Monday 27 January 2020 4:45 am

Going green: The City is leading the charge towards a sustainable financial future

William Russell is Lord Mayor of the City of London.

This year, for the first time ever, the climate crisis dominated the World Economic Forum’s Global Risks Report.

The five top threats to the global economy identified all concerned the environment.

Unprecedented climate events are happening with alarming regularity. The message is clear: we must urgently work together to achieve the transition to a green economy.

The scale of the challenge ahead is unquestionably daunting, but the City must continue its role as a world-leading innovator to effect this historic change.

The transition demands a monumental reallocation of capital. Globally, $90 trillion will be needed by 2030 to achieve international sustainable development and climate objectives. This reallocation will in turn demand a new kind of finance — green finance.

Green finance places climate concerns at the heart of financial decision making. It allows us to mitigate risks and capture the abundant opportunities a green future presents.

The whole City has a part to play — whether that’s through structuring green bonds, empowering investors to build carbon-conscious portfolios, or backing new technologies and low-carbon infrastructure projects.

Already, the London Stock Exchange is home to 218 sustainable bonds which have raised over £40bn. And last year, London was ranked first for quality in the Z/Yen green finance global rankings. But we must not rest on our laurels — there is still so much more we can do.

One of the most important factors in accelerating green finance is marrying efforts of the public and private sectors. In order to help achieve this, we recently launched the Green Finance Institute. This is an independent organisation sitting at the nexus of the public and private sectors, with ambitions to mobilise capital to accelerate the transition to a zero-carbon and 

climate-resilient economy.

But it’s not just cross-sector collaboration that is needed. We must also work from city to city and country to country. 

This week, I will be joining forces with the first minister of Scotland Nicola Sturgeon to spearhead Scotland’s green finance push.We will be co-chairing a green finance roundtable, bringing together prospective and current investors in the sector and other prominent business leaders to unlock the significant potential of green finance in Scotland.

The UN’s climate change summit is being held in Glasgow in November, and will be an important forum to progress the green finance agenda. With such a key event being hosted on home soil, 2020 presents a great opportunity to focus minds.

The stakes have never been higher, but our mission is clear. We need to act urgently to build a resilient and low-carbon economy. 

Green finance must become so ubiquitous that it becomes the norm. We are going to require new forms of cross-sector collaboration, the removal of barriers to investment, and the recalibration of our economy so that more capital is directed towards climate change mitigation and resilience.

The UK is already leading the charge to a sustainable financial future. We’re here, and we’re ready to play our part in a cleaner, greener future for businesses and citizens.

Main image credit: Getty

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.