Monday 8 February 2021 11:30 am

London is a leader in green finance but we must strive for more

William Russell is Lord Mayor of the City of London.

The pandemic has propelled our global community towards a major crossroads in 2021, and we arrive knowing that the direction we choose will prove critical for the future of our societies and our planet.

It has accelerated systemic changes in the global economy and demonstrated the absolute need for international collaboration across governments and institutions in order to solve the challenges we face.

Envisaging what that future should look like helps us to know which path to take, and was the main thrust of a new-look virtual Davos last month. That future is clearly coming up fast, with 2020 recently confirmed by NASA as the warmest year on record. 

But we still have a choice. As former US Vice President Al Gore remarked, we now find ourselves headed towards a “sustainability revolution”, a global transition empowered by digital technologies which weren’t at our disposal even a decade ago.

This means that the financial community now has a clear and obvious decision to make, and I found Mark Carney’s frank comments here particularly resonating: if you are in the private financial sector and not part of the solution, it’s because “you will have made the conscious decision to not be aligned to net zero”. 

Read more: Explainer: What are green bonds? And how will the UK’s first green gilts work?

By not pursuing a net-zero future you are therefore choosing to become part of the problem. As I explained in my Gresham Lecture last week, what was once a risk is now the business opportunity of the century, creating thousands of jobs and profits –  the businesses that put environmental resilience at their core will be highly valued and desirable. In short, money talks, and what it’s saying is “go green or go home”.

The UK must be similarly clear-eyed with our international partners as we look towards COP26 in Glasgow later this year.

I’m already very proud of the leadership that we are showing in the green space: our financial sector is consistently ranked as one of the most innovative when it comes to green finance, and when I speak with stakeholders from around the world every day I hear for myself how British ingenuity in sustainability has piqued global interest.

I was delighted by Chancellor Rishi Sunak’s bold commitments during our Green Horizon Summit in November, such as mandatory TCFD for listed companies and the introduction of a green sovereign bond. We must continue that momentum in the months ahead.

The pandemic has killed more than two million people worldwide. This tragic toll should not be diminished but the reality is that climate change is an even greater threat to life on our planet. Our future must be one in which every financial decision takes climate change and other sustainable factors into account, so that all finance is green – a future in which green finance is simply called ‘finance’. 

Thanks to unprecedented global collaboration, we are starting to fight back against the pandemic, but the path we need to take to beat climate change will require us to surpass even those efforts. It’s clear then that every person, business and country has a role to play.

There is no time to waste. This must be the year that the sustainability becomes intrinsically valued across our economy – let’s head down that route with confidence and ambition.

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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.