Richard Peers’ Post

What will the UK climate fintech space look like in 2035? - Finextra Research: This is an extract from the recently published report, 'The Future of UK Fintech - 2015-2035'. 2006 ...

Navigating the path to sustainable finance Financial institutions face mounting pressure to disclose their environmental impacts and play a proactive role in sustainability. New regulations demand transparency, requiring banks to report not only their own sustainability but also the downstream environmental impacts of their financed businesses. This shift presents an opportunity for the financial industry to drive meaningful change through investment segments like green finance and climate finance. However, with annual climate finance needs potentially exceeding $10 trillion by 2050, financial institutions must swiftly scale up their efforts to address the pressing challenges of climate change and biodiversity loss. Gerrit Sindermann, Executive Director of Green Digital Finance Alliance and President of Green Fintech Network (GFN) sheds light on how financial institutions can establish themselves as drivers of the green transition rather than financers of polluting industries. Explore his insights on I by IMD: https://bit.ly/4bIySi1 #IMDImpact #IbyIMD

We need a transformation of the financial system to speed the just transition to a net zero, resilient & nature positive economy. That's the key message of the report we're releasing alongside the launch of the new Just Transition Finance Lab based at the Grantham Research Institute on Climate Change & the Environment. You can read the report here: https://lnkd.in/gVg3T-2a The sense of momentum around the just transition is now palpable and it's really heartening to see the first generation activities by governments and MDBs, investors and banks to mobilise the world of finance. But an honest assessment shows that the scale, speed and depth of these activities is simply insufficient. So the Lab is designed to be a centre of experimentation and excellence to catalyse the breakthrough solutions we need to deliver climate action with social justice as core. - Our first goal is to design financial instruments and strategies that are focused on just transition outcomes. One early priority is the bond market where we're partnering with the Climate Bonds Initiative. Another is to realise the transformational potential of transition plans to make sure that people are at the heart of the planning process. - Our second goal is to help answer the question 'what does good look like?' through a new metrics programme showing how just transition performance can be tracked with integrity at the system, institution and place levels. - Our third goal is to identify and achieve the policy reforms which are required to put in place effective market rules and incentives, and an early output will be a state of just transition policy report with Tiffanie Chan, Catherine Higham & Joana Setzer. - And our fourth goal is to profile emerging leadership in a new case study series, the first of which focuses on the UK energy utility SSE plc which you can read here https://lnkd.in/ggZ5v7mF We hope you will join us in making this happen Brendan Curran, Jodi-Ann Jue Xuan Wang, Georgia Davies, Oleksandra Plyska, Sangeeth Raja Selvaraju, Rowan Conway, Elizabeth Robinson, Bob Ward, Liam Collins, Merlin Sibley, Georgina Kyriacou, Antonina Scheer, Sharan Burrow, Catherine McKenna, Rosey Hurst, Andy Griffiths, Stephan Chambers, Suranjali Tandon, Vonda Brunsting, Satwat Rehman, Dr Darian McBain, Prasad Modak, Mukund Rajan, Priyanka Dhingra, Neha Kumar, Colin Baines, Sophia Tickell, Mark Nicholls, Julie Segal, Sarah Gordon, Isabel Blanco, Sandy Lowitt, David Wood

Breaking news! “Greenhouse gas emissions enabled by the largest banks and asset managers in the U.S. are so substantial that, when compared to countries’ emissions, they represent the third-largest emitting country in the world, behind China and the U.S.” Wow! New report from Topo Finance Paul Moinester addresses what #climate luminary Bill McKibben calls “the largest remaining source of huge and hidden carbon emissions in our economy.” As renowned University of Oxford economist Cameron Hepburn points out - "It's not everyday you find $7 trillion quietly helping to fund fossil fuel investments without the owners of the cash even being aware. Ignorance is no longer an excuse!" This means companies committed to a liveable planet have huge opportunities to leverage their financial management to drive climate progress. Mahmoud Mohieldin United Nations Special Envoy for Financing Sustainable Development, and UN High Level Climate Champion for COP27 so eloquently explains: “The untapped potentials highlighted in this excellent report by Topo Finance, if used wisely to enhance investments in renwable energy, could be a game changer in bridging the widening renwable energy gap, especially in developing countries. Guided by this report we need to be proactive towards providing companies from these countries with the technical assistance and capacity building essential to develop the data, tools, and strategies needed to analyze and decarbonize their economic activities and financial services”. Hear! Hear! Looking forward to doing just that in May this year, welcoming islands and countries committed to 100pc #renewable #energy to #Hawaii May 5-10, generously sponsored by Blue Planet Alliance Henk Rogers & Salesforce CEO Marc Benioff. Tx to Green Climate Fund for joining us to accelerate the transition! Brad Punu https://lnkd.in/gZ5rA-qQ The World Bank Carl Hanlon Nicole Darnall Carmen Vicelich Sally Treeby Jennifer Nielsen John O'Brien IFC - International Finance Corporation UNFCCC UN United Nations Environment Programme Finance Initiative (UNEP FI) Inger Andersen

