
Thierry Deau: President Finance for Tomorrow
As a global leader in sustainable finance and being the first country to mandate investors to report on ESG integration in climate, France was the country at the heart of the discussion. Accordingly, France’s Minister of Economy and Finance, Bruno Le Maire, was the first speaker introduced by host Francine Lacqua.
Le Maire first pointed out the COP21 Paris Agreement – which was signed in 2015 by all represented countries to commit to net zero emissions by 2050 – as being the starting point of numerous companies and financial institutions committing to net zero ambitions.
He then mentioned France’s ambition to become the first major decarbonized economy in Europe. According to him, the country has already been on this low carbon path for a long time through its nuclear-generated energy and electricity and they will continue to massively invest in their nuclear energy industry, in order to reach the final net-zero goal.
France clearly hasn’t thought about the detrimental consequences of nuclear energy, e.g. the most common problem out of many being the storage and degradation of its radioactive waste. Or maybe they have, but it’s probably more convenient for them to ignore the problems and paint nuclear energy as being an efficient low carbon energy source, since 70% of their electricity is derived from nuclear energy and, by being the world’s largest exporter of electricity, they make over €3 billion per year from this.
Le Maire also recognized the importance of funding to curb innovation and investments in new carbon-free energy sources, and called out for more cooperation among member states, especially in the finance industry and the energy sector. He also urged companies and financial institutions ahead of COP26 to join the global commitment to reach carbon neutrality by 2050, if they haven’t done it yet, and to report publicly whether their strategy is compatible with limiting global warming to 1.5 degrees C.
The next speaker was Michael Bloomberg. As the UN Special Envoy on Climate Action, Solutions and Finance and Global Ambassador for Raise to Zero and Raise to Resilience Campaigns, he has been at the forefront of climate action through his business, philanthropic, and UN-affiliated work.
Bloomberg explained the role of the governments in leading the way to net-zero ambitions by making commitments and backing them up with concrete actions. But as we all know, governments can’t do this alone, so Bloomberg mentioned the private sector as another relevant player: “At Bloomberg, we’re working to enlist more private partners through the TCFD (Task Force on Climate-Related Financial Disclosures), which has become a global standard for financial disclosure. We’re also seeking support from financial institutions through the UN Raise to Zero campaign, and GFANZ (Glasgow Financial Alliance For Net-Zero).”
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UN Special Envoy on Climate Action and Finance, Mark Carney was the following speaker. He mentioned that one of the COP26 objectives is to “create the information, the tools, and the markets so that every single decision in the financial area takes climate change into account.” He also pointed out that net-zero commitments have increased, and that there should be a greater distinction between companies that are part of the solution and those that are part of the problem. In this context, Bloomberg’s TCFD could be an excellent tool for companies to report on climate-related financial disclosure and recommendations.
Moreover, Carney mentioned that they’re building commitment to a whole economic transition because, without that transition, it will be impossible to get to net-zero. “Virtually every company in every sector will need to transform its business model, requiring investments of over 100 trillion dollars in the next three decades.” The GFANZ was created to exactly meet those needs, bringing together over 250 financial institutions responsible for over 88 trillion dollars of assets anchored in the race to net zero.
Following these three important financial leaders, Lacqua introduced three CEOs of large company members of the GFANZ: Jean-Laurent Bonnafe (CEO BNP Paribas), Thomas Buberl (CEO & Director AXA), and Valerie Baudson (CEO Amundi). In regards to their membership at the GFANZ, Lacqua asked them why their company joined this initiative:
Jean-Laurent Bonnafé – CEO BNP Paribas – said: “It’s a collective effort. We need to make it happen, to transition collectively in the better interest of our children, families, the economy, and countries. It’s a difficult task, and it’s always better to have openness, understanding of not only what you have to do, but also what the others understand and believe so that you can collectively move ahead.”
According to Thomas Buberl – CEO & Director of AXA – “Many companies are engaged, but the GFANZ is really making us speak as one voice. All entities are on the table, there’s a high convergence on where we want to put the focus on, how we want to act both on frameworks and initiatives. It has really created a new momentum – the companies together really enforce each other. Also, the whole GFANZ gives credibility around the actions, but also around how they’re being measured.”
Valerie Baudson – CEO of Amundi – said: “There’s an emergency: we need to accelerate, and I’m personally convinced that the financial sector is a key catalyst for action in this race to net zero. And as one of the world leaders with 1.8 trillion assets in management, Amundi has an obligation, particularly in view of the upcoming COP26. That’s why we joined the coalition of asset managers committed to reaching carbon neutrality by 2050.”
Baudson also stressed that although the finance sector has a lot of influence and power in the race to net zero, the companies that are being invested in play an equally important part in this race; the ambition can only be achieved if the companies are truly engaging themselves in a net-zero trajectory.
The last speaker on the panel was Thierry Déau, president of Finance for Tomorrow, an initiative that brings together all private, public and institutional players in the Paris financial center who wish to commit themselves to finance that focuses on a sustainable future.
Déau stressed the importance of making sustainable finance mainstream finance, which is something that Finance for Tomorrow and the Paris Financial Center have been mobilized to do since COP21. He also introduced a very interesting and groundbreaking initiative in the green finance sector, which was launched by Finance for Tomorrow together with the French financial sector: the Observatoire de la finance durable (sustainable finance observatory).
Witnessing these leaders, controlling some of the largest financial organizations in the world, actively doing something in the race to net-zero by joining coalitions and alliances such as the GFANZ, as well as seeing how they express their understanding of the role and responsibility of the financial sector has, gives hope for other companies to follow in their footsteps and join their effort in fighting climate change.
It all starts with recognizing the massive influence finance can have in the race to net-zero by thinking twice about where to divert funds and investments, as well as actively monitoring companies receiving such investments. Finance has incredible power in the race to net-zero and this power shouldn’t go to waste.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com Featured Photo Credit: Arto Marttinen via Unsplash.com