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The financial sector must be at the forefront of building a low-carbon economy
The voices calling for profound change in the nature of the world’s economy are growing. Governments and companies, called upon by citizens to hasten the emergence of a low-carbon economy, have tried for years to respond to these calls, but the result to date is limited.
We were sharply reminded of this only a couple of weeks ago by a group of more than 15,000 international scientists. They said that time is pressing and that it will soon be too late, that at the current pace of change we will not achieve the target of keeping global warming below 2°C by the end of the century. Consequently we will not be able to meet the unprecedented challenges we face: access to drinking water; an agricultural model that can feed all; or managing migration caused by climate change. And we must meet these challenges without denying developing countries the right to deliver economic prosperity to their own people.
In this race against time, the banking and financial sector must be at the forefront of building a low-carbon economy. Banks, which are the engine of the economy and which bring individuals, businesses and investors together, can change things. Through their financing and investments they are in a position to strongly influence their clients and encourage them to make a commitment to address a situation that has now become urgent.
In this race against time, the banking and financial sector must be at the forefront of building a low-carbon economy.
How can they do this? Clearly by providing large-scale financing for the projects of the future, such as those devoted to renewable energy or energy efficiency; and by supporting those companies which are committed to adapting their business strategies to meet the climate challenge.
Given the urgency, we need to focus efforts on providing everyone with the means of transforming the economy. The solutions exist, at a reasonable cost, and require only scale. Our responsibility as a bank and as the meeting point for actors in the economy is to enable individuals to channel their savings towards financing the energy transition just as we help institutional investors orient funds towards ‘green’ projects. As an example, BNP Paribas has granted loans worth €135 billion which are directly helping to achieve the United Nations’ 17 Sustainable Development Goals. We are among the top three players worldwide in green bonds, we manage some €25 billion worth of decarbonised asset and we have set a target of lending €15 billion to renewable-energy projects by 2020.
we need to focus efforts on providing everyone with the means of transforming the economy.
I am convinced that banks—which have proven their ability to contribute to previous economic and social transformations—will be able to create the multiplier effect needed to help build a low-carbon economy.
This is the key to a sustainable growth that will create jobs and foster an economic development that is beneficial for society.
All our stakeholders—ordinary citizens, customers, investors, employees and NGOs —are demanding this of us. Together we must take determined action to reach the 2°C target which governments alone cannot achieve. Together we must make a commitment to do more, and to do it faster and more efficiently. There will be no winners in the long term if society as a whole loses out. This is the key to a sustainable growth that will create jobs and foster an economic development that is beneficial for society.
In addition to the urgency of addressing climate change, there is also a need to provide the necessary financing, but not by neglecting developing countries and vulnerable populations. This is one more reason why governments, businesses, the financial sector, the scientific community and social-economy enterprises must work together to find tomorrow’s solutions. It is in this spirit that we will be present on December 12 at the “One Planet Summit”, an initiative of President Macron and where the public and private sectors will come together to give fresh impetus to these collective efforts.
- Providing large-scale financing for the projects of the future, such as those devoted to renewable energy or energy efficiency.
- BNP Paribas manages some €25 billion worth of decarbonised asset and we have set a target of lending €15 billion to renewable-energy projects by 2020.
- The banking and financial sector must fully play its multiplier effect in building the low carbon economy.
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