We need Finance & Fairness for the NDCs Soon the countries would be updating their NDCs. Of the four key elements in the latest Climate Action Tracker (CAT) for the NDCs, I’d like to focus in on ‘Finance & Fairness’ which I believe is central to any ambition getting delivered credibly and transparently.    For a seamless flow of finance, four things are important and I believe the current carbon markets have the foundations and building blocks to deliver this:   Scientific Methodologies: We have a massive body of knowledge in constantly evolving methodologies, labels and evaluation criteria. They provide developers of carbon projects strict guidelines in reducing and removing GHG, while balancing the social and biodiversity impact. The ecosystem will need to continue to move the guardrails on use, as the market matures and emission curves move.   Harmonised standards: The ICVCM and VCMI have done great work in harmonising our understanding of the various methodologies and registries, whilst increasing confidence in integrity and claims. Complexity and an abundance of standards is not a flaw, but a feature of decades of work to develop robust options that various scientists have made available to us so that we can ACT.   Technology & Risk Management: There are number of reliable trade mechanisms which make sure global transactions result in parties getting what they paid for. In case of grievances, we are also seeing the emergence of risk management tools and technologies.   Advocacy & Honest Communication: Recently, we have seen a heightened focus on the carbon markets that invites scrutiny and advocacy, pushing forward market developments and improving education on the ‘why’. In the last two weeks, we have also seen many West African states emphasising their need for a climate finance to deliver immediate capital in a run up to SBTi’s review on corporate use of carbon market mechanisms. “To us, carbon markets is climate finance…. There is no alternative. We are at a pivotal moment,’ the nations stressed. We need to be realistic with the financing levers in front of us to practically deliver a fair and just transition, that mobilises capital from the Global North to the Global South. The pursuit of perfection, in an imperfect world, will be our collective downfall.   I strong recommend that when updating NDCs, governments push for climate finance innovation, incentivisation and a carbon price that nudges the private sector to:   1-Effectively manage their capital to deliver climate action  2-Participate in public-private projects that brings the private sector’s entrepreneurial mindset together with the government’s ability to provide pathways to scale – think grids, sustainable fuels and CDR 3-Support the contribution towards delivering on the NDCs and surface authentic dialogue on where the gaps and challenges remain   Full report: https://lnkd.in/dAju_QVS

"“These voluntary commitments, on their own, seem to not be having the effects that perhaps people are hoping they might have,” said MIT Sloan finance professorEmil Verner, one of the paper’s co-authors. “There’s been more talk than action.” Specifically, Verner and co-authors Parinitha Sastry from Columbia University and David Marques-Ibanez from the European Central Bank found that net-zero banks haven’t divested from polluting sectors, haven’t scaled up project financing for renewable power projects, and have failed to influence climate behavior in the firms they lend to. The results are concerning because many policymakers, activists, and other stakeholders believe that the private sector needs to play a major role in transitioning the economy away from carbon-intensive production. “Banks play a central role in capital allocation, so they are key to financing the green transition,” the authors note in their paper." https://lnkd.in/dhkrzFwp? #NetZeroInvestment

