Public money, tied to political decisions won’t save us from the climate challenge
We are now just over 100 days from Cop27 in Sharm el-Sheikh. It only feels like yesterday that many of us in the Square Mile made the journey to Glasgow for Cop26, working hard to ensure that financial and professional services played its part in helping keep climate change goals within reach.
Yet with just over 100 days until the world once again convenes to tackle one of the greatest issues of our time, eyes will be turning to Egypt. That means we have just over 100 days of the UK’s presidency of the summit remaining. 100 days to leverage our leadership for positive change.
Now this might not seem like much time – it is only a moment in the grand scheme of our planet’s existence – but it is enough time to hand over the climate baton in stronger shape than we received it.
The Square Mile is taking another important step in this race against time.
At the Mansion House, the Lord Mayor and City of London Corporation are hosting the Finance for Impact Summit alongside delivery partners the Impact Investing Institute and KPMG.
This event will build on the work of Cop26 and the Net Zero Delivery Summit held here in May, which brought together climate figures such as John Kerry and Mark Carney to maintain industry momentum for financing climate action.
The Finance for Impact Summit has a clear mission: to scale finance for impact and elevate the ‘S’ alongside the ‘E’ in ESG.
We are encouraging the sector to not only think about the changes necessary to safeguard our planet’s future, but also to think about how those changes will be delivered in a fair and inclusive way.
The big societal challenges of our age – climate change and inequality for example – have been brought into even sharper focus by the political and economic turbulence in the UK.
It shows us the need for private finance to help address this. Public money, at the whims of Westminster, will not be enough.
And we will need private finance that measures and manages its social impact – thus ensuring our sustainable future is delivered in a way that ensures all walks of society are supported on the journey.
Otherwise, there may be no transition at all. The Summit will see financial services firms with £3.6tn of assets under management join the Impact Investing Institute’s Just Transition Finance Challenge.
The challenge will focus on scaling the deployment of finance to deliver positive and measurable outcomes, and include a new industry-led framework for turbocharging finance for impact.
Additionally, KPMG will launch a set of recommendations for finance for impact to scale – informed by the financial services industry – calling for progress in tangible ways.
These actions – not words – show that we have the tools and the momentum to begin scaling finance for impact at our disposal.
This leadership is critical. Other jurisdictions, including the EU, have started to consider social impact frameworks that would enable growth, but there is currently no agreed, international gold standard.
If we in the City can progress this issue, it will show real global leadership, enabling our country to provide impetus, direction, and clarity to a fledgling finance for impact ecosystem and allow it to take root here.
Today’s Summit can burnish our reputation as a world-leading sustainable financial services centre.