The science is clear on the triple planetary crisis of climate change, nature and biodiversity loss and pollution and waste. This crisis poses an immediate and growing threat to human health, prosperity and equity – as we saw all too clearly with catastrophic floods in Pakistan. And the crisis poses a threat to businesses and financial institutions.
The truth is, we have known this for some time. And yet action on and investment in addressing the triple crisis is falling far short. Economies and businesses still largely back practices that gobble up the planet’s resources to feed short-sighted profitability metrics. According to UNEP’s State of Finance for Nature report, global investments that degrade nature exceed conservation efforts by USD 600-852 billion annually.
Sustainability-oriented investments need to triple by 2030 to meet climate, biodiversity and land neutrality targets. The public sector alone cannot finance this. We need to align private finance with efforts to protect and restore the natural assets that underpin human wellbeing.
This has been UNEP FI’s core mission for 30 years: working with the financial industry to deliver positive impacts and put the needs of people and planet at the core of business strategy and operations. UNEP FI has worked with members to develop frameworks and partnerships that allow financial institutions to strategically align financial flows, while joining a global movement to drive change and creating opportunities for sustainable, prosperous growth.
Nearly 300 banks, representing almost half the global banking sector, are implementing the Principles for Responsible Banking. Over 100 insurers, reinsurers and brokers representing about one-third of world premium volume have adopted the Principles for Sustainable Insurance. Under the UN-convened net zero alliances, over 200 banks, insurers and asset owners have committed to aligning their portfolios with net zero goals.
We are on the right trajectory. But so far it is a planning and promises trajectory, which, while welcome, isn’t going to get the job done. The rest of this year could be pivotal for climate and nature. The financial sector can help this pivot by putting their shoulders to the wheel.
At the COPs – on climate in Sharm El Sheikh and on biodiversity in Montreal – the sector has a chance to signal to policy makers that it needs the right signals to align financial flows with climate and biodiversity targets. COP27 will also highlight the importance of adapting to climate change – an issue upon which members of UNEP FI have not focused enough. The international legally binding agreement on plastic pollution being negotiated also provides an opportunity for financial institutions to support a shift to a circular plastics economy – which will protect the planet, create jobs and retain the value of plastics rather than throwing it away.
I also urge the financial sector and policymakers to start treating other crises as opportunities. We missed the chance to invest in a low-carbon recovery from the COVID-19 pandemic. The energy crisis is increasingly looking likely to be another one that got away. How many other golden opportunities to invest in a low-carbon, circular and resilient future can we afford to miss? The answer is none.
So, yes, I encourage you to join leadership initiatives and alliances. But more important is to turbo boost your efforts to implement your promises and integrating sustainability considerations fully into financial practice. Because doing so is in the best interests of people, planet and your industry. Thank you.