Thanks Bruegel - Improving economic policy for the invitation to discuss priorities for the EU financial services agenda with panellists Nicolas Veron, François Villeroy de Galhau, John Berrigan, José Antonio Álvarez at #BAM24. The EU has led by example in the international climate agenda. However, since the energy prices crisis the EU lost momentum. Science showed us what type of investments are needed and which ones not to make the EU competitive against #climate #risks, while preserving fiscal and #financial #stability. My 4 points for the #agenda of the new Commission: 1. The future of sustainable finance passes through #policy #credibility and #coherence across domains because they affect investors’ #expectations, which in turn drive #risk #assessment for high and low-carbon goods and #capital allocation (https://shorturl.at/Khm69). No trust = no achievement of the 2C target. 2. Without a sustainable economy there is no sustainable finance. We need long term (+20years) pro-climate investment plans that do not do harm (e.g. via emissions, destruction of natural resources and livelihoods). Pro-climate investments support #quality #growth and #jobs, and generate green #fiscal #multipliers, decreasing the trade-offs. 3. Better #metrics and #macro-#financial #models to inform policy are needed. Metrics to define what is green and what is not green should be transparent, science-based and not subject to political sentiments. Assessing climate risk exposure using solely #GHG emission-based metrics (e.g. emissions intensity) and physical risk using aggregate scores can lead to risk underestimation and greenwashing, increasing financial risk. #Macrofinancial #models used for Econ policy should evolve to capture climate risk characteristics (#nonlinearity, #tailrisk and #outofequilibrium dynamics), risk-specific transmission channels, macro-financial feedback, and should allow agents to depart from rationale forward-looking expectations and embed #adaptive #expectations because expectations can change abruptly and affect the value of assets and capital available. Macroeconomic (CGE or DSGE) models used at central banks and financial supervisors collapse climate complexity using exogenous frictions. These are far from properly capturing impacts of climate risks, real trade offs, potential solutions. #Poor #assessment of #risk and #opportunities (cobenefits) leads to ineffective policies and use of money, creating unproductive new debt (either public or private), and thus increasing financial risk. Stock-flow consistent models are already complementing standard models, offering new opportunities. 4. #Climate #Eurobond: a credible climate agenda requires money. Going together is better: cheaper and more effective in terms of influencing expectations and ratings (https://lnkd.in/dZbjQ5Ez). Finance @ Utrecht University School of Economics WU (Vienna University of Economics and Business) Monica Billio Stefano Battiston Nepomuk Dunz

https://lnkd.in/gXwZgMgA 🌿💼 At first glance, nature and finance might seem worlds apart. But dig a little deeper, and you'll find an intricate web of connections that binds them together more closely than you might expect... "New analysis shows that deterioration of the UK’s natural environment could reduce GDP by 12%, which is worse than the global financial crisis where the GDP fell by 4-6% and the COVID 19 pandemic when GDP fell by 11%." Understanding the interconnectedness and not just looking through a single lens of sustainability challenges (I'm looking at you GHG reduction fanatics 👀) is far more important than just thinking about the financial gains, but with so many companies needing a business case or financial incentive to take action, myself, Oliver Charlton and Diana Donovan wrote a piece on WHY and HOW we need to start investing in nature. By aligning our financial strategies with the principles of sustainability found in nature, we not only foster economic growth but also ensure the health of our planet. 🌍📈 #Finance #Sustainability #Nature #ImpactInvesting #EcoFinance #Resilience #RiskManagement #LongTermPlanning

An interesting post and article of Green Central Banking with some NewClimate Institute and World Benchmarking Alliance in it.

The Future of Climate Finance: Trends and Predictions - Rachael A.O Antwi, CEnv As the world intensifies its efforts to combat climate change, the landscape of climate finance is evolving rapidly. Here are some key trends and predictions shaping the future of climate finance: 1. Increased Investment in Renewable Energy: Expect significant growth in funding for solar, wind, and other renewable energy projects as the global demand for clean energy rises. 2. Green Bonds Surge: Green bonds are becoming more popular, providing a reliable source of funding for sustainable projects. 3. ESG Integration: Environmental, Social, and Governance (ESG) criteria will increasingly influence investment decisions, pushing companies to adopt more sustainable practices. 4. Technological Innovation: Advances in technology, such as AI and blockchain, will enhance the efficiency and transparency of climate finance. 5. Public-Private Partnerships: Collaboration between governments and the private sector will be crucial in mobilizing the necessary funds for large-scale climate initiatives. 6. Focus on Adaptation and Resilience: More investments will be directed towards helping vulnerable communities adapt to climate impacts and build resilience. 7. Policy and Regulatory Support: Stronger policies and regulations will drive the expansion of climate finance, encouraging more organizations to participate. 8. Global Cooperation: International cooperation will be essential to address climate change effectively, with developed countries supporting climate finance initiatives in developing nations. The future of climate finance is bright, filled with opportunities to make a lasting impact on our planet. How is your organization preparing for these trends? #ClimateFinance #Sustainability #GreenInvestment #RenewableEnergy #ESG #Innovation #PublicPrivatePartnerships #ClimateChange #FutureTrends